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EF: How do you see 2023; as a challenge or an opportunity?
II: This year presents great opportunities for companies. Those that can adapt to political and regulatory changes, market issues like raw material supply and price increases, and labour policies in Mexico will be able to turn these challenges into opportunities.
EF: Could you elaborate on your footprint and portfolio and how it has adapted to the needs of Mexico?
II: Our company has a portfolio of 50 branded generic products. We have a widespread presence in Mexico, visiting 18,000 doctors across the country and servicing 700 hospitals, both private and public. Our target audience comprises doctors catering to the middle and lower middle classes. As a policy, we do not disclose our sales to any auditing company, including IQVIA, as we prefer to maintain a discrete approach. We sell our products directly to pharmacy chains and distributors serving the market and hospital segments.
EF: Considering Mavi’s status as a manufacturing powerhouse, what are the advantages of having a local production footprint in Mexico, and how can it be improved?
II: There are numerous opportunities for pharmaceutical manufacturing in Mexico, despite the slow and often inefficient regulatory authority. Setting up manufacturing plants in Mexico remains a lucrative business due to the low indirect costs associated with production, including labour, workforce, and transportation, despite security concerns on the highways.
Land costs are affordable, and construction expenses are comparable to other regions worldwide, particularly in Latin America. Additionally, the proximity to the United States offers a significant advantage, particularly for nearshoring.
When I discuss with my colleagues from other laboratories, I encourage them to explore private labelling in the United States. It is a profitable business; private labelling does not bring you sales for your branded product because you are manufacturing for the United States. That is my perspective on the matter.
EF: How would you characterize access distribution in Mexico? Furthermore, in what ways does Mavi contribute to improving access to healthcare products in the country?
II: That is indeed an important topic in the retail business. We see access as the opportunity for a company to make it easy for our product to be consumed by almost 130 million inhabitants in Mexico. What you have to do is design a model, create it, and execute it well, where you know that your product will reach over 30,000 points of sale throughout the country every week consistently, and your product is present there.
And to do that, you have to work with national distributors, local distributors, and regional distributors, and then you have to work with specific distributors who serve or supply the hospital market in Mexico, including small private hospitals, medium private hospitals, large private hospitals, and decentralized government health clinics with state autonomy. What we have done is expand opportunities with different logistics companies, not just working with one, but several. This way not only does your product arrive, but we also use air and land transportation.
EF: Considering the challenges posed by the current circumstances, how do you manage to coordinate this extensive network of suppliers effectively? Furthermore, how do you leverage collaborative spaces to drive progress in the market?
II: Establishing working agreements and adapting to the specific needs and working methods of our clients is crucial. We believe in a collaborative approach where both parties contribute their expertise and strengths. For example, it is crucial to know how to adapt to a major hospital group here in Mexico, such as Star Médica or Grupo Ángeles. Both have unique requirements and operational styles. Similarly, specialized pharmacies like San Pablo, Farmacia del Ahorro, Farmacias Similares, and Farmacias Guadalajara all have their distinct essence and way of functioning. To effectively adapt to their diverse needs, we employ our versatility and dynamic nature as a company.
At Mavi, we have five directors who efficiently manage operations with abundant information readily available. Additionally, we are actively engaged in the business as individuals. Therefore, we can make prompt decisions based on reliable and timely information.
EF: After such a long time in the market, if you had to give a speech to all your employees to celebrate 70 years, what would you include as part of it?
II: It is crucial to emphasize that the journey, with its many changes, challenges, and triumphs, has led us to success. This achievement is the result of collective efforts. We have accomplished this together as a team. We do not raise individual flags here and claim victory; it is the combined effort and talent of all of us that has propelled us forward. It all began 24 years ago when we ventured into the private market from scratch. Since then, we have reached a significant position among laboratories in Mexico. Recognizing the contributions of our people is vital. When we acknowledge their efforts, it motivates and fosters a strong commitment to our company. We prioritize fairness and maintain direct communication channels within our organization. Our commitment to providing excellent working conditions has earned us certification as a Great Place to Work.
This extends beyond economic and benefits considerations to encompass comfortable workspaces, safety, and equity. Therefore, in my recent speech, I emphasized that our achievements are the collective result of each individual's effort and commitment.
EF: How do you attract and retain the very best talent in such a competitive market?
II: This might not be well received by companies that serve as suppliers of highly talented individuals. However, my brother and I are continually searching for exceptionally qualified executives who bring with them the expertise and work culture from globally renowned companies. These are the companies that have developed highly successful models for cultivating and nurturing talented executives at all levels. Within Mexico, we always consider our needs and make decisions accordingly, even if it does not please others.
EF: If you had to create your own new startup company in the Mexican healthcare sector, what would you create? What does Mexico need?
II: Mexico requires an increase in high-quality manufacturing that adheres to national standards aligned with international norms and clearly defined its target segments; especially in the injectables pharma segment. Currently, I have a strong understanding of the segments required in Mexico, the United States, Central America, and South America. In South America, there is fierce competition from powerful laboratories. However, Central America and the United States, particularly the latter being a superpower, have significant medication supply needs. Therefore, if a Mexican company possesses a well-established production facility with robust documentation and quality systems and obtains certification for the United States and Canada, it is a no-brainer. This would be a tremendous opportunity, often referred to as a homerun. Thus, there are vast business prospects for those establishing themselves in Mexico.
EF: Mavi's success can be attributed to their astute identification of opportunities and strategic focus on compatible market segments, avoiding ventures that do not align with their core objectives. Their ability to maintain this clarity and consistency over 70 years is commendable.
II: Thank you very much. We have had some setbacks along the way, but there have been many more victories than setbacks. There have been instances when we ventured into markets that were not our speciality. However, we solved the issue and sold high-speciality products to other laboratories that excel in those areas. If you lack the humility to recognize that you are wasting your time and money, you continue on a futile path.
EF: As a Mexican pharmaceutical company expanding into Latin America, we value the unique viewpoint that sets you apart from foreign companies with manufacturing operations in Mexico. Are there any crucial perspectives or topics that we may have overlooked and should include in our story?
II: Local companies in any country require the support of their internal regulatory authorities. Without the backing of organizations in the US or EMA in Europe, it becomes extremely challenging for companies to make progress. Similarly, in Mexico, both domestic businesses and those entering the market need the support of our regulatory agencies.
Without it, the journey becomes difficult, although not impossible. It becomes an arduous and lengthy process. I would like to emphasize that while external factors such as crime, international supply issues, and price increases may pose challenges, what we truly need is regulatory and normative support that benefits the industry as a whole rather than serving the interests of regulatory executives.