MEXICO MULLS NEW DRUG INDUSTRY STRATEGY

Mexico's Health Secretariat has published draft plans for a new national pharmaceutical industry policy. As well as acknowledging the positive impact of recent reforms -- such as the introduction of mandatory bioequivalence testing for generics -- the study identifies a number of potential cost-saving strategies, development goals and improvements to the regulatory system.

Mexico launched its so-called Popular Insurance scheme in 2004, providing treatment cover and drug reimbursement for millions of citizens in the event of "catastrophic" disease or injury. However, as government spending on drugs looks set to reach US$2bn in the short term, the new study argues that price controls and a better legal environment for genuine generics will be needed to support the added expenditure.

The study also outlines a number of key objectives for better market regulation. In terms of safety, the challenges include: closer regulation of non-prescription drugs; halting the US$100mn counterfeit trade and the misallocation of amphetamine inputs; removing expired medicines from sale; closer regulation of mineral supplements; and promoting responsible self-medication.

Drug pricing is also highlighted as a key challenge, as Mexico's average drug prices are only 20% below those in the US. Accordingly, the government aims to unify public drug tenders in order to enhance its bargaining power in price negotiations with drugmakers, as well as to promote greater competition in drug distribution, which is limited to just five major players in Mexico.

The study also urges Mexico to end its import dependency in many areas of the pharmaceuticals sector. Multinationals account for 85% of annual drug production, and the country is also deficient in APIs and vaccines. The government also hopes to better channel results from the US$130mn spent on academic drug R&D in Mexico each year to local drug companies.

Nevertheless, it remains to be seen whether the government will succeed in its objectives. Reforms to the country's General Health Law are behind schedule, and a presidential election is due in July 2006. Observers now hope that the next government will continue to embrace the focused approach outlined in the new development strategy.