Once overlooked pharma hub in Mexico’s Hidalgo region has gained importance with global market support and foreign investments. 2020 marked the expansion of pharmaceutical market in the Hidalgo region of Mexico with the collaboration and investment of India’s top pharmaceutical companies. This collaboration initiated tremendous growth in pharmaceutical production and distribution in Hidalgo, Mexico. T
his article highlights the supply chain developments, with the conditions that favored it in Mexico.
Geographical Advantages for Pharma Manufacturing In Hidalgo
Some of the prominent geographical conditions of Mexico that have enhanced the pharma supply are as follows:
- Mexico holds a large land area of two million square kilometers covering deserts in the north, rainforests in the south and east regions, and mountains in the center.
- Mexico has an extensive coastline which includes the largest coastline of Mexico which is the Pacific Ocean towards the west, the Gulf of Mexico towards the east coast, and the Caribbean Sea towards the southeast coast.
- The major advantage of the US being the northern neighbor of Mexico aids in strengthening the pharmaceutical trade opportunities.
This vast land area serves as a good scope for the development of pharmaceutical manufacturing and distribution units whereas the surrounding oceans serve as an advantage for the port development for import and export of pharmaceuticals.
Overview Of Indian Pharmaceutical Collaboration With Mexico:
- In 2020, India’s six top pharmaceutical companies Dr Reddy’s Laboratories, Cadila Pharmaceuticals, Glenmark Pharmaceuticals, Torrent Pharmaceuticals, Hetero Drugs, and Ackerman Pharma signed a memorandum with the State of Hildago in Mexico that aimed for the expansion of their manufacturing and logistics units of these top companies in the Hildago region of Mexico.
- Sun Pharma strengthened its position in the Mexican market by expanding 25% of its remaining stakes, making Sun Pharma de Mexico SA de CV, its separate entity in October 2023.
- October 10, 2022, marked the announcement of the partnership between the Indian pharmaceutical Cipla and Mexican pharma company Birmex for the supply of oncological and retroviral drugs. This collaboration also included technology transfer to Birmex to improve the availability of medicines in Mexico.
- Indian pharmaceutical exports grew by 67.6%, developing an increased revenue from $55 million to $92 million.
- Mexico City accounts for the largest number of pharma manufacturing facilities with half of the facilities approved by the EU or the FDA. These facilities include API manufacturing units, injectable and packaging units.
Nearshoring & CMOs Boosts Mexico Pharma:
The Mexican pharmaceutical market is flourishing with the support of the nearshoring of US companies and the foreign establishment of Contract Manufacturing Organizations (CMOs) by foreign companies. To avoid global supply chain issues after the COVID-19 pandemic, the US manufacturing units shifted closer to Mexican boundaries.
The US established its three-pharma headquarters in Mexico. Many pharmaceuticals in Europe and Canada have developed their manufacturing sites in Mexico. This shows the potential of Mexico for growth in the pharmaceutical sector, attracting more foreign investors to collaborate with CMOs in Mexico.
Challenges And Opportunities:
Some factors such as unexpected supply chain disruption, costing pressure, regulatory hurdles, etc. However, these challenges are overcome by the wide range of opportunities the Mexican market has such as nearshoring benefits, foreign companies’ CMOs, partnerships with global pharma brands, an aging population increasing the demand for pharmaceutical products, etc.
Future Impact:
The Mexican pharmaceutical market is expected to become the major pharmaceutical global hub for the pharmaceuticals. This will lead to more employment and overall economic growth in Mexico. The pharmaceutical collaborations with the Indian investors will most likely lead to innovations in Mexican pharma production making Mexico, the leading global supplier across the Latin American market.
