Summary
With growth of 8.6% now forecast for 2007 and an average five-year US dollar growth rate between 2006 and 2011 of 7.8%, the Mexican pharmaceutical market continues to grow at one of the fastest rates in the region. Colombia and Brazil - the latter posting quicker than expected growth in H107 - will grow faster this year, but Mexico continues to top BMI's Business Environment Ratings (BER) table in terms of market regulation and the overall operating environment. Clear impediments remain to further market development, most notably over-concentration in distribution, inefficiency in state-run programmes and lack of effective monitoring and oversight over greyer areas of the market. But with stable growth, forecast at an average GDP growth rate of 3.8% between 2006 and 2011, and growing demand for modern treatments, the outlook is strong.
Inevitably, it seems, scandals have touched the industry. From the end of August, Mexican pharmacies will be obliged to pull pseudoephedrine containing products from over-the-counter (OTC) sale. The move is one consequence of a scandal involving a Chinese-Mexican pharmaceutical tycoon, Zhenli Ye Gon, the head of local firm Unimed, which allegedly shipped hundreds of tonnes of pseudoephedrine for processing into the narcotic methamphetamine. Amid allegations made by Zhenli that drug traffickers had provided millions of dollars to the ruling Partido Accin Nacional (PAN), the scandal has also raised fresh doubts about oversight of pharmaceutical ingredients shipments, despite claims of aggressive policing by the Mexican authorities.
More mundanely, but with more impact on the market, officials are also looking at the future of statesubsidised healthcare. It has been three and a half years since the introduction of the Seguro Popular scheme under former president Vicente Fox. President Felipe Caldern has added so-called Health Caravans for poorly-served areas and additional care for children born since he took office. But while insurance coverage in the country is now just narrowly over 50% for the first time, the debate has returned to ensuring coverage for the working poor. As the government continues to review the General Healthcare Bill, new high-profile initiatives are in the offing.
The expansion in coverage is frustrated by fast-mounting healthcare costs and perceived waste. The country's Health Secretary recently worried aloud about the impact of the country's growing diabetes epidemic. Pfizer's launch of its Exubera inhaled insulin product in Mexico in recent months reflects huge demand in a country with one of the highest obesity rates in the world. Merck & Co's Januvia #
(sitagliptin) oral medication was approved in Q307. But the real challenge is diagnosing millions of poor sufferers and identifying 'pre-diabetic' patients. Independent estimates, meanwhile, suggest that much Mexican state health spending is not being properly used and that up to 94% of actual health spending comes out-of-pocket. These issues will remain deeply contested as record spending - on paper at least flows into the healthcare sector.
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