FINE-TUNING THE FUNDAMENTALS

Mexico 2018 | HEALTH & EDUCATION | REVIEW

TBY talks to Miguel Salazar Hernández, Country Managing Director of Boehringer Ingelheim (BI) Mexico, Central America & Caribbean, on remaining an entrepreneurial family-owned company, adding value through innovation, and staying at the top.

What is the relevance of the Mexican market for BI in terms of production and sales?

In the past, our largest businesses globally were human pharmaceuticals—prescription and OTC—animal health, and bio pharmaceuticals. BI has been growing faster in the Mexican market than the rest of the globe. In 2017, we managed growth above 16%, and that is only in the Mexican private market, as we also participate in the government market. We are close to 3% market share in values. BI has three manufacturing facilities in Mexico; it is perhaps one of the few pharmaceutical companies that decided to invest in Mexico for manufacturing. We have two manufacturing facilities for human pharma and one manufacturing facility for animal health in Guadalajara.

What are the advantages and disadvantages of functioning as a family-owned business?

We invest more than 20% of our own income and funds into R&D. We do not necessarily need to go out and chase capital. We may be the only pharmaceutical company that is privately owned. Since our founding in 1885, BI has clearly stated its intention to remain a privately owned independent company in order to foster growth for the future. The reason why we are an independent company is because we believe in long-term investments and entrepreneurship. Our company has clearly written in our guidelines and statements that remaining an entrepreneurial family-owned company is key for the success of BI. We are not pushed by the stock market nor are we driven by the highs and lows of investments—we are driven by long-term R&D.

What criteria do you use to select and prioritize these areas of focus in your research?

There are three elements: the need for innovation, best-in-class products, and unmet medical needs. That means we will not go into research in areas where there are 1,000 competitors or participants. We do not like to just go in; we want to be innovative, which is part of our belief as a company. The vision of BI worldwide that we also share in Mexico is adding value through innovation. For example, we do not do rheumatoid arthritis because there are many companies researching that area; we go more in the specialized fields for diseases such as cancer, myocardial infection, or strokes, for example. We need to concentrate so that we do not run out of funds. Diabetes represents more than 23% of the total income for BI Mexico. In merely a few years, the portfolio has shifted from old and ancient products to specific innovative drugs that take up almost one-quarter.

What does your acquisition of Sanofi Merial mean for the animal health industry in Mexico?

In 2017, we became the number-one company in Mexico in the animal health sphere because we acquired an important business that helped us reach the top. We are ranked number 10 in Mexico, with 3% market share, and a strong position for human pharmaceuticals. In animal health, we are number one, with 22% market share. The market is growing at around 6%, and we are growing close to 16% for both businesses. OTC products did not necessarily help us become known or contribute to the world, which is why we decided to let it go. We exchanged our OTC business with Sanofi's animal health business, a perfect swap.

How does BI contribute to the competitiveness of Mexico as a hub for exporting agricultural products?

One of the country's biggest challenges in the last decade has been influenza, and we manufacture vaccines for Mexico and the export market. BI produces vaccines and pharmaceutical products for the country's growing needs, and we are very strong in this market.

Miguel Salazar Hernández
MIGUEL SALAZAR HERNÁNDEZ
Country Managing Director, Boehringer Ingelheim (BI) Mexico, Central America & Caribbean
Miguel Salazar Hernández joined BI in 1994 and has overseen the Mexican operations of the company since 2010. He has served in a variety of positions such as IT Sub-Director, Business Intelligence Manager, and head of the corporate department for launch readiness. He holds a degree in computer science from Anahuac University, as well as an MBA from Tec de Monterrey.