The Pharma Legal Handbook

• Published date: 16 February 2022
• Subject Matter: Food, Drugs, Healthcare, Life Sciences, Food and Drugs Law, Biotechnology & Nanotechnology
• Law Firm: OLIVARES
• Author: Mr Alejandro Luna and Ingrid Ortiz

REGULATORY, PRICING, AND REIMBURSEMENT OVERVIEW

1. What are the regulatory authorities with jurisdiction over drugs, biologicals, and medical devices in your country?

The authority responsible for applying and enforcing the regulatory framework in relation to drugs, biologicals, and medical devices is the Federal Commission for Protection against Sanitary Risks (COFEPRIS), which is a decentralized agency of the Ministry of Health.

2. What is the regulatory framework for the authorization, pricing, and reimbursement of drugs, biologicals, and medical devices?

The primary legislation for the authorization, pricing, and reimbursement of drugs, biologicals, and medical devices is the General Health Law (Ley General de Salud) (HL) and its Regulations. These laws and regulations are supplemented by Guidelines and Official Norms (NOMS) published by COFEPRIS.

Price control in the private sector is based on a scheme of self-regulated maximum retail price (MRP) only covering patented products, overseen by the Ministry of Economy. Pharmaceutical companies' participation is voluntary. Under the price control each product's MRP must not exceed an international reference price, estimated as the average price in six major markets, plus a market factor. There are no established sanctions for violations of the MRP. In private sector, there is no reimbursement in Mexico.

In the private sector, most payments are made on an out-of-pocket basis. Private insurers are improving the level of pharmaceutical coverage as the private market in medicines has grown considerably.

Public acquisitions are supported by the Committee for the Negotiation of Drug Prices (CNDP).

For direct purchasing of patented products, the CNDP analyses the effectiveness of the drugs and relevant therapeutic alternatives and the feasibility and implications of an eventual substitution with equivalent medicines. The CNDP also conducts an economic evaluation of the cost-effectiveness of patented medicines compared with potential substitutes.

For the ISSSTE, a prescribed medicinal product can be dispensed in a private drug store registered with a public insurer, provided that this is not available within ISSSTE facilities and under certain conditions. The ISSSTE reimburses the cost of that product according to previous agreements.

The political party currently governing in Mexico (MORENA) is promoting an amendment to the scheme of self-regulated maximum retail price (MRP), which consist, in general terms, that the Ministry of Economy in collaboration with the Ministry of Health shall guarantee, through a transparent process and taking into consideration differentiated policies, the access to medications and inputs to people in situations of poverty. In addition, the price control would be regulated and annually reviewed by these Authorities.

On August 11, 2020, the Mexican Congress published the Decree amending Article 1 of the Public Sector Procurement, Leasing and Services Law, through which the Mexican Government is now empowered to acquire medicines through intergovernmental organizations, such as UNOPS, without having to observe the procedures set forth in the applicable Law and Regulation on public procurement.

According to UNOPS' guidelines, the process is made up of different stages grouped within three phases identified as:

1. Pre-Bidding Process (market research, requirements definition and identification of potential suppliers).
2. . Bidding Process (publication of the bases and call for bids and/or invitations for negotiation, bid management, evaluation and award).
3. Post-Bidding Process (contract management and logistics). The distribution to the final destination will be in charge of INSABI.

Therefore, during these proceedings UNOPS is entitled to negotiate the prices of the supplies.

3. What are the steps to obtaining authorization to develop, test, and market a product?

Manufacturers must obtain a marketing authorization from COFEPRIS to sell any medicinal product. Requirements and timeframes vary among new molecules, biologics, and follow-on products.

The Health Law Regulations sets out the following approval timeframes for small molecules:

• 180 calendar days for medicines, including an active pharmaceutical ingredient (API)/therapeutic indication already approved in Mexico.
• 240 calendar days for medicines not approved in Mexico but which are approved abroad.
• 180 calendar days for new drugs (a meeting with the New Molecule Committee is required).

The approval timeframe for biologics and biocomparables is 180 calendar days. These timeframes may vary in practice.

3.A. NEW MOLECULES

Essentially, applicants for marketing authorizations must prove safety and efficacy of their products through standard clinical trials, according to the rules set out by the General Health Law, its regulations and NOMs of good manufacturing of medicines and active ingredients.

Concurrently, they have to request approval of their products as new molecules by the New Molecules Committee of COFEPRIS. A new molecule:

• An active ingredient or drug not approved world-wide (new molecular entity)
• An active ingredient or drug already available in other countries but with limited clinical experience or disputed information, without approval in Mexico
• A drug which is a non-marketed combination of two or more active ingredients; and
• An active ingredient or drug already available in the market but to be marketed for a new therapeutic indication.

R&D companies can benefit from a special procedure for drugs to be approved for the first time in...