Country Presentations Mexico Mexicos Pharmaceutical DNA and Key - PowerPoint PPT Presentation

Country Presentations Mexico

Mexico’s Pharmaceutical DNA and Key Challenges and Opportunities 2

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 3

Key Challenges and Opportunities Challenges • Below OECD average annual growth rates of health expenditure over last decade • Fragmented health system and health policymaking • Pharmaceutical provision by public health insurance schemes focused almost entirely on generics • Challenging IP environment – ability to enforce patents, particularly in the approval of generics and in the judicial system Opportunities • Dependency population rapidly increasing to developed world proportions • Relatively small public health care sector, compared to other OECD countries; room for growth in private health insurance sector • Potential for expanding consumption of innovative pharmaceuticals, particularly in light of historically low consumption of pharmaceuticals, demographic opportunities, and the population’s propensity to purchase medicines from the private sector • Increasingly strong regulation of quality and safety in the biopharmaceutical market, including phasing out of similares , leading to greater purchase and utilization of high quality products 4

Presentation Overview 5

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 6

Demographic Background 7

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 8

Dependency Population, Trend and Forecast, 2000-2050 35 30 25 Youth Population (aged less than 15) % of total Population 20 Elderly population (aged 65 and over 15 ) % of total Population 10 5 0 Source: OECD Stat (2012) 2000 2005 2010 2020 2030 2040 2050 9

Macroeconomic Background 10

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% 11

Real GDP % Growth 1997-2010 8 6 4 2 Mexico United States 0 EU27 total 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 OECD total -2 -4 -6 -8 Source: OECD Stat (2012) 12

Health System Overview 13

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) 14

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) 15

Total Expenditure on Health % of GDP, 1990-2010 20 18 16 14 Mexico 12 United States France 10 Germany Japan 8 United Kingdom 6 4 2 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: OECD Stat (2012) 16

Public Expenditure on Health, % TEH, Mexico, 1990-2011 50 48 46 44 42 40 38 36 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Source: OECD Stat (2012) 17

AAGR Mexico and OECD Averages, 2000-2009 6 5 4 Mexico OECD Average 3 US UK 2 1 0 AAGR AAGR Public Sector Source: OECD Stat (2012) 18

Public expenditure and out-of-pocket payments, % total expenditure on health, 2010 90 80 70 60 50 Mexico OECD Average 40 US UK 30 20 10 0 Public Expenditure, % total expenditure on health Out-of-pocket payments (households), % total expenditure on health Source: OECD Stat (2012) 19

Pharmaceutical Overview 20

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 s imilares phased out 2005-present 21

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 22

Snapshot of Pharmaceutical Spending Pharmaceutical spending as % TEH 2 nd highest in OECD • (27.1% in 2009) Per capita spending 2 nd 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 23

Total Expenditure on Pharmaceuticals and Other Medical Non- durables, % TEH, Mexico, 1999-2009 35 30 25 20 15 10 5 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: OECD Stat (2012) 24

Total Expenditure on Pharmaceuticals, % of TEH, 1999-2009, Mexico and Select OECD Countries 30 25 20 Mexico United States 15 Germany Japan France 10 5 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: OECD Stat (2012) 25

Total Per Capita Spending, Pharmaceuticals and Other Medical Non-durables, US$ PPP, Mexico, 1999-2009 300 250 200 150 100 50 0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Source: OECD Stat (2012) 26

Total Per Capita Spending, Pharmaceuticals and Other Medical non-durables, US$ PPP, 2010 or Closest Year, OECD 1000 900 800 700 600 500 400 300 200 100 0 Source: OECD Stat (2012) 27

Pricing and Reimbursement Policies 28

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) 29

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 30