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Mexican Health Authority to Consider All Options to Reduce Drug Prices25 Jul 08An increase in the consumption of generic drugs with parallel initiatives to encourage imports and strong competition could help the Mexican government achieve reductions in drug prices.
Mexican health secretary José Angel Córdova Villalobos is considering all legal mechanisms to reduce the cost of pharmaceuticals in the country, reports Notimex. According to Cordova, and as reiterated by fellow health representatives in recent months, pharmaceuticals are significantly more expensive in Mexico than in other neighbouring Latin American markets. Although the cost of anti-retrovirals (ARVs) has been the focus of complaints, the reported high prices extend beyond HIV/AIDS drugs and affect the entire pharmaceutical sector. Córdova used the cost of uterus cancer vaccines as an example of price differences, further stating that the cost of available vaccines in Mexico is US$70, compared with US$32 in other Latin American countries. The Generics Market The health secretary highlighted the increasing consumption of generics as a strong mechanism for cost savings to the public system. In this regard, he could be considering focusing on generic drugs as a policy in the treatment of HIV/AIDS as opposed to those protected by patents, which are more expensive. The health secretary stated, however, that any measure will look at guaranteeing the quality of the medicines and will be no savings based at the risk of losing quality. He went on to say that despite high prices, universal access to medicines will not be an issue and in the short term, the government will put the necessary means to cover the costs while cost-cutting mechanisms are discussing for the long-term running of the system. With regard to generics, Mexico is currently in the process of re-registering all drugs with a view to clear the market of copies by 2010. Increased transparency, with drug quality maintained by bioequivalence tests, will bring greater confidence in generics to the market. Increasing Imports The Mexican authorities require manufacturers to have production facilities in the country before they can market their drugs. Every so often this regulation is called into question, but so far the government has refused to drop it to protect the national industry and subsequent local employment. Córdova will consider reopening the discussion about changing the current legal framework, as he strongly believes that withdrawing this requirement would open the Mexican market to more competition and thus lower prices. In his view, the current high prices are attributable to the strength of the companies currently operating in the market. Compulsory Licensing Although the health secretary has confirmed that there are not immediate plans to use compulsory licensing to make some patent-protected drugs more affordable, it is a topic that has not beeen ruled out by the authorities and, as a very delicate topic, will be analysed in detail. The impact of any patent breaking policy would have to be looked at within the whole pharmaceutical industry and not just in the area of ARVs, Cordoba emphasised. Outlook and Implications The Mexican authorities' increasing concern over drug pricing is not big news (see Mexico: 24 July 2008: Mexico Continues to Report Overpriced HIV/AIDS Drugs), partially due to the strong media coverage of HIV/AIDS groups lobbying the government to take immediate steps with regard to the cost of ARVs. However, the disclosure of the optional mechanisms mentioned by the health secretary to reduce the cost of pharmaceuticals in the public and private sectors will present generics policies, changes in import regulations, and compulsory licensing—all issues of key relevance for the pharmaceutical industry. As the health secretary has highlighted, the discussion on imports was put aside provisionally to prioritise the re-registration of drugs over the next two years. However, due to the budgetary impact of the current legal framework, there is no better time than now to ensure new companies can sell their products at competitive prices in the Mexican market. The increasing use of generics drugs with HIV/AIDS will not please patients' groups, as this will leave out most recent treatment and commonly used ARVs. Just the mention of compulsory licensing will affect the industry, given decisions of this kind in Brazil where both Merck & Co.'s (U.S.) Stocrin (efavirenz) and Gilead's (U.S.) Viread (tenofovir) are lacking patent protection on public health arguments. However, Global Insight does not expect compulsory licensing to be considered as a first option but as a last resort should other legal mechanisms not bring the expected results. Changes in the current import trade legislation are more likely to be used to cut costs, although a strong opposition is expected from the national industry, which will see this as an immediate threat to firms' current favoured position in the market. |
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