What Mexico’s presidential election has in store for the healthcare industry

By Ryan Brier | Published June 29, 2012

PRI presidential candidate Enrique Peña Nieto’s ambitions of providing universal healthcare and implementing social security reforms will significantly impact healthcare-related industries in Mexico over the next 6 years. Mr. Peña Nieto intends to consolidate public institutions and public hospitals, establishing the government as a major consumer of generic medical products. The government is likely to unveil cost-reduction initiatives that will redirect consumer preferences towards low cost generics. This increase in government spending will potentially prop up the demand of generic products at lower prices, cutting into multinational profit margins, and broadening Mexico’s generics market. FSG clients must consider modifying their strategies and expectations ahead of July’s presidential election.

FSG offers 5 possible strategies for success under the proposed reforms of the healthcare system:

1. Adjust sales strategy to the new market and prioritize sales to the Mexican government. Mr. Peña Nieto’s reforms will require a larger role for the Mexican government to step in and become a leading consumer in the healthcare market. Commercialization strategies aimed at engaging end-users and industry regulators will be a key factor.
2. Communicate changing standards and higher operational costs related to reforms as part of the finance strategy. Multinationals’ finance strategies must expect increases in regulatory standards and costs stemming from healthcare reforms.
3. Adjust marketing strategies to reflect the changing landscape and stakeholders. Social-Media and smart phones applications will be important in capturing the changing dynamic of consumer base.
4. R&D strategy must align with the government’s priority areas and localize R&D. Companies need to focus on the core areas that will be critical to the Mexican government. Medical tourism will boost demand for highly advanced and alternative treatments.
5. Public and private sector partnerships will become vital to future revenue growth strategies. Leveraging local and cross-sector partnerships will emerge as an essential component to stay ahead and generate revenue in the changing healthcare environment.