Pharmaceutical Overview

1. Pharmaceutical Overview

2. Pharmaceutical Overview (1) • Pharmaceuticals partially covered through various health insurance schemes • Public insurance provision dominated by generics • Traditionally, three main classes of medicines in the market: • Innovative (patented); • “Interchangeable generics” (approved and registered by MoH based on bioequivalence tests); and • “Similar generics” or similares (generics approved and registered without bioequivalence tests) • Public insurance provision of similaresphased out 2005-present

3. Pharmaceutical Overview (2) • High volume of medicines sold through private pharmacies due to insufficient public health insurance coverage of pharmaceuticals • Private financing of medicines far outweighs public financing: 80% vs. 20% • Majority of private spending on medicines is OOP (over 95%) • Still, overall, lowest consumption of pharmaceutical products per capita in OECD

4. Snapshot of Pharmaceutical Spending • Pharmaceutical spending as % TEH 2nd highest in OECD (27.1% in 2009) • Per capita spending 2nd lowest in OECD (2009) • Medium growth in per capita pharmaceutical spending in 2000s, from very low rates at beginning of decade • Between 1999-2009 per capita spending almost tripled from USD 87.3 to USD 249.9 (PPP) • Incremental growth expected: pharmaceutical sales projected to rise from US$13 billion (MXN161 billion) in 2011 to US$18 billion in 2015

5. Total Expenditure on Pharmaceuticals and Other Medical Non-durables, % TEH, Mexico, 1999-2009 Source: OECD Stat (2012)

6. Total Expenditure on Pharmaceuticals, % of TEH, 1999-2009, Mexico and Select OECD Countries Source: OECD Stat (2012)

7. Total Per Capita Spending, Pharmaceuticals and Other Medical Non-durables, US$ PPP, Mexico, 1999-2009 Source: OECD Stat (2012)

8. Total Per Capita Spending, Pharmaceuticals and Other Medical non-durables, US$ PPP, 2010 or Closest Year, OECD Source: OECD Stat (2012)