PROBIOMED is a Mexican company focused on research, development, manufacturing, and marketing of pharmaceuticals and biotechnology products for human health. PROBIOMED is working with COFEPRIS to meet the new regulation established which is in effect since 2015. This will not only allow PROBIOMED to grow their exports exponentially, but it will also enable PROBIOMED to address a lag in supply of high quality and low-cost drugs within a changing Mexican market.
KITE Invest sat down with Sandra Sánchez y Oldenhage, Deputy CEO of PROBIOMED, to get a glimpse into the great potential of Mexico’s biotech and biosimilar industry.
KITE Invest: Please tell us about the history and evolution of PROBIOMED and what milestones stand out as marking a before and after in the business corporation PROBIOMED.
Sandra Sánchez y Oldenhage: PROBIOMED is a company that in 45 years has been reinvented several times for different reasons: starting with the business vision of our founder –Eng. Jaime Uribe de la Mora–, to the dynamics of the market itself, which required us to explore new horizons. The company began by selling APIs (Active pharmaceutical ingredients), and then in 1985, in order to vertically integrate ourselves, we began to manufacture and market generic versions of synthesized chemicals. We have exported since 1977 and today we are operating in 14 countries on 4 continents. As medicine and research began moving towards biotech drugs, which are used much more in chronic degenerative diseases, which are more prevalent today than infectious or transmissible in nature, PROBIOMED decided to make proteins identical to those produced by the human body using recombinant DNA engineering, thus venturing in the development and manufacturing of biosimilars (approved in that time as generics, as no specific regulation was in effect for biotech products).
Today we have been marketing biotechnology products for more than 18 years, and have been pioneers within this growing field. Key to mention is the fact that we are the only company in Mexico that produces from gene to finished medicine, to which innovation has played a critical role within our development. Chemically synthesized drugs are relatively easy to manufacture and develop; however, in the case of biosimilars, the development and manufacturing process is much more complex, since it is created from living cells. Today we have 16 registered biotech drugs and several in development, which is the largest portfolio of any company in Mexico. Our history, solid experience, know-how, and a first-class team (in development, manufacturing, regulatory approval and commercialization), all together make us a leader within the market.
At PROBIOMED we believe that quality should be based on knowledge and science, which is why, since our founding, we have invested all of our profits into growth and research; on average, we invest more than 20% of our profit from sales into pharmaceutical research.
In 1999, PROBIOMED was granted the first National Award for Technology and Innovation presented by President Ernesto Zedillo, thanks to our developments in biotechnology and for being the company with the highest manufacturing value added (as much for our processes, as for our medicines) in the country. Currently we have four manufacturing plants, one of which is dedicated entirely to biotechnology and meets global standards in equipment and infrastructure. With our rapid international expansion, we plan to build another plant in response to the needs of production capacity.
Our mission is to provide high technology medicines to the world in order to improve human health and patients’ quality of life. We focus on serious chronic degenerative diseases that have a high social impact and economic burden; therefore, our value proposition is to offer high-quality biosimilars at a lower cost, increasing access and treatment reach. We have delivered more than 80 million doses to more than 20 million patients with different grievous illnesses such as cancer, rheumatoid arthritis, chronic renal failure, diabetes, and multiple sclerosis.
PROBIOMED is a healthcare ally in Mexico and the world as we help patients and health institutions to make significant savings by offering them high-quality medicines at a low cost. This results in an increased number of patients who receive treatment and have access to our medicines. By having a fully integrated model, PROBIOMED can ensure both – high quality and low cost. This gives us a competitive edge with a strong value proposition.
Today, PROBIOMED is a benchmark for biotechnology; our history, our knowledge, and our experience in the field speak for themselves. Through its research, development and manufacturing of biosimilars, PROBIOMED is able to address many challenges for both health institutions and patients – high cost treatments for serious diseases, access to these types of drugs and reach more patients – that today have become a burden for many countries.
Since December 2014 there has been a new regulation for biotech and biosimilar drugs (NOM 257). This new regulation came into effect on February of 2015. Prior to this, biosimilars were approved by COFEPRIS with the previous regulation as “generics.” Today these marketing approvals will have to be renewed in compliance with the new regulation. Currently, PROBIOMED is working closely with COFEPRIS in order to comply 100% with this new regulation.
Biotechnology is becoming increasingly important in health systems and if there are no options for biosimilars to coexist with biotechnological innovation, then health institutions budgets, as well as patients out-of-pocket, will be severely affected. The reason for this growth is primarily epidemiological and demographic. We are moving from infectious to chronic degenerative diseases as the population is living longer and with more comorbid diseases. This situation challenges the health care sector and the social security institutions, due to increased pensioners, fewer taxpayers, more patients, more illnesses per patient, more chronic diseases requiring long-term treatment, hard-pressed budgets, etc. Moreover, the best treatments for many of these diseases are biotechnology in nature, which in turn increases the cost of treatment for each of these diseases.
To give a clear example, there are now 75,000 patients on dialysis for chronic renal failure (CRF) in Mexico. However, there are more than 6 million people living with diabetes, which is the leading cause of CRF. Not to mention that Mexico is the leading country in child obesity and the second in adults, of which several will develop diabetes. The dimension of the true impact of demographic and epidemiological change is just starting to be seen. Biosimilars represent an alternative to the growing demand for biotechnology products. Once an innovative patent is lost, biosimilars are a safe and effective option, because they allow institutions to save and be able to invest in innovation. Hence, I firmly believe that innovators as much as biosimilars should coexist in this virtuous circle.
The growth of biotechnology, and therefore biosimilars, will continue in a sharp acceleration. Today we see that 7 out of 10 NDA (New Drug Applications) submissions to the FDA are biotech drugs. In COFEPRIS at the end of 2014 it was 3.4 out of 10, and it continues to grow. Of the top ten selling drugs worldwide in 2008, 34% were biotech, today they are almost 80%. Between 2015 and 2020, 24 biotech product patents will expire, representing aggregate sales of almost USD $90 billion reported in 2013. Moreover that same year, 1,000 biotechnology molecules were in development worldwide.
Within the Organization for Economic Cooperation and Development (OECD), Mexico is the second country with the highest spending on drugs as a percentage of total health expenditure (28.3%), well above the OECD average (17.2%). Mexico also spends the most, as a percentage, of its total health expenditure (47.8%), whereas the OECD average is 19.5%. As a country we need to do something to address this; PROBIOMED’s intent is to help reduce this percentage.
I insist – this is why we have the biotechnology “boom”. While the pharmaceutical industry in Mexico has grown 6% annually, biotech has grown at an estimated 25%. Today, Mexico’s pharmaceutical industry is the country’s fourth largest manufacturing industry, accounting for 7.2% of the manufacturing GDP; however, biotechnology is not a significant part of this. Here and in itself is a great opportunity to encourage the sector. There are three factors, out of ten, that qualify a country for a higher rate of competitiveness: (1) an inclusive, prepared and healthy society ;( 2) sophistication and innovation in the economic sectors; (3) investing in world-class precursor sectors. Biotechnology encompasses all three of these qualifications and that is something the government could encourage with greater support (as it has with many other industries). This is especially important in light of the health challenges we face today, which will only get worse if we do nothing. With the appropriate support from the government, biotechnology in Mexico can be an engine for growth and for the country’s export sector.
KITE: PROBIOMED holds 16 of the 64 registered biosimilars granted in Mexico since 1993. It is estimated that the company has generated huge dollars in savings for health institutions by offering lower prices of more than 75%. Could you tell us the level of significance these savings have played for the Government of Mexico and the health institutions?
SSO: The savings obtained through the biosimilars, which were adopted with the previous regulation as generics, have been very significant. Hence it is why COFEPRIS decided to develop a world-class regulation for biotechnology / biosimilars becoming a benchmark in the region and I would dare say at the level of the European one. This regulation is already in effect as of February of this year, and 64 registrations granted through the previous regulation must renew their registration at the time they expire. In Mexico, registrations are renewed every five years. So from today and in the following years, there will be renovations of biotech registrations that must comply with these new requirements. COFEPRIS has established a very clear path for renewals (products that have already been on the market for many years) and for new products. The savings with biosimilars is such that it will have a positive impact for health institutions not only in Mexico, but worldwide. As a result, COFEPRIS is interested in ensuring that all renewals and new drugs comply with this new regulation, demonstrating safety, efficacy, and quality.
The benefits of biosimilars are irrefutable; they represent a great opportunity for health institutions in Mexico to treat more patients at a lower cost:
- Benefits to health sector: savings in drug spending and more patients receiving treatment.
- Patient benefits: more choices and access to medicines at a lower price.
PROBIOMED works closely with the regulatory agency to comply with every requirement the regulation has established, in order to continue offering high quality medicines at low cost, which in turn will be a great challenge to the majority of the players. Some countries like China and India will offer the low price; but now they must demonstrate their quality against these new requirements. On the other side, there will be companies that demonstrate high quality, but will have a big challenge to provide a low cost. Faced with this new dynamic, PROBIOMED- thanks to the way it is integrated– is positioned in a very positive manner to continue to grow rapidly, not only in Mexico, but also internationally.
Exports become a huge opportunity too. In Mexico there is a large deficit in our trade balance – we import more than we export, and I think that is something that is hurting the country a lot. In this regard it is important that there is industrial development by the government to promote investment in sectors that make a significant difference in offsetting this imbalance, such as biotechnology.
KITE: Regarding the company’s vertical integration in the value chain, could you tell us what PROBIOMED’s competitive advantage is?
SSO: We own an R&D Unit led by an interdisciplinary team of specialized professionals dedicated to design and develop biotechnology products and processes. We always use state-of-the-art technology to offer high-quality solutions for global health needs. We are the only biopharmaceutical company in Mexico that develops products from the gene to the finished medicine –including hormones, cytokines, monoclonal antibodies, fusion proteins and vaccines– to treat chronic-degenerative diseases, malignant tumors, blood and metabolic disorders and autoimmune diseases. We control the entire process from start to finish. We make sure that in each of the steps there is a process of continuous innovation. Moreover, we continually improve our processes to ensure a higher quality at a lower cost. This process of reinvention and engineering is part of what makes us different from our competitors.
Today we invest the same or more than the innovator companies. We are committed to investing at least 20% of our sales into R & D.
KITE: Could you tell us which countries are in the spotlight for PROBIOMED to distribute its products to? And what impact will this have in the growth of the company?
SSO: As I mentioned, today we have one of the best and strictest regulations on biotechnology and biosimilars worldwide. As of today Mexico is a clear leader in the Latin American region. But beyond regulations, COFEPRIS has also been recognized as a regulatory reference agency in the region, obtaining certification from the Pan American Health Organization (PAHO) for pharmaceuticals and biotechnology, in addition to the World Health Organization’s (WHO) certification in vaccines. With these certifications, Mexico becomes a leader in regulatory matters in Latin America. Furthermore, COFEPRIS has been working with several countries in the region to obtain one-way recognition of approved registrations in Mexico by other agencies. While progress has been made in the field of pharmaceuticals in some countries, the issue of biotechnology still needs to be addressed.
However, this initiative heralds a promising future as it opens the door to several markets in the region at an expeditious time versus the average approval time in many countries. For us, the natural market to expand to is Latin America. We are now in 14 countries on 4 continents, and our vision is to become the biopharmaceutical company of Mexico for the world. We want to position ourselves first in emerging markets, because those are the countries that need our medicines the most. Emerging markets have the most patients that are the most seriously affected and have the lowest budgets. Supporting our mission to always keep the patient at the center of our decisions, emerging countries are the choice when it comes to expansion. The United States and Europe have relatively good or better health systems, greater coverage, and medicines that are affordable. Other countries, however, are not in that situation. Russia, Turkey, Ukraine, India, and Algeria, are just some examples of countries that require the type of medication that PROBIOMED is offering. Our mission will always be to support the patient, improving their quality of life by offering high quality medicines at low cost. This is the first step, and then our vision will be transferable to developed countries.
KITE: You personally were ranked as the 40th most powerful woman in Mexico according to Forbes and 27th in CNN Expansión’s ranking. What does leadership mean to you and what final message would you want to provide the British audience about Mexico and PROBIOMED?
SSO: “Leadership is about people, not about you.” You cannot achieve anything without people, nor be a leader unless you have followers. It is very important to know that leadership comes from the people. Never forget to always look back and make sure you’re bringing your followers with you.
- You cannot ignore the effect you have on your team. Everything you do has an effect and you must be very aware of it. You should never forget that you’re dealing with people, so there must always be that human element. I have learned this over time and the hard way, but I’ve always learned from those mistakes. Today I manage my team with something I call “tough empathy”, I am tough minded on standards, but tender hearted with people.
- Yes, you have to be relentless about targets but focusing on people NOT on metrics – have them feel the full weight of delivering the results.
Therefore, you must delegate the tasks, but never the relationships. You must share power – Yes, hold the flag, but know when you should let others in your team hold the flag and lead, you’ll then be in the back for their encouragement You may find yourself in a top position without these qualities, but few people will want to be led by you. If you see, these 5 essential qualities I believe a leader should embody, are not about results per se, they are more about excelling at inspiring people – in capturing hearts, minds and souls. However, with these traits, you will definitely build a high performing team which in turn will lead to great financial returns. But, you can only win through your teams. That, to me, is inspiration.