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Low-cost products limit OTC sales in Mexico
Our Bureau, Mumbai | Thursday, June 15, 2006, 08:00 Hrs  [IST]

The regulatory environment in Mexico is not always clear regarding over-the-counter products and under-the-counter prescription drugs. The market for OTC medicines is a highly competitive environment and has become more so with the recent emergence of generics, through the company Farmacias Similares, and so-called "miracle products" with largely unsubstantiated claims from Genomma Lab.

The authorities are to some extent controlling some of these competitors, however, legislation is still vague and the effect that this competition is having on the OTC sector is uncertain. In addition, the ease with which most people can buy under-the-counter drugs puts the OTC market in a very difficult situation.

The pharmaceuticals market has become more complex since the approval of the Seguro Popular, a public policy that will provide low cost medical services to people currently excluded from government provided healthcare. The Seguro Popular initiative is intended to target around 50 million people in seven years (by the end of 2010).

One aspect of this service will be that both prescription and OTC medication provided through this service will be generic, rather than branded. Generics are provided by smaller local manufacturers rather than the large multinational manufacturers that dominate the OTC market in Mexico.

New entrants

Probably the most notable market entrants in the last couple of years have been Farmacias Similares and Genomma Lab. These companies are gaining market share either through offering low prices (Farmacias Similares) or through strong and non-regulated television advertising (Genomma Lab). Both firms also represent a point of discussion arising from the pharmaceutical associations and chambers in Mexico, since they argue that these companies do not meet the General Law of Health, and promote unfair competition to the detriment of general public health.

Farmacias Similares has seen rapid growth since the modification of the Health Law, which permits the inclusion of generics in the market. Most of the multinational and local manufacturers have questioned several times the lack of quality controls and medical ethics at Farmacias Similares. Low prices have been at the heart of the success of Farmacias Similares. The company offers OTC and under-the-counter prescription drugs at low prices in approximately 1,300 establishments around the country.

Genomma Lab is a new firm that produces OTC medicines, and is run by young professionals. Genomma Lab has a strategy based on strong advertising campaigns, including television spots. The firm has a range of around 30 medicines, which include laxatives, wound treatments, and remedies for obesity, acne and other conditions.

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