Snapshot: medicine and medical device pricing in Mexico

Pricing and reimbursement

To what extent is the market price of a medicinal product or medical device governed by law or regulation?

Mexican laws do not establish specific provisions concerning medicinal product pricing for either the outpatient or inpatient sectors. However, several mechanisms are in place, enabling a certain degree of control of such prices in practice.

Private-sector price control is based on a scheme of self-regulated maximum retail price (MRP) covering patented products only and is overseen by the Ministry of Economy. Pharmaceutical company participation is voluntary. Under the price control, each product’s MRP must not exceed an international reference price, estimated as the average price in six major markets, and a market factor. There are no established sanctions for MRP violations.

In 2008, the government created the Committee for the Negotiation of Drug Prices (CNDP). Until 2018, recommended prices for patented and unique drugs (or those with exclusive distributors) for all public institutions were formerly negotiated with the CNDP under the supervision of the Ministry of Public Function and the Mexican Antitrust Authority (COFECE).

Under that scheme, the price review and eventual changes are done annually. This new administration is implementing modifications frequently, so it can impact the frequency of price change. Please anticipate that the austerity measures that have been taken by the government recently will continue and may drive a more frequent price review.

Regarding the public acquisition of innovator drugs covered by patent rights, the price is negotiated in bulk between the patent or licence holder and a government commission for price negotiation. The negotiation proceedings end with a single yearly price for all public sales.

Off-patent drugs are purchased through public tender proceedings, where a reference price is set, based on previous purchasing experiences (ie, a maximum amount that can be paid for a specific drug), and the lowest bidder is assigned the tender.

Since the government is the main drugs purchaser, pricing for publicly acquired drugs helps regulate prices in the private sector.

Must pharmaceutical and medical device manufacturers negotiate the prices of their products with public healthcare providers?

Yes, prices for patented drugs are negotiated with a government commission and set for every public acquisition. When patent rights have expired (or in some cases when there is more than one participant in the market), drugs are acquired through public tender proceedings based on previous purchasing prices.

In which circumstances will the national health insurance system reimburse the cost of medicines?

Typically, public insurers dispense medicinal products prescribed by their healthcare professionals to patients. Products are prescribed and dispensed from a basic medicinal products list, which public insurers essentially based on the National Formulary issued by the Ministry of Health (MoH). Public insurers acquire those listed products mostly through public tender processes.

Public healthcare institutions, scientific organisations, medical devices and pharmaceutical providers may request a product to be listed in the National Formulary. Essentially, the principal conditions for listing eligibility are that the product has marketing authorisation, has met all safety and efficacy tests (clinical trials) as applicable and is cost-effective (pharma economic tests).

The Mexican Social Security Institute (IMSS) is the largest public-sector drugs purchaser. Public institutions may have their own formulary, such as in the case of the IMSS, whose formulary contains fewer drugs than the National Formulary.

Additionally, in the case of the Civil Service Social Security and Services Institute (ISSSTE), a prescribed medicinal product can be dispensed in a private pharmacy registered with this public insurer, provided that it is not available within ISSSTE facilities and under certain conditions. The ISSSTE reimburses the cost of that product to the pharmacy according to previous agreements.

In 2014, the National Formulary has included some orphan drugs and the Mexican Supreme Court ordered the IMSS to request the MoH evaluate the inclusion of orphan drugs in the National Formulary before considering its purchasing.

There have been more and more legal precedents by the Federal Court ordering the national health insurance institutions to provide a patient with a drug that was not listed in any formulary or available. These precedents are not binding for other cases; however, they provide a basis for further debate in this regard.

If applicable, what is the competent body for decisions regarding the pricing and reimbursability of medicinal products?

While the Ministry of Economy is empowered to raise observations in the scheme of self-regulated maximum retail price, the Commission for Drug Price Negotiations, which is made up of several public offices, including the Ministries of Economy and Health, negotiate with the patent holder or licensee to establish a single price of a patented drug for all sales to the public sector. Likewise, as commented above, public insurers that acquire products through direct acquisition or public tender are the ones that decide on the corresponding reimbursement.

Are manufacturers or distributors of medicinal products statutorily obliged to give a discount to health insurance schemes or third parties?

There is no obligation in Mexican law for this specific point, but sales to public institutions are generally made at much lower prices than sales in the private market.