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Country Presentations Mexico PowerPoint Presentation
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Country Presentations Mexico

Country Presentations Mexico

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Country Presentations Mexico

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  1. Country Presentations Mexico

  2. Mexico’s Pharmaceutical DNA and Key Challenges and Opportunities

  3. Mexico’s Pharmaceutical DNA • Health system • Population aged 65 and over predicted to reach 21% of total by 2050 • Public expenditure on health lowest in OECD (as of 2010) • Annual growth rates of health expenditure below OECD average • Pharmaceutical Environment • Pharmaceutical expenditure represents high percentage of total health expenditure • Private out-of-pocket (OOP) spending represents 95% of spending on pharmaceuticals • Pricing and Reimbursement (P&R) • Price caps on patented medicines based on international referencing • Reimbursement limited mainly to generic medicines, based on health technology assessment (HTA) Intellectual Property (IP) • Biopharmaceutical IP protection fairly standard, except limitations in ability to enforce patents • Counterfeited medicines problematic, particularly in private pharmacies

  4. Key Challenges and Opportunities

  5. Presentation Overview

  6. Presentation Overview • Demographic background • Macro-economic background • Health system overview • Pharmaceutical overview • Pricing and reimbursement policies • Intellectual property environment • Biopharmaceutical regulatory requirements • Public procurement policies – pharmaceuticals

  7. Demographic Background

  8. Demographics • Total population: 34 million • Annual population growth rates: between 0.79% and 1.36% 2000-2010 • Dependency population 2010 • Youth population (aged less than 15): 28.1% • Elderly population (aged 65 and over): 5.9% • Dependency population aged 65 and over growing rapidly: predicted to reach 21.2% of total population by 2050

  9. Dependency Population, Trend and Forecast, 2000-2050 Source: OECD Stat (2012)

  10. Macroeconomic Background

  11. Macroeconomic Background • GDP per head: USD 15,195 (2010) • OECD average USD 33,976 (2010) • Annual GDP growth 2011: 4.5% • OECD average 2011: 1.8% • Volatile economic growth rates over past decade – greater highs and lows than US, EU27 and OECD averages • Low national debt: 27% of GDP in 2010 • OECD central government debt average close to 80%

  12. Real GDP % Growth 1997-2010 Source: OECD Stat (2012)

  13. Health System Overview

  14. General Health System Facts • Several vertically integrated public insurers/providers for different parts of population (social security, low-income, unemployed/self-employed) • Universal coverage (through expansion of public insurance schemes) targeted in 2012 • Outside social security system, financing mix of MoH and states • Actual coverage and medical services provided by social security system and State Health Services • Out-of-pocket spending highest in the OECD (49% in 2010) • Health policy fragmented, divided between federal and state governments • Large private sector (represents 50% of health spending)

  15. Health Expenditure • TEH 6.2% of GDP in 2010 (latest figures) • 3.3% lower than OECD average of 9.5% (2010) • 47.3% of total health spending in 2010 public expenditure • OECD average 72% (2010) • 3-4% increase in public expenditure as % of TEH since 2005 • Annual average growth rate (AAGR) total health expenditure 3.8% per year 2000-2009 • OECD average 4.3% • AAGR public sector 4.0% per year 2000-2009 • OECD average 4.5% • Out of pocket spending as % of TEH 49% 2010 • OECD average 19.5 % (2010)

  16. Total Expenditure on Health % of GDP, 1990-2010 Source: OECD Stat (2012)

  17. Public Expenditure on Health, % TEH, Mexico, 1990-2011 Source: OECD Stat (2012)

  18. AAGR Mexico and OECD Averages, 2000-2009 Source: OECD Stat (2012)

  19. Public expenditure and out-of-pocket payments, % total expenditure on health, 2010 Source: OECD Stat (2012)

  20. Pharmaceutical Overview

  21. Pharmaceutical Overview (1) • Pharmaceuticals partially covered through various health insurance schemes • Public insurance provision dominated by generics • Traditionally, three main classes of medicines in the market: • Innovative (patented); • “Interchangeable generics” (approved and registered by MoH based on bioequivalence tests); and • “Similar generics” or similares (generics approved and registered without bioequivalence tests) • Public insurance provision of similaresphased out 2005-present

  22. Pharmaceutical Overview (2) • High volume of medicines sold through private pharmacies due to insufficient public health insurance coverage of pharmaceuticals • Private financing of medicines far outweighs public financing: 80% vs. 20% • Majority of private spending on medicines is OOP (over 95%) • Still, overall, lowest consumption of pharmaceutical products per capita in OECD

  23. Snapshot of Pharmaceutical Spending • Pharmaceutical spending as % TEH 2nd highest in OECD (27.1% in 2009) • Per capita spending 2nd lowest in OECD (2009) • Medium growth in per capita pharmaceutical spending in 2000s, from very low rates at beginning of decade • Between 1999-2009 per capita spending almost tripled from USD 87.3 to USD 249.9 (PPP) • Incremental growth expected: pharmaceutical sales projected to rise from US$13 billion (MXN161 billion) in 2011 to US$18 billion in 2015

  24. Total Expenditure on Pharmaceuticals and Other Medical Non-durables, % TEH, Mexico, 1999-2009 Source: OECD Stat (2012)

  25. Total Expenditure on Pharmaceuticals, % of TEH, 1999-2009, Mexico and Select OECD Countries Source: OECD Stat (2012)

  26. Total Per Capita Spending, Pharmaceuticals and Other Medical Non-durables, US$ PPP, Mexico, 1999-2009 Source: OECD Stat (2012)

  27. Total Per Capita Spending, Pharmaceuticals and Other Medical non-durables, US$ PPP, 2010 or Closest Year, OECD Source: OECD Stat (2012)

  28. Pricing and Reimbursement Policies

  29. Pricing Policies Patented Medicines • Maximum retail prices capped by Ministry of Economy (mainly for private sector) • Use international reference pricing • Calculated on basis of the average ex-factory price of the previous quarter in the six largest markets for a given product globally • Governed by General Law on Health, Article 31 • Lack of across-the-board compliance by pharmacies, poorly regulated • Little competition in public sector prices for patented medicines (due to centralized purchasing price)

  30. Generic Pricing Policies • Pricing • Public sector: no central price control, wide variation in prices by state or insurance scheme • Private sector: generics/off-patent medicines no price control • Policies Promoting the Use of Generics • Federal Commission for the Protection against Sanitary Risks (COFEPRIS) creates Interchangeable Generics List • Listed by INN, includes both generic and original products • Public sector insurance schemes use list as well as National Formulary to encourage (but not require) generic prescription • Generic consumption through public insurance coverage still limited

  31. Reimbursement Policies • All public institutions and insurance schemes governed by National Formulary (CuadroBásico y Catálogo de Medicamientos) • Set by National Formulary Committee (CICBISS) of the General Health Council (CSG) • Dictates first, second and third lines of treatment • 4-5 months for review and decision • Listed by INN, each assigned a code • Limits medicines available to 932 INNs (2011) based on market authorization and Economic Evaluation Study (EEE) • Large majority are off-patent • Published annually

  32. HTA Policies • Economic Evaluation Study (EEE) compares current standard treatment with product proposed for inclusion in CuadroBásico • Mandated by CICBISS Internal Regulation, Article 24 • Submitted by company, CICBISS reviews according to CSG guidelines • Must include at least 1 of the following comparisons: • Cost-minimization – cost savings compared to equally effective comparators • Cost-effectiveness – incremental cost-effectiveness ratio relative to GDP per capita per additional years of life • Cost-utility – same as above, using QALY as denominator • Cost-benefit – rate of return relative to public debt issued by Federal Government

  33. Intellectual Property Environment

  34. Pharmaceutical IP Overview • Biopharmaceutical IP protection fairly standard, but not fully in line with international standards and bilateral commitments • Biotech inventions patentable, except in natural state or processes of reproduction • Patent linkage system ineffective, lacks transparency • IP enforcement improving but insufficient • Significant delays in prosecution common • Injunctions frequently ineffective • Sales of counterfeit medicines in pharmacies undeterred, although efforts to contain are increasingly routine

  35. Pharmaceutical ‘Patent Linkage’ Mechanism • Basic linkage system exists based on Presidential Decree (2003) • Requires generic applicants to comment on the patent status of the reference product • Potential infringement issues resolved by Mexican Patent Office (IMPI) and COFEPRIS and published by IMPI • Significant weaknesses: • Does not involve notification or consultation of the patent holder • Only applies to substance patents; despite 2008 Supreme Court ruling requiring inclusion of formulation and use patents, not consistently applied • Process often delayed and ineffective

  36. PTE and RDP • Mexico does not offer patent term extensions for pharmaceutical products • COFEPRIS introduced 5 year regulatory data protection term in 2012 • RDP only applies to NCEs thus far • Implementation of RDP still uncertain

  37. Biopharmaceutical Regulatory Requirements

  38. Marketing Authorization for Chemical Entities • MoH Federal Commission for the Protection against Health Risks (COFEPRIS) responsible for drug testing and approval • New drug submissions required to undergo safety, efficacy and quality testing • All generics now required to submit bioequivalence tests • Re-registration required every 5 years (elimination of similares) • COFEPRIS actively monitors availability of unapproved/sub-standard drugs • Recent delays in approvals; 2011-12 new target maximum approval time 180 days • COFEPRIS observes and has adopted guidelines of International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use (ICH)

  39. Removal of Similares from the Mexican Market • Similaresformalized in 1998 reform to General Law on Health • Reform identified three classes of drugs approved by MoH (innovative, interchangeable generics and similar generics) • Similaresdid not undergo bioequivalence tests; not sanctioned as interchangeable with the original drug • Accounted for 36% of medicines sold in private sector in 2002 • Quality and safety debate over non-bioequivalence tested products in both public and private sectors 2002-2005 • Effort to phase out similares from the market, 2005-2010 • 2005 amendment to General Law on Health, Art.376 required all generics to undergo bioequivalence tests • All generics registered prior to 2005 had to be re-registered using bioequivalence tests by 2010 • Not yet fully implemented; severe delays in re-registration (1,000 applications remaining in Oct 2012)

  40. Marketing Authorization for Biologics and Biosimilars • Biological drugs undergo the same procedure and testing requirements as new chemical entities • “Biocomparables” (biosimilars) pathway came into force in 2012 (Mexican Health Law, Art 222bis and COFEPRIS guidelines) • Mexican biosimilar pathway de facto resembles that used by the European Medicines Agency • Biologic similares(bio-similares) being phased out along with other similares • RDP protection/periods do not exist for biologics and biosimilars

  41. Public Procurement Policies – Pharmaceuticals

  42. Public Procurement Policies – Pharmaceuticals (1) • General characteristics of the procurement system • Relies on INN (as per the CuadroBásico) • Favors generics over innovative products • Decisions based largely on price • Value plays a role mainly to the extent it is a factor of a product’s inclusion in the CuadroBásico

  43. Public Procurement Policies – Pharmaceuticals (2) • Phase I: Setting of centralized procurement price • Coordinating Commission for Negotiating the Price of Medicines and Other Health Inputs (CCNPMIS) annually secures single price for given product for all public institutions • Composed of representatives of MoH, MoEcon, public health insurers • Principle objective: uniform price reductions • Phase II: Actual procurement by individual institutions • Based on centrally agreed price • Mandatory to tender for products included in CuadroBásico(generics where possible) • States handle purchasing of non-essential medicines for all MoH-dependent schemes • Wide variation in average drug prices among states

  44. Thank you!