Mexico is the second-largest healthcare market in Latin America and is among the top 15 globally. Pharmaceutical expenditures are on the rise at a pace of about 7 percent per year, due in large part to increasing life expectancies and a growing aging population. The more than 106 million Mexican citizens receive their health insurance and prescription drug coverage via two public systems and the private sector. The divisions within the healthcare system mirror economic divisions in Mexico. The wealthy and upper middle class have private insurance and utilize private healthcare providers. Middle- and lower-income Mexican citizens use one of the two public-sector insurance programs. Success in the Mexican market requires an access and communications strategy with the flexibility to achieve reimbursement in all three market segments.

Mexico’s Payer Stakeholders

In Mexico’s public health system, the federal and state governments are the main payers. Government-sponsored health insurance systems include the Instituto Mexicano de Seguridad Social (IMSS), Seguro Popular (SPS), and a variety of Ministry of Health (Secretaría de Salud) providers, including the IMSS-Oportunidades (IMSS-O) program. The health service for State workers is the Institute of Social Security at the State Workers Service (Instituto de Seguridad Social al Servicio de los Trabajadores del Estado,ISSSTE). Members of the armed forces have their own health services, including Secretary of the National Defense (Secreatría de la Defensa Nacional, SEDENA) for the army, and Navy Secretary (Secretaría de Marina, SEMAR) for the navy. The middle class in the formal economy primarily uses the publicly funded IMSS and other government-run systems. The lowest income division, mostly the unemployed and those in the informal economy, use the SPS and IMSS-O. The private sector includes independently operated health plans and hospitals similar to Mexico’s northern neighbor, the United States. Major private-sector providers in Mexico include GNP, AXA, Metlife and Seguros Interacciones. As such, employers and the individual make up the dominant payers for private insurance. The Federal Health-Risk Protection Commission (Comisión Federal para la Protección contra Riesgos Sanitarios, COFEPRIS) is the government regulatory authority responsible for approving new medicines in Mexico. Once products are approved, the General Health Counsel (Consejo de Salubridad General, CSG) is the main decision maker body for new medicines’ inclusion on the public drug formularies, called the Health Systems Supply Catalogue (Cuadro Básico y Catálogo de Insumos del Sector Salud).

Important Points to Keep in Mind

  • The process for making a drug available in the public health system is as follows:
    1. Secure regulatory approval from COFEPRIS
    2. Petition for inclusion in the Health Systems Supply Catalogue
    3. Once listed, the drug may be prescribed by any doctor within the public health system
  • In the case where a drug is not approved for general use, a demonstration of immediate need can be submitted to a Ministry of Health committee for special approval on a case-by-case basis.
  • Once drugs have been added to the Social Health Services Register, pricing is determined by institutional agreement between the manufacturers and payers. A drug’s value and price in the private system is determined by the market and in the public sector via public tender and subsequent negotiations (see compras consolidadas below). Though COFEPRIS sets the maximum price limits on drugs and procedures, the shelf price of a drug under this limit is ultimately left up to the manufacturer.
  • For delivery of medical services, including prescription drugs, those covered under the public health system are limited to attending (and receiving prescriptions from) federal- and state-run hospitals. Federal hospitals accept all forms of insurance, public and private, but private clinics only extend benefits, including medications, to those who have private insurance (or if that person can pay out-of-pocket).
  • Financial schemes and performance-based agreements have become commonplace in the Mexican pharmaceutical market:
    1. Financial: Since 2013, “compras consolidadas” (consolidated purchases) have emerged as a key mechanism by which the government purchases medicines for publicly funded insurance schemes. In doing so, the government’s numerous entities and health insurance programs combine their negotiating power to obtain discounts and secure price/volume guarantees from manufacturers. In doing so, the government aims to achieve efficient, transparent and effective use of public resources.
    2. Performance-based: Risk-sharing arrangements (RSAs) have also emerged as a key practice in Mexico. In these arrangements, authorities transfer some of the risks (both financial and in effectiveness) to manufacturers in exchange for government purchases of branded medicines.
  • In the private system, major retailers such as Wal-Mart (Walmex) and Fármacos Nacionales have traditionally held tremendous influence over the availability and pricing of medicines. However, this influence has been drawn into question due to the case of Casa Saba’s pharmacy, which prior to 2014 was the largest retail chain in Mexico. The pharmacy chain liquidated its assets and dismantled its Mexico operations at the same time that it owed $7 billion pesos to more than 500 pharmaceutical and device suppliers. This action resulted in millions in fines for the company’s previous owners, and a wake-up call for industry.

Implications for Industry

It can take anywhere from two to four years for a drug to be approved and available in Mexico’s Social Health System, and as such, it is important to consider this lag when developing a public access strategy. Overall, access into the Mexican healthcare market is largely dependent on demonstrated value. Private payers make decisions based on the value of a medication to patients’ health, and public health systems choose to include medication in their catalogue based on the value to the population. With a growing population and a health system dedicated to increasing its ability to provide access to healthcare, telling your value story is more important than ever. GLOBALHealthPR’s Mexico office has more than 15 years of successfully creating and communicating the value story to diverse audiences.


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