What are the Greatest Challenges Pharmaceutical Companies FaceWed, 09/06/2017 - 10:06
In addition to the general challenges companies have faced last year, such as fluctuating exchange rates and insecurity, Big Pharma has seen revenues dip as both consumers and top national and international politicians assail the industry’s pricing methods and as patented products come under attack from a growing generics market. Mexico Health Review asked several relevant players what, in their opinion, have been the greatest challenges for the pharmaceutical industry between 2016 and 2017.
Overall, market access poses challenges and question marks for all players. We are a heavily regulated industry and even more so due to our internal compliance with government policies. In Mexico and Latin America, our time to market for drugs is getting slower and our capability as a transnational company versus local players at times cannot be compared. Registration for market authorization for new products is one of the hardest hurdles to comply with for many companies, especially for innovative drugs and therapies, even considering that the authorities have simplified processes and time frames. Unfortunately, we have examples of novel drugs that have been in the registration process for almost six years and there is still no answer as to when market authorization will be granted. This obviously generates financial and business forecasting issues for us, plus big questions from our partners in Europe trying to understand the situation.
We have seen significant currency devaluation, so the cost to import products and our operational costs have increased. There are many services we have to cover in foreign currencies. In some cases, we have to take the loss, but we must also reduce and relocate resources. For example, if for next year we had three projects planned, we should only go ahead with two. I remember reading a report from a financial expert saying the value of the dollar would reach 30 pesos per dollar. The international environment is not friendly right now and it presents many challenges. Companies like ours have to be selective when investing and focus on finding returns. There is a tremendous opportunity for local companies that can be more aggressive and gain market share.
The biggest challenge we face as an industry is market access, as our innovative products must be available to the patients who need them. Unfortunately, this situation is not good enough at the moment and is below international standards set for a country with the size and population of Mexico. When compared to other OECD countries and those in the region, Mexico has one of the lowest access indexes, so we are working on this through AMIIF. There have also been several budget cuts, the institutions were not financially viable and they were really struggling, but this is improving. While we understand the issues, the country needs to push for health to improve productivity. Mexico’s economic situation is not that different to that of other countries, as budget constraints are an issue all over the world. We have been looking at alternative contracting models and risk-sharing options among others ideas to increase access to innovation.