LOCAL MANUFACTURING RULES, IP DRIVE MEXICO'S DRUG SECTOR

A new report by GEA, a group of health economists in Mexico, has highlighted the structural challenges facing the country's pharmaceuticals sector. The drug industry employs 45,000 people at more than 224 manufacturing facilities in Mexico.

The report attributes the historic growth of the pharmaceuticals industry in Mexico to the country's "local manufacturing requirement," instituted in the 1940s. In more recent times, intellectual property reform -- notably the introduction of TRIPS-compliant 20-year patent protection -- has driven the sector's expansion.

However, the authors identify a number of serious challenges to the sector's long-term sustainability. One key problem will be Mexico's ageing population, which will see roughly 25% of Mexicans aged over 65 by 2030. In epidemiological terms, the proliferation of chronic diseases such as diabetes will be a major financial challenge for the government, due to dietary patterns and the dramatic decline in more easily treatable infectious diseases in recent decades.