In an increasingly globalized world, emerging markets have become the economies to watch since their economic growth and industrialization is expected rapidly increase in the upcoming years. Mexico along with countries like Brazil, Russia, China, and Turkey, is among the top emerging markets whose pharmaceutical industry is rapidly doubling its value. However, Mexico is not the number one emerging market for the pharmaceutical industry, so it is important to understand what factors drive its development and compare its strategies to those of countries like Brazil, Russia, China, and Turkey in order to understand what Mexico needs to become the top choice for pharmaceutical investment.
One of the most important factors to consider is the government expenditure in the health care system since this is a good measure of projected industry growth and of how important this industry is to the country's authorities. The value of the pharmaceutical industry of each market together with the percent of health expenditure as a share of GDP translates into one of the key features that can attract investment to that country. Turkey's pharma is worth about 10 Bn USD and spends about 2% of its total GDP in healthcare, while Brazil's is worth 26 Bn with 3.2% expenditure, Russia's is 15 Bn and 4% respectively China's is 50 Bn and spends 6.5%, and Mexico's pharma market has a value of about 14 Bn spending approximately 6.1% of its total GDP on healthcare (focusreports.net). With Mexico only above Russia and Turkey, there is much room for improvement.
In terms of health care reforms and growth strategies, all of these countries have taken an active role in providing their citizens with affordable health care thus driving the growth of the pharmaceutical industry. In Mexico, the universal health care system Seguro Popular covers about 38% of the Mexican population while IMSS covers about half of the healthcare needs of Mexicans. Similar initiatives have been put in place in Brazil (Farmacia Popular), China, and Turkey (SGK), where an additional practitioner program makes sure that every person has access to a local doctor near them. These healthcare reforms along with investment in R&D projects make these emerging markets increasingly attractive to pharma developers. For example, China invests about 1.9 Bn a year in R&D and innovation projects, Russia has set a strategy to double the increase of manufacturing and R&D by 2020, and Turkey is aiming to increase their numbers to 1.7 Bn by 2023. Additionally, Brazil has grown its pharmaceutical industry by promoting partnerships between international and local companies. In 2012 alone, MNC's and locals made about 10 acquisitions(focusreports.net).
Over all, emerging markets not only have the resources for economic growth, but have established strategies to attract investment go their pharmaceutical industries because they recognize that the social movement in their countries has lead to an increase in the demand for services such as health necessities. Although Mexico has succeeded in opening up its market to investors mainly through the work of agencies like COFEPRIS that regulate drug permits, it seems like Mexico would be better positioned to become the number one emerging market if there were more fiscal incentives for the industry and more investment in R&D, technology and innovation projects. Mexico has the resources and is on the right track to capitalize on its rapidly growing economy but if investment in the pharma sector is to be increased, both industry leaders and government must make sure that the right regulations and laws are put in place to drive this development.
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