MEXICANS CONCERNED OVER HIGH DRUG PRICES

Medicine pricing remains a controversial issue in Mexico's MXN81.75bn (US$7.75bn) drug market, with many observers now openly calling for reform. However, "prohibitively high" prices remain an embedded feature of the pharmaceuticals sector.

At present, maximum drug prices are currently set by negotiation between producers and the trade ministry, SECOFI. The system accounts for the therapeutic advantages offered by each product, as well as its price in a group of other countries. Nevertheless, final selling prices are often more than twice the agreed maximum, with distributors and retailers together accounting for 43% of the price. Manufacturer costs -- including promotion expenses -- account for the remainder.

With both distributors and retailers taking an automatic 21.5% margin -- whether the product is a basic drug like aspirin or a novel hypertension therapy -- many industry sources are openly questioning the country's pricing structures. Concern focuses on the fact that retail prices are often well above the maximum mandated by law, preventing many low-income Mexicans from accessing innovative treatments. As the country moves to widen its underdeveloped public sector reimbursement system, current arrangements are unlikely to discourage the growing presence of cheap, illicit copy drugs.