Mexico is seen to be emerging as a key market for the Indian pharmaceuticals industry. According to a report by Research and Markets, the Mexican pharmaceutical market, valued at USD 11.3 billion in 2005, is the leading Latin American market and the ninth largest worldwide.
Although general medicine sales in Latin America slumped 10% in 2002 caused by economic turmoil, generic medicine sales offset part of this slump. Generic sales have been growing rapidly since approval in 1999. Annual sales increased from USD 129.8 million in 2001 to 259.7 million in 2003, an increase of 100%. However, generics still have a relatively minor participation in total sales of the pharmaceutical market.
Mexico also has a relatively nascent generic sector in comparison to its pharmaceutical market size. Local producers are SMEs but only a few are equipped to demonstrate bioequivalence. But this is set to change, as new rules were enforced in 2005. Bioequivalent generics are expected to penetrate the market of similar drugs and explore new markets. There is a new wave of generic producers looking for business opportunities in Mexico.
Additionally, Mexico's research environment is evolving rapidly against a backdrop of healthcare and social reforms. The government's commitment to improving access to high quality healthcare and a high demand for modern medicines from its growing population are helping Mexico emerge as the leading pharmaceutical market in Latin America.
Sensing the opportunity in Mexico, Indian and foreign generic producers have been expanding their presence in that country.
Further, Torrent Pharmaceuticals is planning to open its wholly owned subsidiaries in Australia and Mexico to expand its operations in overseas markets. India's largest drugmaker Ranbaxy Laboratories is looking to market Zenotech's injectible products in key markets of Latin America, including Brazil and Mexico, besides Russia and other CIS markets through its global distribution network.
Indian companies are looking at focusing on the semi-regulated Latin American market, as competition and entry barriers in these markets are low as compared to the US market. Companies like Glenmark Pharma, Cipla, Unichem Labs, Aurobindo Pharma and Zydus Cadila also have presence in the Latin American markets. The vast influence of macroeconomic factors such as globalization, economic deregulation and need to fund external growth on the local Latin American pharmaceutical industry has led to the growing interest of international companies establishing presence in the Latin American countries.
Out of the 50 odd deals that took place in the last two year in India in the Pharmaceutical space, 10% were in the Latin American market and this number is set to increase as more and more players explore other destinations around the globe.
(The author is AVP, Avendus Advisors)