«COFEPRIS’ International Strategy» June 2014. 2 Content I.COFEPRIS and the Economy II.COFEPRIS...

«COFEPRIS’ International Strategy»

June 2014

2

Content

I. COFEPRIS and the Economy

II. COFEPRIS in the International Landscape

III. Axis of Government: Mexico as an Actor with Global Responsibility

IV. COFEPRIS’ International Strategy

V. Actions of the International Strategy

VI. Conclusions

I. COFEPRIS and the Economy

Marketing

Imports

Exports

Advertising

Retail and supply

Production

Distribution

• The Federal Commission for the Protection Against Sanitary Risks (COFEPRIS) is the Mexican institution responsible to guard and preserve the citizen´s constitutional right to Health through sanitary vigilance, regulation, and outreach.

• COFEPRIS was conceived by law as a macro sanitary regulator compared to other international sanitary agencies which regulate specific industries individually.

Regulated Sectors

1. Food and Beverages2. Health Supplies3. Health Services4. Cosmetics and beauty products5. Pesticides, Vegetable nutrients

and Toxic substances6. Emergencies7. Labor Safety and Health8. Environmental Risks

5

The value of the products regulated by COFEPRIS represents 9.8% of Mexican GDP.

Indust

ria Alim

entar

ia

Indust

ria Tab

aco y B

ebida

s

Indust

ria Farm

acéutic

a

Indust

ria qu

ímica

Fabrica

ción d

e Fert

ilizante

s, pest

icidas

y otro

agroq

uímico

s

Fabrica

ción M

ateria

l Dese

chable

de us

o méd

ico, d

ental,

oftálm

ico

- 100,000,000,000 200,000,000,000 300,000,000,000 400,000,000,000 500,000,000,000 600,000,000,000 700,000,000,000

624,052,906,000

237,452,770,000 151,423,000,000 139,486,843,000

24,378,233,000 9,604,944,000

Industries Regulated by COFEPRIS(2009 last available year)

II. COFEPRIS in the international lanscape

7

COFEPRIS regulates about 11% of the total trade flow between Mexico and the rest of the world (64% of GDP).

Source: DEOI with data from Banco de Mexico (2014).

0

0.5

1

1.5

2

2.5

3

3.5 25,214 mdd

15,037 mdd

10,551 mdd

6,747 mdd 6,422 mdd5,394 mdd 5,142 mdd 4,732 mdd

2,200 mdd1,421 mdd

439 mdd

% o

f tot

al tr

ade

flow

8

• In 2011, imports of pharmaceutical products amounted 4.54 billion dollars, while exports were 1.77 billion dollars. There was an accumulated deficit of 2.8 billion dollars.

• On the other hand, the trade balance for medical devices presents a surplus. During 2011, exports of medical devices amounted to about 6.1 billion dollars, while imports were approximately 3 billion dollars. The trade surplus was higher than 3 billion dollars.

Source: Statistics of Foreign Trade INEGI (2013).

2008 2009 2010 20110

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

4,500,000

5,000,000

1,304,607 1,268,4251,458,430

1,773,910

4,063,4153,880,884

4,324,5404,540,081

Exports and Imports of Pharmaceutical Products, Mexico (2008-2011)

Exportaciones Importaciones

Mill

ions

of d

olla

rs

2008 2009 2010 20110

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

4,757,781 4,804,286

5,452,629

6,072,000

2,091,879 2,159,7922,410,862

3,032,000

Exports and Imports of Medical Devices Mexico (2008-2011)

Exportaciones Importaciones

Mill

ions

of d

olla

rs

9

III. Axis of Government: Mexico as an Actor with Global Responsibility

• Current Mexican administration established since the beginning of its term the need to have an effective government to generate concrete results that could be reflected in the well-being of Mexican families.

• To this goal, the Mexican government announced 5 axes of government policies that turn around of this objective. Axis number five, to achieve that Mexico become an Actor with Global Responsibility, is mandated to consolidate Mexico as a solidary country, committed to best causes of mankind.

• With the above as a guideline, the drug policy of Mexican government has been aligned with the 3 health priority axes:

Characteristics of pharmaceutical policy– Rests on four fundamental pillars

– The pillars are aligned with the 3 priorities of health policy established by the Federal Government.

– Its main objective is to improve access of the population to a well-supplied drug market that offers innovative and generic medicines at the best prices.

Pillars of Pharmaceutical Policy Government’s Health Policy Priorities

A regulatory agency that guarantees the safety, quality and eficacy of all drugs.

1. Effective Access2. Service quality

3. Prevention

A reliable scheme to authorize sanitary registrations.

Removal of barriers to market entry for products that are safe and of high quality.

Harmonization of the sanitary agency with best international practices.

Evolution of the Mexican Pharmaceutical Regulation

During this period the sanitary registrations for medicines had indefinite duration and without the legal obligation to be bioequivalent.

1. The legal requirement of bioequivalence is implemented.

2. A netwrork of laboratories is created to perform bioequivalence tests through Authorized Third Parties.

2001 2005 2010

First Saniitary Registration

issued in Mexico

July 5COFEPRIS is

created

Reform to the National Health

Law

2012

PAHO recognizes

COFEPRIS as NRA of

Regional Reference

1920 2014

WHO declares COFEPRIS a

Functional NRA

Domestic market with only two types of medicines: 1. Innovative Drugs2. Generics

Implementation of National Healh Law Reform on renewal of Sanitary Registrations

IV. COFEPRIS’ International Strategy

The international strategy of COFEPRIS consists on the harmonization with international best practices and is based on two main areas:

1. Modification of the Mexican regulatory framework to remove barriers to market entry.

2. Expanding the access of the population to health products, ensuring the safety, efficacy and quality.

Benefits of the International Strategy

• It increases access to innovative therapeutic options, which increase the quality of life and life expectancy of the Mexican population.

• It generates public and private savings from generics entry to the market.

• It boosts the competitiveness of the pharmaceutical companies.

• It facilitates Mexican companies to enter into pharmaceutical and medical devices markets in other countries.

V. Actions of International Strategy

17

Axis of modification to the Mexican regulatory framework to remove barrierts to market entry

1. Certification by the Pan American Health Organization (PAHO).2. Vaccines and drug recognition by WHO.3. PICS membership process.4. Participation in the International Medical Devices Regulation Forum (IMDRF).5. Strong protection of intellectual property rights.

Axis of Increasing access of population to innovative health supplies.

6. Agreement for the Promotion of Innovation.7. Recognition of Certification of Good Manufacturing Practices (GMP).8. Equivalence Agreements.9. Recognition of Mexican sanitary registries in other countries.10. Pacific Alliance.11. Agreements of Confidentiality and Cooperation Agreements between COFEPRIS and other

sanitary agencies.

Actions of the International Strategy

Modification to the Mexican regulatory framework to remove barrier to market entry

Modification to the Mexican regulatory framework: Certificación by PAHO

• In June 2012, COFEPRIS was recognized by PAHO due to its best practices regarding the inspection of quality and safety of health supplies used and consumed by Mexicans.

– The first sanitary agency to score 100% in its evaluation.

– The first sanitary agency to be recognized by PAHO jointly for drugs and vaccines.

• These actions translate directly into regulatory harmonization, legal certainty and transparency isolating discretionality and expanding access for Mexicans to safe medicines and vaccines.

• Mexico’s sanitary policy and legal framework proved to be coherent with PAHO’s objective and have allowed COFEPRIS to promote cooperation and regulatory harmonization abroad in countries such as Colombia, El Salvador, Ecuador, Chile, Costa Rica, Panama and Peru.

• In Latin America only 5 out of 45 (10%) national sanitary regulatory agencies have been recognized by PAHO with level 4 which is the highest possible level.

Modification to the Mexican regulatory framework: Recognition by the WHO of COFEPRIS for vaccines

COFEPRIS concluded the audit process for vaccines by the WHO:1) This process led to the recognition as a FUNCTIONAL National Regulatory Agency (NRA) regarding vaccines. 2) Seven critical steps were defined in order to obtain the recognition of the WHO:

STEP 1 Reunion with representatives of the WHO about future colaboration and execution of the cooperation agreement. April 16-19th, 2013

STEP 2 Harmonization of procedure and evaluation tools WHO-PAHO. June 3-7th, 2013

STEP 3 First Informal review in COFEPRIS with colaboration of WHO staff. August 20-21st, 2013

STEP 4 Internal auditing on the fulfillment of the evaluation tool and on the quality management system May – July 2013

STEP 5 Delivery all the evidence to the Share Point WHO website January 31st, 2014

STEP 6 Formal auditing to COFEPRIS by WHO regarding vaccines. March 10-14th, 2014

STEP 7 Report Closure: review of recommendation compliance. June 9th, 2013

The result of the audit was positive. Therefore, COFEPRIS is a FUNCTIONAL Regulatory Agency regarding vaccines.

• The formal process to access PICS has the following updates:

I. On December 09, 2013, COFEPRIS received the first report of observations made by the inspectors.

II. These observation state that the regulatory framework of COFEPRIS for inspections is sound, therefore only miminal clarifications are needed for COFEPRIS to make.

III. On April 14, COFEPRIS answered the observations made by the Secretariat of PICS.IV. It is expected than in May the process of access of the Mexican agency can be discussed.

• Membership in the PICS will represent benefits to both, the sanitary agency and the industry in terms of avoiding duplicity of inspections. This will be achieved by mutual recognition of GMP certificates among all 44 (countries) members of the scheme.

• Competitiveness of the domestic industry will be favored by the reduction of barriers to the entry of Mexican exports to international markets.

21

Modification to the Mexican regulatory framework: Process for Membership in PICS

• The IMDRF is the most recognized forum for countries working for convergence and harmonization in the regulation of medical devices.

• Mexico has participated in this forum since March 2013, as an observer, and in the near future it will acquire full membership, joining Australia, Brazil, Canada, Europe, Japan, USA and China.

• Thus, with the participation in international forums and the recognition by WHO, Mexico will go ahead in topics relevants for Mexican patients and industry. This will facilitate the access to innovative supplies and will foster the Mexican exports of medical devices.

Modification to the Mexican regulatory framework: Participation in the International Medical Devices Regulation Forum (IMDRF)

Increasing access of Mexican population to innovative health supplies

24

Increasing Access: Agreement for the Promotion of Innovation

• In the past, new molecules in Mexico took an average of 360 days to enter the pharmaceutical market.

• The agreement on new molecules represented an effort to strengthen the access of Mexican families to medicines, reduce health care costs and encourage innovation in three key areas:

1. Foster projects of innovation in Mexico.

2. Strengthen the entry of molecules from other countries to the Mexican market.

3. Mexico became a first country to market an innovative drug.

• The new regulation provides a framework by which Mexico became the fastest country to authorize the marketing for new molecules (from 360 to 60 days) while, at the same time, ensures the efficacy, security and quality of medicines.

Increasing Access: Agreement for the Promotion of Innovation• Mexico implemented equivalence agreements regarding medicines with the USA, Canada, Europe, and Australia.

This action has increased the access of Mexican population to medicines. • Additionally, Mexico substituted the requirement of a foreign free sale certificate with a report of clinical studies in

Mexican population in order to incentive pharmaceutical innovation.• Two new molecules have entered the Mexican market as a global launch pad: Lixisenatide used to treat Type 2

Diabetes and Fluticasone/Vilanterol used to treat Chronic Obstructive Pulmonary Disease (COPD).

25Méx

ico

(ant

es)

Cana

dá

Arab

ia S

audi

ta

Sing

apur

Espa

ña

Aust

ralia

Chin

a

Esta

dos

Unid

os

Rein

o Un

ido

Arge

ntin

a

Indi

a

Bras

il

Méx

ico

(con

ac

uerd

os)

0

100

200

300

400360

300 290270

220203

180 180150

120 12090

60

Days to Grant Registration for Innovative Drugs

Num

ber o

f Day

s

26

Oportunity Cost (in million dollars) Regulatory Burden (%)

Benefits of the agreement on new moleculesBefore the agreement With the agreement

Decrease in opportunity cost of 40 million dollars (500 million pesos). Reduction in regulatory burden

of 82%.

45 million dollars

7 million dollars 100%

18%

• The opportunity cost associated with the days a file is processed has decreased in approximately 40 million dollars (500 million pesos). This cost was estimated in 45 million dollars (570 million pesos).*

• Further, with the equivalence agreement on new molecules, the regulatory burden for each file decreases in 82%.

* Calculation of the opportunity cost consists of the daily administrative cost to process registrations for new molecules multiplied by the number of days requeried to grant authorization.


27

Impact of innovative medicines on public health

• International research has shown that the introduction of innovative drugs shows a high positive correlation with life expectancy.

• In the absence of pharmaceutical innovation, there would be no increases in life expectancy of individuals.

• The data shows that the introduction of innovative drugs increases the income of a person (in his life cycle) in approx. 0.75-1% per year.


28

ESTIMATED BENEFITS OF DEREGULATION1,339 GMP applications eliminated

Concept Million USD

Reduced Aggregated administrative burden 15.2Reduced Aggregated Opportunity Cost 1,850.4 Total Economic Benefits 1,865.6 0

Savings as percentage of GDP 0.015%

• The economic benefits are composed in 99% of the opportunity cost of the termination of the administrative process and represent about 200 million dollars.

• Each day the termination of an administrative process is delayed it has a cost between $50,000 and $60,000 pesos for the industry.

Increasing Access: Recognition of Certificates of Good Manufacturing Practices. Savings derived from the measure

Increasing Access: Issuance of Registrations through Equivalence Agreements

Received Applications 3,811

Market Value of the applications 353 million dollars in the Mexican market(1.2 million pesos each registration).

Reduction in the Regulatory Burden 40%

Approved Applications64% from FDA

33% from Health Canada3% from Japan

The Incoming Applications Correspond to:(Medical Devices)

35% Class 138% Class 227% Class 3

• The scheme is based upon the recognition of the registrations issued by FDA, Health Canada, and Japan for medical devices of any class and COFEPRIS will issue the corresponding registration in a maximum period of 30 working days.

• To this date 2,947 sanitary registrations have been approved by COFEPRIS.

30

• Sanitary registrations issued by COFEPRIS are currently recognized in 6 countries: Ecuador, El Salvador, Colombia, Chile, Costa Rica and Panama.

Increasing Access: Recognition of Sanitary Registrations Abroad

Increasing Access: Pacific Alliance

• There is a regional regulatory weakness in sanitary issues since the regulation does not provide mechanisms to ensure local production of generic bioequivalent, making nugatory the savings associated with these products.

• In this situation, governments are in the need to acquire only patented versions of medicines, which exceed about 65% the price of generics.

• In Mexico, the health law allows a robust licensing scheme of bioequivalent generic medicines. This was recognized by the Pan American Health Organization (PAHO) in 2012, through the granting of the Level IV, the maximun level of recognition for a sanitary agency.

• PAHO has created a mechanism to secure access to pharmaceuticals for countries that do not have the ability to guarantee safe generic pharmaceuticals.

• The mechanism involves the Certification of Sanitary Agencies to ensure the authorization of medicines and vaccines in accordance with best international practices, conferring them the status as a National Regulatory Authority of Regional Reference Level IV (Level IV NRAs are: Argentina, Brazil, Colombia, Cuba and Mexico).

• In the case of Mexico, the policy of access to generic medicines from the federal government has enabled extraordinary benefits for the population and the public sector. With the access mechanism between agencies, the population of both countries would benefit.


• In 2.5 years, this has allowed the approval of 287 generic drugs that correspond to 31 active substances. They attend the 71% of causes of death in Mexican population.

• There is no international record of a strategy of liberation of generic drugs of such magnitude and in a short time.

• Savings of 1.5 billion dollar were made in 2 years, and more than 1 million of additional patients were treated in the public sector.

33

Number of Packages

Released Substances New Generics Accumulated savings

(billion dollars)Aditional Patients

11 31 287 1.5 1,124,922


34

• The average price of medications in drug stores has decreased 62%.

• The average price for public purchases of medications has decreased 60%.

Before the delivery of active sustances After the delivery of active sustances $0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

$1,800 $2,073

$809

$788

$324

Medicine Prices in Public Sector and Private Sector, Mexico (2013) Prices for Private Sector Prices for Public Sector

Time

Reduction in prices of 62%

Reduction in prices of 60 %

Increasing Access: Savings in medications in both private and public sectors (2011-2014)

• Average savings of 65% created by the reduction of prices, compared with the innovative substance, in the first 3 years.

The substances in the sample: Atorvastatina, Clopidogrel, Escitalopram, Irbesartán, Losartán, Montelukast, Pioglitazona, Rosuvastatina, Sildenafil, Telmisartán, Valaciclovir, Valsartán.

Tiempo$0.0

$10.0

$20.0

$30.0

$40.0

$50.0

$60.0

$70.0

$80.0

Expectations of lower priceswith the harmonization mechanism of NRAs in the PA

Average prices in the Mexi-can market = U.S. $ 12.13


• Drastic and immediate increase in the supply of pharmaceutical products modifying the portfolio of choices available for patients.

Price

Red

uctio

n in

M

edic

ine

Pric

es

Availability of Medicines Increased Supply

of Medicines

Result of Cooperation

between NRAs


37

• It has been estimated that out of pocket expenditures in members of the Pacific Alliance could be reduced around 16.3% (as a percentage of health expenditures) in 3 years.

Fuente: COFEPRIS (2013) con datos del Banco Mundial (2011).

Actual Year 1 Year 2 Year 30

10

20

30

40

32.73

22.9119.63

16.36

Projected Average Pocket Spending in Countries of the Pacific Alliance (as a % of Total Health Expenditure)


Conclusions

Conclusions

The international strategy of COFEPRIS can generate the following benefits:

• An increase in the potential number of patients who will benefit from drugs with sanitary registry from COFEPRIS.

• An increase in the catalog of drugs to treat diseases that are the major causes of mortality in the population.

• A reduction in drug prices, an increase in the access by patients and a decrease in out of pocket spending by individuals.

• An increase in the public sector capacity to attend more patients.• Participation in international forums and agreements on drugs regulation, and

harmonization of pharmaceutical regulation.• Strengthening of the relationship with other sanitary agencies from the continent.• Recognition from international sanitary regulatory agencies.

40

• In 2010, about 30% of the market value corresponded to generic drugs, while in 2012 this figure rose to nearly 52%. This represents an increase of 77% in just two years.

• On the other hand, generic drugs in 2010 represented 54% of the market volume, while for 2012 accounted for 84% of the pharmaceutical market in Mexico. This represents a growth of 56% in the period 2010-2012.

2010 2012 2010 2012Valor de mercado (%) Volumen de mercado (%)

0

10

20

30

40

50

60

70

80

90

29.3

51.9 54.0

84.1

Penetration of Generics in the Mexican Pharmaceutical Market, 2010-2012

Mar

ket s

hare

(%)

Source: Funsalud. Analysis with information from IMS Health (2012).

Market share (%), value Market share (%), volume

• Mexico is one of the countries with the highest penetration of generics in the pharmaceutical market.

• Of the countries studied, Mexico has the greatest value of the generic market, almost 52%. It also has the highest penetration in terms of market volume, 84%.

41

México Canadá Alemania Reino Unido Francia Italia España Japón E.U.0

20

40

60

80

100

51.937 37 35 33 26 24 23 21

84.167 68

7863

4454

44

68

Penetration of Generics Drugs in the World, 2012Valor Volumen

Parti

cipa

ción

de

mer

cado

(%)

Fuente: IMS Health (2012). Funsalud (2012).

• Mexico gained two positions in pharmaceutical spending as a percentage of total health expenditure, from 28.3% in 2010 to 27.1% in 2011.

• This development is associated with the access strategy for pharmaceuticals from the Ministry of Health, which have generated savings of 20 billion pesos in 2 years. This rate will continue decreasing, according to the 2011 figure.

Hunga

ry

Greece

Slovak

Repub

lic

Mexico

(201

0)

Mexico

(201

1)

Poland

Estonia

Japa

n (20

10)Kore

a

Czech

Repub

lic

Sloven

ia

Portug

al

Irelan

dSpa

in

Canad

aOECD

ItalyFran

ce

Belgium

Austra

lia (20

10)

Icelan

d

German

y

Finland

Chile

SwedenAus

tria

United

States

United

Kingdo

m (200

8)

Switzerl

and

Netherl

ands

New Zea

land

Luxe

mbourg

Norway

Denmark

0

5

10

15

20

25

30

35

40

0

0.5

1

1.5

2

2.5

3

33.4

28.5

27.4

28.3

27.1

22.5

21.5

20.3

20.2

20.0

19.5

17.9

17.5

17.4

16.6

16.4

16.2

15.6

15.5

15.4

15.4

14.1

13.2

12.6

12.1

11.7

11.7

11.4

9.4

9.4

9.4

8.4

6.8

6.8

Spending on Pharmaceuticals in different countriesGasto en medicamentos como % del gasto total en salud (lado izq.)Gasto en medicamentos como % del PIB (lado der.)

% o

f tot

al h

ealth

exp

endi

ture

% o

f GDP

Spending on pharmaceuticals as a % of GDP (right axis)Spending on pharmaceuticals as a % of total health expenditure (left axis)

43

• The policies of the generics drugs access implemented in Mexico and the certification as a NRA level IV by PAHO have helped to reduce out of pocket spending in Mexico.

• Between 2011 to 2012, the out of pocket spending in Mexico has decreased from 46.5% to 44% of total health expenditure.

Source: World Bank (2014).

México (2011) México (2012) Perú Alianza del Pacífico Chile Colombia OCDE0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

46.52 44.08

35.72

26.92 26.43

14.76 13.62

Out of Pocket Spending in the Pacific Alliance, 2012(as a % of Total Health Expenditure)

Out

of P

ocke

t Spe

ndin

g (a

s a

% o

f Tot

al H

ealth

Exp

endi

ture

)

Pacific Alliance

Issuance of 546 sanitary registrations per month, on average, in the period

March, 2011- May, 2014

• A total of 10,729 sanitary registrations have been issued from June 2012 to May 2014. This improvement implies an average of 466 monthly registrations. The issuance of sanitary registrations will continue growing given that COFEPRIS regulates 10% of GDP.

The issuance of 21,292 sanitary registrations from March 2011 to May 2014, represents a market value greater than 2.4 billion dollars, and has a growth rate of 13,908% relative to 2010. Progress has been as follows:

2010 2011 41061 41091 41122 41153 41183 41214 41244 41275 41306 41334 41365 41395 41426 41456 41487 41518 41548 41579 41609 41640 41671 41699 41730 417600

5,000

10,000

15,000

20,000

25,000

152

7,419

10,56311,312

11,618 11,90013,344

13,70013,87314,38414,65715,10015,60216,01716,45316,673

17,39417,86218,23318,74519,20919,82319,97720,377

20,91621,292

• The pharmaceutical policy implemented by COFEPRIS has increased the value of the Mexican market. In 2012, the value of the pharmaceutical market in Mexico was estimated in 13 billion dollars.

• Mexico is placed among the 15 largest pharmaceutical markets in the world and holds the second place among Latin American countries.

• The pharmaceutical market expanded by an average annual rate of 4.7% from 2005 to 2012. However, from 2011 to 2012 the annual growth rate of the pharmaceutical market was 6.5%.

Source: Authors´s elaboration with data from INEGI * Value estimated for 2010 and 2011.

2005 2006 2007 2008 2009 2010 2011 20120

20,00040,00060,00080,000

100,000120,000140,000160,000180,000200,000

Value of the Pharmaceutical Market in Mexico(2005-2012*)

Millio

ns o

f Pes

os

Average Annual Growth: 4.28% Annual Growth: 6.5%

«COFEPRIS’ International Strategy»

June 2014

«COFEPRIS’ International Strategy» June 2014. 2 Content I.COFEPRIS and the Economy II.COFEPRIS...

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Transcript of «COFEPRIS’ International Strategy» June 2014. 2 Content I.COFEPRIS and the Economy II.COFEPRIS...