PATRICK TROOP
Pharma Tycsa started out as a pharmaceutical distributor for the government but has over the years invested in drug compounding centers to become a key player in Mexico's healthcare industry.
What is your perspective of the current health industry given the changes taking place in the country?
Change always presents opportunities, especially now given the developments in Mexico's healthcare environment, particularly in the public segment, which is Pharma Tycsa's main area of concern. This change promises to be positive, as the president has acknowledged that dominant players were controlling the market, thereby curbing competition, making for high prices and lax quality. The only downside at the moment is uncertainty as to where the industry is going. Sales have declined, and payments from the public sector have been delayed. For example, the Institute for Social Security and Services for State Workers (ISSSTE) has not paid a single invoice for the whole year thus far. We are not getting any answers from the government on this, although I have faith in its determination to address the situation.
What strategies is Pharma Tycsa using to diversify its portfolio to mitigate these risks?
Pharma Tycsa is pursuing private markets, especially through its newest division—oncology and nutrition. Pharma Tycsa started out as a pharmaceutical distributor for the government, and three years ago we launched this new division and invested in open drug compounding centers. There are three areas where we process drugs through compounding centers: nutrition, for example, compounded food for premature babies to be fed by tube; oncology; and antibiotics. At our compounding center, we prepare chemotherapy treatments. It involves opening drugs, mixing, preparing, and then repackaging them for patients to receive chemotherapy by catheter. We built the laboratory and it is regulated by COFEPRIS. We do not manufacture the drugs; they are sourced from various pharmaceutical companies.
What other investment opportunities has Pharma Tycsa identified?
Even though compounding practices are regulated by COFEPRIS, there was a monopoly of one company in Mexico that operated 90% of compounding laboratories. We started investing three years ago, and it took us two years to become licensed. The opening up of the industry will ultimately be positive for players and patients alike. Since the new administration came in, most of the monopoly-owned drug compounding centers have been shut down for not complying with regulations, presenting us with a prime opportunity. Today, there are only around five private companies doing this work, including Pharma Tycsa. Over the past three years, we invested around USD3 million and built four drug compounding centers for public and private healthcare providers alike. We want to invest a further USD5 million over the next two years and open seven or eight additional centers. That will depend on the government's plans for the sector.
Are there any other main projects that Pharma Tycsa is working on?
The company celebrated its 10th anniversary in October. Another group objective in healthcare is kidney dialysis, where we currently have five centers serving over 300 patients. Again, with the new regulations and the government's willingness to expand the market, we are also willing to invest in the renal area. We have a business plan to invest around USD3 million in additional dialysis centers over the next two years.
How does Pharma Tycsa plan to expand beyond Mexico?
We are planning to open a chemotherapy center in Peru. Tycsa Medical, our sister company, already has two centers in Lima with laboratory imaging and kidney dialysis. We own the building there and plan to open a chemotherapy practice there in 2020.
What are your main goals for 2020?
About 60% of our business is distribution and 40% drug compounding. My priority is to invest more in the compounding area. We have the infrastructure to support our commercial partners, namely the laboratories, and will continue to help them move their products nationwide. Depending on where the market is headed, we are willing to invest in new services and programs that are in line with the government's quality healthcare goals.
PATRICK TROOP
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