Big pharma faces little competition in Mexico, says competition agency

Big pharma is confronted with little competition in Mexico, with 22 drugs facing no generic rivals in the country.

This is the finding of a probe by Mexico’s Federal Commission for Economic Competition (COFECE)—a government agency—which was released yesterday, August 9.

According to the commission, the lack of competition is partly a result of regulatory failures and public policy.

The report noted four important factors impacting competition in the country.

First, the entry of generics into the market is slow—more than two years elapse between the expiration of a patent and the launching of the first generic.

This is in contrast to the US where generics are “presented immediately” for best-selling drugs, and seven months in the EU, according to COFECE.

Second, the expiration of patents has not “translated into sufficient competitive pressure in the market”.

It identified 22 innovative drugs whose patents have expired but for which no competitors have applied for registration and which do not face any generic competition in Mexico.

COFECE’s third factor is that the entry of alternative generics doesn’t translate into much lower prices for the consumer.

Two years after the entry of the first generic, the average price of the generic is 28% lower than the price of the original drug.

“However, the price reduction in Mexico is less pronounced compared to, for example, 40% of the EU,” claimed the watchdog.

Finally, health regulations in Mexico restrict the possibility of replacing brand name drugs with generics when the doctor doesn’t explicitly list the generic name in the prescription.

The report added that the ability to protect the same drug with more than one patent favours exclusivity, because competitors are forced to engage in litigation in order to market the original formula.

According to the watchdog, there has been an increase in an average of 1.2 to almost 2 patents per active substance, which extends the market power of the drug.

COFECE advocated greater transparency to increase certainty, a strengthening of competition-friendly rules, promotion of generics to doctors and consumers, and the making available of generics to the public.

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