The lowest spender on healthcare as a percentage of GDP in mainland Latin America. A complex and fragmented reimbursement system. Clinical trial approval delays stretching across eight months. One could be forgiven for thinking that attempting to bring innovative medicines to Mexico is a thankless task. Yet, as several country managers of leading global innovators embedded in Mexico explain below, the real picture is far more nuanced. Those adopting a collaborative, holistic approach are already achieving some access breakthroughs, with hopes that they can achieve a true mindset shift on the value of investment in healthcare innovation across the Mexican ecosystem.
The root causes of Mexico’s access to innovation challenges can best be traced to the country’s chronic underinvestment in healthcare. In Mexico, approximately 5.5 percent of GDP is allocated to healthcare; significantly lower than the average for OECD countries, which stands around 9-10 percent. It is also far lower than fellow Latin American countries like Argentina and Brazil, which skew closer to the OECD average. This relatively low investment presents major challenges for the Mexican healthcare system, including underfunded government institutions charged with approving and reimbursing new medicines, limited resultant access to innovative treatments for patients, and high out-of-pocket expenses (reaching almost 50 percent), placing a heavy financial burden on individuals.
Regulatory Roadblocks
For the Federal Commission for Protection against Health Risks (COFEPRIS), the country’s regulatory authority, the funding challenges are stark. As Larry Rubin of global innovator association AMIIF explains, “COFEPRIS, with a 2024 budget of MXN 747 million (approximately USD 39 million), faces significant resource constraints that hinder its ability to improve operations. The agency lacks sufficient staff, proper training, and the necessary digital infrastructure.” While AMIIF has been working on a digitalisation project with COFEPRIS, akin to the process that the European Medicines Agency has undergone to enhance efficiency and cut costs, this is very much a work in progress.
Others are more complementary of COFEPRIS’s ability to quickly assess new medicines for safety and efficacy. “Recently, under Dr Alejandro Svarch’s administration, COFEPRIS has made significant strides in streamlining the approval process, reducing bureaucratic hurdles and expediting the approval of new treatments,” says Arturo de la Rosa, general manager of virology specialist Gilead Sciences. de la Rosa’s positivity is borne out by the facts that a full 85 percent of people living with HIV in Mexico today are being treated with Gilead therapies and that Mexico has become the company’s largest affiliate in LatAm, surpassing even Brazil.
Reimbursement Rumbles On
However, securing approval for a new medicine in Mexico is just the first part of the story. Gaining reimbursement and making a drug available to patients is a fragmented and long-winded process that frequently ends in failure and takes an average of 1,215 days, the longest such wait in Latin America, according to the 2023 IQVIA & FIFARMA Patient WAIT Indicator. Added to the 859 days it takes to secure COFEPRIS approval following initial EMA or US FDA sign-off, patients in Mexico must wait a full 2,073 days to access new – potentially lifesaving or life-altering – treatments.
The main body overseeing the inclusion of medicines in the public healthcare system is the General Health Council (Consejo de Salubridad General, CSG), specifically through its National Formulary (Catálogo Nacional de Insumos para la Salud (CNIS)), but various public healthcare providers also have their own processes for reimbursement. These include IMSS (Mexican Institute of Social Security) – the largest public healthcare provider, serving workers and their families; ISSSTE (Institute for Social Security and Services for State Workers) for government employees; and previously INSABI (Institute of Health for Wellbeing) for uninsured populations. INSABI was abolished in May 2023 and its task, resources, infrastructure and workforce were transferred to IMSS-Bienestar. This is the institution that now covers all people without social security.
This fragmentation and complexity is compounded by the aforementioned lack of funding. “With only 5.5 percent of GDP allocated to health, Mexico struggles with reimbursement issues and lacks the financial capacity to provide cutting-edge treatments to all who need them,” bemoans Jorge Luis Caridad, managing director for Johnson & Johnson Innovative Medicine.
“This situation calls for a shift in mindset—viewing healthcare spending not as an expenditure but as a critical investment,” suggests Caridad, adding that “a healthy society is a productive one, and investing in health is not just sustainable but essential for national progress.”
Gilead’s de la Rosa agrees but feels that industry sponsors need to do more to explain the benefits that their therapies bring, both from a health and economic perspective. “For many patients, especially those covered by public healthcare systems like IMSS and IMSS-Bienestar, the affordability and inclusion of high-cost treatments are critical,” he notes. “As a company, it is essential to demonstrate the value of our therapies not only in terms of clinical outcomes but also in how they contribute to the overall sustainability of the healthcare system. This means providing a clear value proposition that justifies the cost while improving patient outcomes and system efficiency.”
Catalysing Clinical Trials
Clinical trials are set to be a key ingredient in cooking up a solution to Mexico’s access to innovation struggles. By situating clinical studies in the country, multinational sponsors not only hope to provide early access to patients but also expose physicians, regulators, and payers to the benefits that biopharmaceutical innovation can bring. There are also economic upsides – AMIIF’s Rubin speculates that the USD 200 million currently being spent on clinical trials in Mexico could be supercharged to USD four billion if regulatory hurdles were removed. Rubin also points out that with 12 percent of the population in the world’s biggest pharma market – the USA – being of Mexican origin, “understanding Mexican patients is crucial [for industry sponsors],” another key selling point for Mexico.
However, again, delays are clouding the picture. “Other Latin American countries, like Argentina and Honduras, have much shorter approval times for clinical trials of around 20 to 35 days,” laments Rubin. “Currently, approval for clinical trials in Mexico can take up to 400 days, whereas it should ideally be around one month to increase the country’s attractiveness to global sponsors,” adds BMS General Manager Oswaldo Bernal. Beyond resolving theses delays, J&J’s Caridad feels that, “to compete on the global stage, Mexico needs to declare clinical trials a national priority, streamline the approval process, and establish a clear and predictable legal framework that protects the intellectual property generated from these trials.”
Regardless of these challenges, several companies are pushing ahead with clinical trials in Mexico. Takeda, for its part, has achieved what General Manager Hernán Porcile calls “considerable success” by fostering a collaborative approach within the healthcare ecosystem, involving the public sector, patients, and healthcare professionals. “A key strategy for accelerating innovation in Mexico has been our focus on creating early clinical experiences within the country. This involves conducting clinical studies locally and implementing investigational programs that generate early and valuable data.”
Porcile adds that the benefits are myriad for all stakeholders. “Establishing these early experiences allows us to better identify medical needs and demonstrate the effectiveness of new treatments. This collaborative approach facilitates access to innovative therapies, as we can present tangible benefits and medical necessities to regulatory authorities. Additionally, having Mexican patients participate in clinical studies is crucial. It accelerates access to new treatments and ensures we have relevant, local data to support our regulatory applications.”
J&J is another such company, conducting 36 different clinical trial protocols in 2023 alone and enrolling over 2,000 patients with life threatening diseases for clinical studies in Mexico since 2019. “While 2,000 patients may seem small in the context of a widespread condition like diabetes, it is substantial when you consider the critical nature of the diseases we are addressing,” points out Caridad.
BMS too has invested more than USD 70 million in Mexican clinical trials over the past five years, and Bernal is optimistic about the opportunities ahead. “A new agreement between AMIIF and the IMSS to develop clinical trials and gather real-world evidence is a significant development,” he says. “This will provide access to a large institution with around 50 to 60 million people which, for running clinical trials, is exceptional.”
A New Dawn?
Incoming Mexican President Claudia Sheinbaum has made promising noises on health, covering everything from improving the efficiency of drug distribution to prioritising access to medicines for the most vulnerable segments of the population, digitising the healthcare system, and reinforcing preventive medicine and healthcare education. Whether this push will involve spending a greater proportion of GDP on health and creating a more conducive ecosystem for launching innovative new medicines in the country though very much remains to be seen.
* This article was updated on October 23rd to reflect the fact that INSABI was replaced by IMSS-Bienestar in May 2023
