Biosciences and Healthcare

Dr. Francisco Medina GómezJalisco State Council of Science and

Technology (COECYTJAL)San Antonio , Texas, November 16th, 2012

Did NAFTA Deliver?

• In manufacturing, YES:– Mexico is a manufacturing powerhouse, on par with

Germany and China– Productivity soared 80% (but has become stagnated)– Mexican exports tripled

• But in the pre_NAFTA hype, it was the services which were expected to grow

• The results are in some cases poor and, in others, disastrous

The Services Sector

• Growth in FDI in retail, banking, tourism• BUT:– Local investment has declined– The wage gap is wider, Mexicans are poorer– Mexico has been unable to grow at an average

accumulated rate of over 2% in the last 20 years– Mexico is as dependent as ever on the U.S. economy,

in spite of a flurry of FTA´s– Mexico was the worst hit Latin American economy

during the recent world crisis

Is NAFTA to blame?• NAFTA´s founding fathers were carried away by trade

hype• Underestimated the stubborn reality of everyday life,

not subject to flimsy, trendy economic models of market vs State

• But if NAFTA did fail to meet the main objective of improving the lives of the majority of Mexicans on the street, it was also because of the dismal failure of four consecutive Mexican Federal Governments to date, to implement sound public policies to promote economic growth, that effectively channels the benefits from trade into other parts of the economy.

México Economy in PerspectiveGDP change 2004-2009

11 AGRICULTURA, GANADERIA, APROVECHAMIENTO FORESTAL, …21 MINERIA

22 ELECTRICIDAD, AGUA Y SUMINISTRO DE GAS POR DUCTOS AL …23 CONSTRUCCION

31 -33 INDUSTRIAS MANUFACTURERA43 COMERCIO AL POR MAYOR46 COMERCIO AL POR MENOR

48 -49 TRANSPORTES, CORREOS Y ALMACENAMIENTO51 INFORMACION EN MEDIOS MASIVOS

52 SERVICIOS FINANCIEROS Y DE SEGUROS53 SERVICIOS INMOBILIARIOS Y DE ALQUILER DE BIENES MUEBLES …

54 SERVICIOS PROFESIONALES, CIENTIFICOS Y TECNICOS55 DIRECCION DE CORPORATIVOS Y EMPRESAS

56 SERVICIOS DE APOYO A LOS NEGOCIOS Y MANEJO DE DESECHOS …61 SERVICIOS EDUCATIVOS

62 SERVICIOS DE SALUD Y DE ASISTENCIA SOCIAL71 SERVICIOS DE ESPARCIMIENTO CULTURALES Y DEPORTIVOS, Y …

72 SERVICIOS DE ALOJAMIENTO TEMPORAL Y DE PREPARACION DE …81 OTROS SERVICIOS EXCEPTO ACTIVIDADES DEL GOBIERNO

0 1,000 2,000

Miles de Millones de Pesos

Valor Agregado Censal Bruto (~PIB)

2009

2004

22.6%139.5%

56.7%101.0%

59.6%10.0%

6.9%48.9%

3.3%47.4%

2.5%45.1%

60.6%87.4%

32.4%60.6%

97.5%70.2%

49.6%

0% 50% 100% 150%

Crecimiento % VACB 04-09

Source: INEGI. Economic Census, 2004, 2009

The exceptions that prove the rule

• Two services sectors have shone brightly of their own accord:– ICT– Health Care

• With, without or even in spite of NAFTA, IT in México is blooming:– From 200 MM USD in 2002 to % Billion in 2012– Over 400,000 jobs created, 100,000 of them

though PROSOFT

ICT• Has created wealth• Has created a burgeoning middle middle C+ and

upper middle class B (50% growth from 2008 to 2010 in Guadalajara alone)

• Uses Mexican brainpower, Mexican talent, availability of plentiful young Mexican IT trained professionals and

• YES!– A Sound Economic Policy: PROSOFT

• Will continue growing at an accelerated 12 – 14% annual rate for the next 10 years

What about Health Care?

• Although this success story is a midget by ICT standards, Health Care is alive and well and poised to become one of the fastest growing sectors in the context of NAFTA

• What are the causes underlying this success?• Specially in a country where Health Care is

considered socialized?

Coming of Age

• Our medical doctors and our specialists are– extremely professional, – extensively trained in clinical practice – A significant number trained abroad– Well versed in applying modern scientific knowledge– technologicaly savvy– Young and sexy– Open to change– And they smile at you!

Investment and Certification

• Our hospitals, both public and private have invested heavily in new equipments, new technologies, including ICT and good practices

• Growing trend to become certified, e.g. the Joint Commission

• Public policies have been successful in promoting health, increasing life expectancy

Major Achievements• All the major health indicators have improved

substantially, infant mortality has dropped • Compared to the appalling failure of Mexico´s

public (and even private) education system, the Health Care Sector has delivered.

• Mexicans now live longer to get the same kind of chronic diseases that US and Canadian citizens have.

• Our morbidity and mortality indicators are not very different from those of our two NAFTA partners.

Seguro Popular• And a sound public policy!• Enter Seguro Popular– With all its shortcomings, a major achievement

• From the Harvard School of Public Health:– Despite periods of economic downturns and crisis, Mexico

recently achieved a significant milestone – enrolling 52.6 million previously uninsured Mexicans in public medical insurance programs and thereby achieving universal health coverage in less than a decade.

– Sure, the public coverage is more basic, and Mexican facilities generally less advanced than their US counterparts. Yet it’s notable that a middle income country made this health policy a priority even when it’s rich Northern neighbor has not.

HEALTHCARE IN MEXICO

Competitive Private Health Care System

• The cost of medical care services vary by hospital, by physician, or by the seriousness of one’s condition.

• On average, an office visit to a doctor, including a specialist, could cost between 250 and 500 pesos (US$21 to $40).

• Lab tests could cost about one-third of the comparative cost in the United States.

• CAT scans are 25% cheaper than in the US. • Overnight stays in a private hospital room start at about $500

pesos (US$40) only.• Visiting the dentist for a regular teeth cleansing will cost

about three hundred pesos (US$22).

Source: Health Ministry

+ 50% of hospitals in Mexico are certified+ 8 private hospitals are certified by the Joint Commission International (JCI)

Source: Health Ministry

Source: Health Ministry

Source: Health Ministry

Biosciences

• Unfortunately, Biosciences as a business are linked to Big Pharma

• Big Pharma could not care less for helping Mexico grow– Mexico is a market to be exploited: huge

population, wide social security coverage, dubious and bureaucratic purchasing systems

– Mexicans make excellent clinical case study subjects, if you can deal with the socialized medical system

Mexico Pharmaceuticals Trade(MUSD)

Market Liberalisation• Automedication: 70 % of population takes drugs not

prescribed by their doctors• Low integration levels for production chains: no

access to competitively priced raw materials• Illegal imports through Tijuana• Imports of antiretrovirals released in August 2008. • Imports of vitamins, homeopathic medicines,

vaccines, sera, haemoderivatives, antitoxins and biologic hormones released in February 2009.

• Producers of other biologics (eg insulin and erythropoietin) export to Mexico since August 2009.

Market Liberalisation• Narcotic or psychotropic drugs and OTC drugs liberated in

February 2010.• Local manufacturing plant requirements phased out over

two year period: Market fully open by mid 2010• Competition expected to grow from middle sized foreign

producers who did not have the resources to invest in manufacturing in Mexico

• Only patented and bioequivalent generic drugs in the market as from 24th February 2010.

• 17% of the 10,500 pharmaceuticals whose registrations need to be renewed by the Federal National Commission for Protection against Health Risks (COFEPRIS), will probably exit the market

Forget about Big Pharma• Bring in Middle and Little Pharma!• FDI• Strong European presence• Great Veterinary Market• Promote Joint Ventures with Mexican Pharma• Liaison with excellent national and local research

centers throughout Mexico• The best research done in Mexico is in the Health

Sciences• If there is again a Nobel Prize made in Mexico it will be

in Medicine/Physiology

Growing Number of Researchers in Biosciences and Healthcare

Source: CONACYT

Federal Programs Supporting innovation

• AVANCE• Fiscal Incentives• New Fund for Science and Technology• Incentive Programs for Innovation• IDEA• IBEROEKA• FONCICYT• Bilateral Technological Cooperation with Spain, France• Sabbatical Stay in Industry• Innovation Networks• Innovation Stimulus Programme and Fund• Sectorial Funds (CONACYT-Ministries of State)• Regional Funds (CONACYT)

Source: CONACYT

Research

ResearchersResearchers 2,120

ProtocolsProtocols 650

Source: CANIFARMA

Clinical Research

• Around 12 companies engage in clinical research because it provides:– Local experience – Capability to meet with certain regulations.

• Around 10 pharmaceutical companies do research to acquire local experience in the clinical area.

• To a lesser degree, four or five companies do research after marketing their products, due to differences in the pharmacogenomic profile of the local population and because of differences in the medical practice.

• Small US presence

What next? Medical Tourism

• We have to demitify Medical Tourism• More research needed • Perhaps NADBANK can fund or help fund an

initiative between Guadalajara and San Antonio

Arguments to promote Medical Tourism to Mexico

• Most of the health care practitioners in Mexico have been trained in Mexico and other western countries.

• Mid-sized and larger cities in Mexico have at least one first-rate hospital and the cost of healthcare is generally lower than one might expect to pay in the US.

• A lot of North Americans travel to Mexico for dental work or minor surgeries (Medical Tourism)

• The same applies for prescription drugs. On average, prescription drugs that are manufactured in Mexico are about 50% cheaper compared to similar drugs manufactured in the United States.

What Next: Research opportunities in Mexico

• Pharmacologic applications of natural compounds

• Biotechnology and genomics• Improvement of known molecules• Support of global research• Technology research

The future• The writing is on the wall• Most of what could be accomplished through trade

has been done. Welcome to Diminishing Returns!• Very little cooperation has taken place, whether at

the academic level or the SME level. • Neither CONACYT or the National Science

Foundation have worked together to define a common R&D Agenda and the Partnership for Prosperity was a fluke

• Mexico City, Washington, D.C., Ottawa, move over! It is time for the locals, specially the cities– Knowledge about each other brings understanding.– Understanding brings agreements– Agreements bring actions– Actions bring results