US, Indian Companies Focus on Mexico Generics Sector

The market share of generic medicines in Mexico is currently small, at some 10%. However, despite the fact that the sector is only worth some $100mn per year, strong growth rates in generics sales have prompted a number of foreign-based companies to make strategic acquisitions and partnerships in the country.

The recent entry of Indian firms Wockhardt and Strides Arcolab has been widely reported, with leading producer Ranbaxy also establishing a majority-owned joint venture with a local firm. However, it now seems that US investors are beginning to take a direct interest in the sector. US investment fund Darby Overseas recently acquired a 53.3% stake in Laboratorios Kendrick, which claims to be the country's second largest independent generic drugmaker.

With the tide of regulatory change moving firmly against illicit copy products, the market share of generics is likely to increase steadily in the next few years, albeit from a very low base. The local generics manufacturing sector, which includes about 30 companies, may also benefit from official encouragement. Notably, Mexico's government health agencies have been slower than authorities in many other Latin American markets to promote generic alternatives.