In Mexico pharma market is valued at $12 billion, out of which $8 billion is the audited sales. The remaining $4 billion constitutes social security business ($2 billion) and small time distributors ($2 billion), respectively

Strides Arcolab, one of India's largest exporters of branded generics, with its orals manufacturing facility in Mexico is garnering several tenders and supplies from local private hospitals. So far Strides has bagged five approvals in the region. The company has 125 employees at its Mexico facility. Besides, from its facility in India, the company exports sterile injectables (antibiotics and painkillers) to Mexico.

According to Ravi Seth, CEO, International Operations, Strides Arcolab Limited, a local hosting company is a must in Mexico to take advantage of the lucrative opportunities in the social security segment.

In 2004, the Mexican business indicated positive signs of growth. But in 2005, following an update of the pharmaceutical regulations representing Article 376 of the General Health Law, the country saw a major change in the regulatory requirements.

The new rules called for mandatory submission of bio-equivalence (BE) studies for all products, which are imported by Mexico for government tenders. This made exports from India both cumbersome and expensive. Submission of each BE report costs approximately $ 75,000. "This makes it important for us to increase our manufacturing presence in the region and look at production of products from mere orals to sterile injectables," said, Ravi Seth.

Despite the hurdles in Mexico, pharma companies still view the destination as one of immense potentials. There is a huge scope to produce and market immunosuppressants and sterile injectables.

The entire Latin American region has a large hospital supplies requirement. Branded generics are the focus for the private hospital supplies. The company is examining the possibility to increase its presence in the branded generics in the over- the-counter (OTC) segment too.

In Mexico pharma market is valued at $12 billion, out of which $8 billion is the audited sales. The remaining $4 billion constitutes social security business ($2 billion) and small time distributors ($2 billion), respectively.

The scene in the Mexico pharma market is bright and if Indian pharma companies have already set up production facilities there, then they are ideally poised to grab the first mover advantage. Sterile injectables are proving to be a lucrative opportunity. The company expects to increase its revenue share from the Mexico market to a significant extent.

There is a stiff competition in drug distribution. Pricing, submission of BE studies and need for local production presence are the challenges for pharma companies in the region. A huge price war exists in the social security business.

Under the circumstances, it is vital for companies to build relationships with distributors to become the preferred partners. There is also a need to ink partnerships with local companies. It is important for Indian pharma companies to have a local manufacturing operation for wider market access with a portfolio of products to have good market presence, stated Seth.

Early this month, Strides Arcolab and its South African partner Aspen have completed their transaction after which the latter holds a 50 per cent stake in Strides' Latin American operation. The Latin American business now becomes debt-free, with surplus cash available to pursue inorganic and organic growth opportunities.

Strides is known for its expertise in the production of formulations in various dosage forms, including capsules, tablets, liquid injectables and is one of the world's top five manufacturers of softgel capsules. It is the only company with a dedicated soft gel facility for hormones in the world.

The company has 14 manufacturing plants spread across the Brazil, Mexico, Italy, Poland, Singapore and India with product registrations in 37 countries. The Indian manufacturing facilities for the regulated markets are certified by MHRA, EU, TGA, MCC and US FDA. It is the one of the largest Indian suppliers of institutionally funded aid projects and is an approved supplier to the World Bank, the African Development Bank and UNICEF. The company's total personnel strength is 2500. In 2007, the consolidated revenues of the company was Rs.8,648 million [USD 216 million]