Navigating relentless regulatory headwinds and financial austerity

FrontierView recently hosted a group of Mexico GMs of major pharmaceutical, medtech, diagnostics, and life sciences multinationals to discuss Mexico’s macroeconomic and healthcare outlook for 2023. Even though Mexico will be a resilient market from an economic growth perspective, there was a common understanding among executives that healthcare-specific dynamics will hinder firms’ ability to meet more ambitious growth targets this year.

Macroeconomic growth in Mexico will be driven by consumer spending and exports.  Although healthcare companies’ top-line growth targets for 2023 are in line or higher than in 2022, healthcare-specific dynamics hinder firms’ growth expectations.

Top challenges for business growth in 2023:

  • While Mexico is well-positioned regionally to increase local manufacturing (nearshoring), many healthcare firms do not have plans to increase local production. For those considering this option, barriers to entry are driven in large part by regulatory constraints, as fiscal austerity, and weak governance in regulatory institute COFEPRIS contribute to a somewhat bleak expectation of innovation-led growth. Severely delayed approvals for both medical technology and pharmaceutical products impact short and long-term planning for healthcare firms, with high risk and low margins at stake.
  • Although private sector demand is driven by out-of-pocket spending, low utilization of private health plans limits the ability for firms to scale contracts with private payers. Opportunities for growth are driven by macroeconomic indicators (remittances, inflation), and firms’ confidence to pass on higher costs to prices has decreased since 2022.  Fragmentation and lack of transparency within the sector also limit firms’ planning capabilities.

FrontierView Solutions:

  • Firms can leverage FrontierView’s coverage of COFEPRIS’ regulatory strategies to build medium and long-term scenarios for go-to-market strategies.
  • Firms can pressure-test assumptions for 2023 growth by tracking FrontierView’s benchmarking of industry leaders’ expectations for growth in the public and private sectors.
  • Companies can build strategies for product launches and segmentation by payer based on FrontierView’s monitoring of healthcare financial indicators and therapy-specific Premium Healthcare Datasets (PHD) in the public and private sectors. Firms can also identify where there is greatest demand in the private sector through FrontierView’s coverage of out-of-pocket spending dynamics and private payer financial indicators.

Download an executive summary of the key highlights discussed during our Mexico Healthcare Executive Roundtable

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