The improving performance of Mexico's regulatory system presents more opportunities for multinational pharmaceutical companies seeking to enter the Mexican pharmaceutical market. On the back of favourable economic and political conditions, we forecast Mexico's pharmaceutical market will grow at a rate of 8.8% in 2013 in local currency terms and 14.4% in US dollar terms.
Headline Expenditure Projections
- Pharmaceuticals: MXN176.00bn (US$13.38bn) in 2012 to MXN191.42bn (US$15.31bn) in 2013; +8.8% in local currency terms and +14.4% in US dollar terms. Forecasts decreased from Q213 due to macroeconomic forecast changes.
- Healthcare: MXN957.76bn (US$72.82bn) in 2012 to MXN1,035.09bn (US$82.81bn) in 2013; +8.1% in local currency terms and +13.7% in US dollar terms. Forecasts decrease from Q213 due to historical data changes.
Risk/Reward Rating: Mexico scores 60.6 in BMI's Pharmaceutical and Healthcare Risk/Reward Rating (RRR), making it the fifth most attractive pharmaceutical market in America. We have re-weighting the RRR components this quarter to improve the tool, and adjusted scores for all markets in our Pharmaceuticals & Healthcare reports.
Key Trends And Developments
- In March 2013, the US embassy, the Mexican Association of Pharmaceutical Research Industries and the Federal Commission for Protection Against Sanitary Risks have launched a joint forum to tackle the issue of counterfeit medical products in the US and Mexico..
- In March 2013, Novartis planned to invest US$20-30mn annually in research and development (R&D) in Mexico. Furthermore, over the next two years, it will launch 17 new medicines in the local market..
- In Q113, COFEPRIS) approved Roche's Erivedge (vismodegib) for the treatment of basal-cell carcinoma (BCC); Inlyta (axitinb), developed by Pfizer for the treatment of advanced kidney cancer; Sanofi's Lyxumia (lixisenatide), a once-daily injectable GLP-1 receptor agonist for the treatment of type 2 diabetes.
- In February 2013, the Mexican government made the Oncotype DX diagnostic test, developed by Genomic Health, available to breast cancer patients for free by including it in the public health sector's insurance provider, Instituto Mexicano del Seguro Social (IMSS).
BMI Economic View: While we still anticipate that growth will be slower in 2013 than 2012, we are modestly revising up our real GDP growth forecast for this year, from 3.4% to 3.6%, as we believe that the fiscal cliff's impact on the US economy is likely to be fairly moderate, helping to anchor Mexican export growth. Moreover, after slower than anticipated gross fixed capital formation (GFCF) growth in the first three quarters of 2012, investment looks set to surge in 2013 on the back of rising investor enthusiasm related to the country's strong macroeconomic credentials, robust manufacturing sector and substantial reform potential.
BMI Political View: After the Mexican government's recent successful passage of labour market reform, we see increased scope for President Enrique Pena Nieto to push through substantive economic improvements, including comprehensive fiscal and piecemeal energy sector reform. That said, we caution that the historical tension between the parties, and a hard-line 'old guard' within the governing Partido Revolucionario Institucional are likely to ensure a laborious legislative process.