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Risk-sharing as a path forward for Mexico
With a chronically underfunded public healthcare system, Mexico has lagged behind other members of the Organisation for Economic Co-operation and Development (OECD) in terms of uptake of innovative therapies. The country's 2018 budget reaffirmed an alarming trend of cuts in public health spending in Mexico, marking the third consecutive year of real terms reductions in this area. Although no specific amount has been set out for drug expenditure in the budget bill, overall public expenditure on health will amount to only 2.5% of GDP this year, compared to an average 5.5% among the OECD's 35 members.
At the same time, owing to its large and growing population and the increasing prevalence of lifestyle diseases, Mexico remains an attractive market for pharmaceuticals. Against this backdrop, innovative reimbursement solutions, such as risk-sharing agreements, are one possible way forward for both drugmakers and public healthcare institutions. And, as we learned recently, this interest is not just theoretical any more: as revealed by the director of the Mexican Association of Pharmaceutical Research Industries (AMIIF) in February, seemingly serious talks regarding a risk-sharing model were underway between the Mexican Institute of Social Security (IMSS) and the pharmaceutical industry in 2017. As reported by local news source Milenio, Cristóbal Thompson admitted that his organisation was in negotiations with the IMSS last year; however, talks were interrupted after the institute's former director, Mikel Arriola, resigned to pursue a political career and was replaced by Tuffic Miguel Ortega. Thompson's declarations appear to be the first confirmation by an involved party of what the influential newspaper El Economista had written about in June last year. According to the newspaper's report at the time, groups of experts had been tasked with working out the details of a possible outcomes-based risk-sharing scheme in March of 2017. According to its sources, the work focused on three areas: the selection of therapeutic areas that the new model could be applied to and analysis of associated epidemiological indicators, the definition of IMSS's outcome parameters relating to each of the areas and the respective populations, and the working out of necessary adjustments to existing IMSS regulations from a legal point of view. The therapeutic areas initially considered were - allegedly - diabetes and four (unspecified) types of cancer responsible for the greatest cost to the IMSS. As part of the discussions, the IMSS shared its epidemiologic indicators with the pharma industry for the first time ever, the report said.
Now, Thompson's declarations provide further proof that such negotiations were indeed underway. Although the AMIIF director did not reveal details, he did say that the sides had conducted "eight months of good meetings", suggesting that progress may have been significant. Furthermore, he confirmed that an outcomes-based risk-sharing model was being studied, in which IMSS would only remunerate manufacturers for the treatment of a patient with their innovative drug if it achieved certain pre-defined results. Examples of parameters that can be used in outcomes-based payment models include disease-free survival, symptom control, or sustained virologic response, to name just a few. Cristóbal Thompson further expressed hope that the talks could be resumed. It is not clear why they were stalled in the first place - perhaps the change of leadership in the IMSS proved a temporary distraction. By speaking publicly about the risk-sharing negotiations, the AMIIF director is possibly attempting to exert pressure on the IMSS's new leadership against squandering the progress that had been achieved under Arriola. Thompson makes it clear that to him, outcomes-based risk-sharing agreements between the government and the industry are the only way forward to improve Mexico's poor uptake of innovation.
Perhaps, as I am writing this, the sides are already back at the negotiating table; we will certainly continue to monitor this interesting situation as it progresses. In markets such as Mexico, where securing reimbursement is difficult, fragmented and slow, risk-sharing could be a game-changer in terms of access to high-cost medicines, if only for some types of drugs. However - crucially - even outcomes-based reimbursement requires preparedness for potentially significant levels of investment. It will not replace adequate funding. Considering the stagnant levels of public expenditure on health in Mexico, innovative reimbursement models can bring an improvement, but will not cause a revolution.
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