70% BUSINESS WITH GOVERNMENTAL INSTITUTIONS

Mexico 2019 | HEALTH & EDUCATION | VIP INTERVIEW

TBY talks to Marco Ruggiero, General Manager of Chiesi Mexico, on the importance of the Mexican market, introducing innovative products, and access to medicine.

How important is Mexico for Chiesi's overall business strategy?

Mexico is one of the most important countries in Latin America for Chiesi in terms of potential and evolution of the market and environment. Mexico can be a great opportunity for Chiesi Group. We started in Mexico almost seven years ago, and our portfolio in the respiratory line is now complete, including several products mainly for asthma and COPD.

What are the main opportunities in the local health market?

The key opportunities are bringing innovative products into the market. Many products have been approved by US or EU medical authorities. They are innovative products that can truly change the lives of patients, including new combinations of existing drugs as new formulations. Chiesi can contribute to improving the Mexican healthcare system by being listed among government institutions, while also working with private markets to increase coverage and to reach the highest number of patients. Rare diseases also represent a recent strategy for Chiesi Group. Chiesi made several acquisitions of companies over the last seven years in order to establish this pillar. Many of these programs are approved and are on the European market. In Mexico, we need to conclude our regulatory exercises with COFEPRIS in order to finalize the registration in Mexico and hopefully to bring in rare disease products. Unfortunately, every country has its own regulatory flaws, and the new procedures in Mexico could take months or years to develop.

What kinds of rare diseases is Chiesi focusing on?

We have several products for diseases that are unfortunately not well known and, therefore, do not have any treatment options available in the market right now. By working on rare diseases, we want to improve and save the lives of patients all around the world. The key aspect of our business is figuring out how to help institutional payers to reimburse these treatments.

What is your perception of the health regulatory system, and how can it be more efficient?

We are in a kind of transition year right now, between the old government institutions and the new ones. Many things have changed in the last nine months. The new government had many ideas on how to reform or restructure healthcare. We need to have a new panel of stakeholders in COFEPRIS, as well as in the key governmental institutions. But the situation is still in progress. We do not have the final picture yet. Many changes have been necessary. COFEPRIS is an internationally recognized institution, with peculiar agreements with American, Japanese, and European FDA. This is an advantage because, in many cases, it allows us a regulatory fast track for innovative products already approved in Europe or the US. In terms of changes in the way the government is buying products, this is becoming more complicated than in the past. We need more experience and time to understand the new dynamics, which are moving in the direction of having a more transparent system with fewer complicated procedures. Pharmaceutical companies have a significantly higher level of exposure than in the past complicated by day-to-day work, tenders, distribution, and collection of credit. If you cannot collect cash, it will hurt your business.

What is the breakdown of your business between the public and private sectors?

Chiesi Mexico does almost 70% of its business with governmental institutions. Amid the changes happening in the government procurement processes and the delays in tender publications, we are trying to involve ourselves in the new dynamics. It is more complicated than in the past to be involved. The risks can be much higher now, so the companies will have to revise internal procedures and flows to comply with new tender relations.

How is the government's prioritization of social needs affecting Chiesi in Mexico?

What we can comment on is the way access is generated now, which is expected to be different than in the past, with the deceleration of the universal healthcare system. This is something that still needs to change. The universalization of the healthcare system is not yet there. The provision of social security to 20 million uninsured Mexicans is not yet there. There are still processes to go through. It is going to be a long reform. We have a long way to go still. However, there has been a change in procurement activities and the way the government buys from pharma companies. We do not have an impact from prioritization, but we are affected by the way products are required. For example, the new law is centralizing procurement by the government, which means someone else has to take care of distribution. In a big country like Mexico, special logistics are needed to bring a product from one point of the country to another. This is not easy, and there are specialized distributors with the know-how and logistics instruments to do that. The next logistics flow expected by the new procurement procedures does not include all these unique elements to the industry.

Why did Chiesi launch its triple treatment therapy for COPD first in Mexico?

We had the honor of launching TRIMBOW® in Mexico for the first time outside Europe thanks to COFEPRIS agreement with the European Medicines Authority (EMA). The product, already approved by EMA, was immediately recognized by COFEPRIS, which allowed us to complete all regulations in a timely fashion. It has been a benefit for Mexican scientific community but, moreover, for patients. If you suffer from a common but severe disease like COPD and you are not satisfied by existing drugs, you want a new product to be available as soon as possible.

What new products and services are you planning to launch in Mexico in the coming months?

We will launch the first of our rare disease products, after sorting out the regulatory procedures. This will be the first milestone for Chiesi Mexico in rare disease and will hopefully be the first of a long series of launches over the coming years. We want to make our products available where they were not previously available. Mexico is a complicated country in terms of patient access to medicines. We hope to work together with the government to develop sustainable access models. I wish for the new government to understand the real concept of buying pharmaceutical products. The cost of treating a patient using the most innovative products in the world may sometimes be more expensive but can help the total cost of treatment. All in all, it is a completely new approach based on patient's benefit: the real savings for institutions comes after getting a complete view of the entire treatment cost.