The Mexican pharmaceutical industry has potential for the deployment of research and development (R&D) capital. Since 2010 the strategy of the Federal Commission for the Protection from Sanitary Risk (Comisión Federal para la Protección contra Riesgos Sanitarios, Cofepris), the regulatory body governing the sector, has enabled faster licensing of new products and allowed Mexico to become one of the most developed markets for generic drugs in the world. “Cofepris has implemented new reforms, undergone transition and has excelled in setting high standards for the pharmaceutical sector,” Gurulinga Konanur, CEO of Hetero Drugs, told OBG. “Entry barriers are high and regulations are thorough, meaning Mexico is on par with developed markets and above the standards of other Latin American countries.” The pharmaceutical, veterinary and medical devices industry accounts for 4.5% of GDP, and there are an estimated 300 drug companies in the country, of which 70% have manufacturing facilities.

Clinical Trials

According to Rafael Gual Cosío, director-general of the National Chamber of the Pharmaceutical Industry, his organisation’s 200 members had investment plans totalling over MXN40bn ($2.4bn) as of February 2017. One area of particular interest is clinical research. In June 2016 US drug giant Pfizer announced it would invest MXN280m ($16.9m) in clinical research in Mexico. In March of that year Portuguese contract research firm Eurotrials announced it would open an office in Mexico, citing the government’s efforts to make the country more attractive to R&D investment as a driver of the decision. With an opportunity to corner the market for clinical trials on Latin American patients, the industry is expected to triple in the coming years to $500m, according to the Mexican Association of Pharmaceutical Research Industries.


In March 2015 new rules governing biosimilar pharmaceuticals, a biologic medicine that is similar to another drug that has already been authorised for use, came into effect in Mexico. It clarified a 2013 regulation that led to fears that some biosimilar drugs may be removed from pharmacy shelves. The new legislation requires that Cofepris decide, on a case-by-case basis, which tests are needed to prove biosimilarity. The clarification bodes well for investment in production and research of biosimilars in Mexico. In July 2016 Mexican pharmaceutical manufacturer Neolpharma announced it would invest $20m to upgrade its factory and produce biosimilars in 2017. “New research in the field of bio-mechanics continues to produce innovation in product design,” Bernd Schreiber, director-general of Festo, a local industrial control and automation company, told OBG. “Particularly, research on living organisms is changing the way we think of mechanical systems and their application in various industries.”

Government Support

Perhaps the biggest opportunity for Mexico is in the development of new generic products, given the high penetration of generic drugs in the country. “The objective for pharmaceutical companies is to keep costs low, both for production and for sale. The most appropriate strategy for Mexico is to develop highly innovative drugs in high-tech laboratories; however, there has been a lack of government incentives to develop these products,” Victor Sanchez, CEO of Disur, a pharmaceutical distributor, told OBG. Due to budget cuts at the National Council for Science and Technology, future funding will be devoted to companies further along the technology development chain, and generic pharmaceutical products fall into that category. The country’s skilled labour force is also attractive for companies looking to develop new products. “Although the price of raw materials is equal around the globe, the price of researching and developing products, as well as the cost of labour, is much lower in Mexico than in the US or Europe,” Vicente Saro, director-general of Chinoin, a pharmaceutical firm, told OBG. “This presents a natural attraction for large pharmaceutical companies that are interested in these activities for the same quality but at a lower cost.”