Interview: Sandra Sánchez y Oldenhage
How will new regulations affect biotech companies?
SANDRA SÁNCHEZ Y OLDENHAGE: As of December 2014 there is a new set of rules: Regulation 257 was published, affecting biosimilar and biotechnological products in Mexico. This has been a very lengthy process and a controversial one, but one that has resulted in Mexico having a high-standard regulation that is best-in-class within Latin America – and comparable with many European regulatory standards. In the past, biosimilar products were approved under a regulation intended for chemically synthesised medicines. Biotechnology products, however, are very different and it is globally recognised that they need different regulations. The Federal Commission for the Protection against Sanitary Risks has thoroughly and exhaustively updated the regulation and assists pharmaceutical companies in meeting the new standards.
With new and higher standards, many Mexican companies that have biotechnology products will struggle to meet the new requirements, which might lead to some consolidation of the industry. It goes without saying that the new regulation will impact margins and time to market, but it will also create export opportunities in new markets, since we will now be meeting many international standards. There is still plenty of room for improvement, since Mexico does not currently have the infrastructure to fulfil the regulatory requirements in their entirety. For example, depending on the characterisation studies required, we might need to outsource from other countries, thus increasing costs and time. Nevertheless, this new regulation will potentially facilitate entry to other Latin American countries.
Could Mexico become a research and development (R&D) centre for biotechnological products?
OLDENHAGE: Clinical research has always been a key investment area for the pharmaceutical industry, particularly in the later stages. However, early stages of development – or even discovery and innovation – have been very limited in Mexico. One of the main challenges is the absence of a clear government industry development stance and policy for biotechnology, without which the industry will limit its growth.
In Mexico the biotechnology industry accounts for 7.2% of manufacturing GDP, making it the fourth-largest manufacturing industry. Countries like South Korea, Brazil and Russia have been forthcoming about their official policies and their biotechnology industries have since flourished. Most of the industry in Mexico imports active pharmaceutical ingredients and/or finished, products as there are no incentives in place to manufacture or develop locally. The industry needs incentives to become a centre for R&D and manufacturing. In contrast to traditional generics, the manufacturing of biosimilars requires innovative processes, such as the genetic engineering of living organisms. This industry can be the next innovation engine, but it is in dire need of a comprehensive industrial development policy.
Following a demographic and epidemiologic transition from infectious diseases to chronic-degenerative ones, people are living longer with co-morbidities and lengthier treatments. Many of these diseases are treated with biotechnological products, which have increased treatment costs and put pressure on social security budgets. This can be resolved with high-quality, lowcost biotechnology products, such as biosimilars.
Which export markets should be targeted for the sale of biotechnological products?
OLDENHAGE: The US is a natural market for Mexican companies, but it is also a highly-developed and very competitive one, especially in the pharmaceuticals arena. As a result, Mexican companies usually focus on exporting first to other emerging economies with a large patient population who are in need of high-quality and low-cost biotechnology products. The region of Latin America, Russia, Turkey, Ukraine, Algeria, as well as the UAE and some countries in Africa would be among the first targets. As soon as companies meet the recent Mexican biotechnology/biosimilars regulation, access to countries such as these will be greatly accelerated.
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