Mexico moves towards nationwide drug megapurchases, distribution

GBI’s key takeaways:
  • Mexico has taken an important step towards merging its public health institutions by introducing an all-encompassing drug purchasing scheme for the sector, while appointing Birmex as the main distributor in the country.
  • Drug purchases are now to be headed by Seguro Popular, possibly because the larger IMSS will need more complex reforms to prepare for the institutional fusion.
  • Larger, fewer drug tenders implies serious consequences for unsuccessful bids, leaving drug providers to draw upon their experience with the consolidated purchasing system.

  The Mexican government has introduced a new drug purchasing scheme for the public sector, under which Seguro Popular will now push consolidated drug purchases nationwide, while state-owned firm Biológicos y Reactivos de México (Birmex) will be in charge of market monitoring and distribution. While joint purchases were previously optional, under the new framework each of the 32 state governments must detail their needs to the Ministry of Finance and Public Credit (SHCP) through the Drug Planning System (SIPLAM) portal prior to a joint purchase. After being reviewed by Seguro Popular’s National Commission for the Protection of Social Health (CNPSS), the local governments and the national public health institutions, such as the Mexican Social Security Institute (IMSS) or the Mexican Institute for Social Security and Services for Civil Servants (ISSSTE), will receive their orders from Birmex upon product delivery.

  The first of such purchases is already underway, with 22 local governments participating as the CNPSS will initially exempt those that have existing contracts with drug providers. Meanwhile, pharmaceutical companies are expected to receive requests for quotations to enable market research before the tender. The tender will be launched later this month with the aim of receiving medicines in April and vaccines in July.

  Although Seguro Popular is focused on basic care, the purchases will not be limited to its list of covered drugs, but will instead be a more widespread version of the consolidated purchases previously led by IMSS. The separation between the drug tender and the distribution process might be another example of the blending between these two institutions, as IMSS last month announced its intention to separate tenderings for product supply and distribution, contrary to the conventional unified contract schemes, as GBI reported.

  The new framework can be seen as a step towards the goal of merging public health institutions into a universal healthcare system, a plan that was announced in November 2018 and whose gradual implementation was said would start with a greater interaction between the public healthcare systems, as GBI reported. The reason drug purchases are changing hands from the country’s largest public institution IMSS to the relatively new Seguro Popular could be that both IMSS and ISSSTE will need substantial reforms to disengage from its social welfare, pension, and housing fund services before they can be merged with the other public health institutions.

  As with the universal healthcare system plan, the incoming drug purchasing scheme implies tighter competition among drug manufacturers, only this time their distributors are being left out of the deal in one fell swoop. However, what was expected to be a gradual transition into a system with a single, giant drug purchaser due to its complexity, has reared its head overnight with the merging of the public health provider’s requirements long before the institutions themselves start preparing for the fusion.

  As was proposed in GBI’s analysis on the universal healthcare system, in this more competitive scenario unsuccessful bids to the mega purchases will entail more serious consequences, leaving as only alternatives private hospitals and any non-participating states or institutions, which only represent one-digit percentages of the patients pool. Providers of drugs with competitors on the market are thus left to draw upon their experience with the consolidated purchasing system, or perhaps with countries such as Brazil, to secure a slice of the pie in Mexico’s public sector.

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