The legal framework regulating pharmaceuticals and medical devices is largely federal in Mexico, and includes the following laws and regulations:

• the General Health Law (GHL);
• the Health Supplies Secondary Regulations (HSR);
• the Health Services Secondary Regulations;
• the Health Advertisement Secondary Regulations;
• the Clinical Research Secondary Regulations (CRSR); and
• several official Mexican standards on specific technical aspects (eg, good manufacturing practices, labelling and stability).

In Mexico, the legal and administrative nature of the Federal Commission for the Protection against Sanitary Risks (COFEPRIS) is that of an autonomous agency, under the administrative structure of the Ministry of Health (MoH). The GHL created and provided COFEPRIS with administrative, technical and operational autonomies. However, that autonomy was placed under pressure after a ministerial decree was issued in 2020, changing its ascription, from the Minister directly, to a Vice-Minister. For a federal administration that took office in 2018 with a promise to eliminate COFEPRIS as an independent body and absorb it in the MoH, this ministerial decree has been regarded as a step towards integrating it to the centralised administration. If completed, it would lose decades of autonomy and technical specialisation, making it prone to political decisions.

Decisions from the regulatory bodies that apply and enforce pharmaceutical and medical device regulations may be challenged through the following optional appeal proceedings:

• an initial administrative review, decided by the same authority that issued the original administrative decision;
• an annulment trial, decided by the Federal Administrative Tribunal; and
• an amparo trial, decided by a judicial body, a judge or a court, depending on the nature of the decision being challenged.

The formal requirements for challenging a decision vary depending on the nature of the decision being challenged, but generally the appeal lawsuit shall include:

• identification of the affected party;
• identification of the challenged decision;
• identification of the authority that issued the decision;
• a description of the facts; and
• the available evidence.

However, the most important element for successfully litigating regulatory decisions is to have an interdisciplinary team of lawyers and pharmaceutical chemists, so that the science and the law can be properly understood and argued in each case.

Strangely, there is still a general impression within companies that there has been no significant litigation relating to decisions taken by health regulators. However, this is not an entirely accurate perception, as litigation has always existed in this area, particularly in relation to sanctions. As the regulatory system has evolved into a more complete set of legal rules and as regulatory work is now being undertaken not only by pharmaceutical chemists but also by lawyers, companies have understood better their rights and have felt increasingly confident to challenge regulatory decisions that affect their interests.

For a whole decade, since the creation of COFEPRIS in 2000, regulatory work was highly technical, mainly handled by pharmaceutical chemists, both in companies and in regulatory agencies. The health law and regulation did not evolve as quickly as the science and the market did. The government's regulatory decisions were frequently taken based not on existing legal rules but exclusively upon technical criteria, which led to a highly discretionary system. Although decisions were always legally vulnerable, the concern of companies was that legally challenging a decision over one product would affect other decisions pending over other products. At the same time, public affairs actions were rather successful in achieving results without the need to litigate.

Then came two administrations (2010–18) that brought the legal framework up to date, brought in lawyers in key positions and modernised the administrative system. This helped trigger a trend where in-house lawyers and external counsel began to specialise in the field. At the same time, compliance controls tightened, forcing companies on the one hand to evaluate, enforce and defend their rights and obligations, while on the other hand putting pressure on the area of public affairs.

Finally, the actions of the last two administrations (2018–20 and 2020–22), which deliberately isolated from the industry, replaced experienced examiners and reduced the number of available examiners, leading to a huge backlog that disrupted operations and creating strong incentives for companies to litigate.

All of that combined has resulted in a significant increase in litigation, of all kinds of decisions, year after year, for the past decade. This led to the creation of a Specialised Chamber for Regulatory Matters, within the Federal Administrative Tribunal, which hears 300 cases a year against COFEPRIS. Now there is significant litigation against a lack of response on renewals, modifications, rejections and inspection procedures, in addition to litigating sanction decisions.

The administrative review, annulment action and amparo trial would also be the applicable appeal proceedings to challenge the decisions of COFEPRIS that involve other regulated products, such as foods, beverages and dietary supplements.

There are two basic categories of pharmaceuticals: prescribed and non-prescribed drugs. In addition, controlled substances require a special prescription.

Medical devices are divided into three classes, according to the risk they represent to human health:

• Class I – those that are recognised in the medical practice, whose safety and efficacy has been proved, and that generally are not introduced in the human body;
• Class II – those that are recognised in the medical practice, that can vary in the way they are manufactured or in their concentration, and that regularly are introduced to the human body, remaining there for less than 30 days; and
• Class III – new products or those recently accepted by the medical practice, or those that are introduced in the human body and remain there for more than 30 days.

The regulation of clinical trials includes the following key instruments:

• the GHL;
• the CRSR;
• Technical Standard NOM-012-2012-SSA3;
• the Guidelines for Good Clinical Practice published by COFEPRIS; and
• the Decree for the Operation of Ethics Committees, co-ordinated by the National Bioethics Commission.

In general, clinical trials (Phases I–IV) shall be:

• preceded and supported by pre-clinical data;
• conducted in accordance with scientific and ethical principles;
• performed with the informed consent of the participating human subjects;
• executed under a research protocol;
• overseen by a principal investigator; and
• performed in licensed health institutions.

In addition, they must obtain the relevant approvals of a Health Institution, an Ethics Committee and COFEPRIS.

Historically, the operation of Ethics Committees was largely self-regulated and based on international best practice. There was also a lack of co-ordination between COFEPRIS and the National Bioethics Commission (ConBioetica). However, the Decree for the Operation of Ethics Committees (2012) provides a clearer legal framework, establishing their structure, their objectives, the role of their members and the requirement to be registered before ConBioetica and COFEPRIS.

Notably, the Guidelines for Good Clinical Practice (2012) make a clear reference to international best practice, including standards developed by the International Conference on Harmonisation. These good clinical practices will be the basis to move towards a certification system, for which COFEPRIS has already started to conduct inspections of research sites.

The operation of contract research organisations (CROs) is not fully regulated, with references only found in the Guidelines, but there are ongoing initiatives to address this.

In addition, other regulatory measures have been introduced to promote Mexico as a place for conducting clinical research, including the following.

• An important amendment to the Health Supplies Secondary Regulations (RIS) – Article 170 of the RIS originally required a certificate of free sale of the country of origin to be submitted as part of an application for obtaining a marketing authorisation (MA) of a drug produced abroad, which therefore made it impossible to have Mexico as the first country of registration. In 2012, however, this was changed to make it possible to submit a clinical trial report instead, provided that the Mexican population was included in the trial.
• The creation of third authorised parties for clinical research – COFEPRIS has authorised several public hospitals with extensive experience on clinical research to conduct a pre-evaluation of research protocols. If their report is positive, approval times at COFEPRIS are reduced significantly.

The same rules regulate medical devices and pharmaceuticals.

The procedure for securing authorisation to undertake a clinical trial of a pharmaceutical or medical device is comprised of three basic steps, which are sequential and cannot be applied for in parallel:

• favourable opinion of the research protocol by the Ethics Committee of the Health Institution where the trial is to be conducted, which, according to the Decree for the Operation of Ethics Committees, must take place within 30 business days of filing;
• authorisation of the research protocol from the Director of the Health Institution where the trial is to be conducted, which must take place under its relevant internal rules; and
• approval of the research protocol from COFEPRIS, which, according to the Federal Law on Administrative Proceedings, must take place within three months of filing.

Currently, after their protocols have been authorised by COFEPRIS, most trials are recorded in the National Registry of Clinical Trials (RNEC). The information contained in the RNEC is collected by COFEPRIS in collaboration with those responsible for conducting the clinical trial (sponsor, CRO or healthcare institution). The RNEC publishes an electronic database that includes only general information about the clinical trials. Although limited, this shows significant progress, as until very recently there was almost no local information made publicly available. Confidential information is not included in the RNEC, nor is the health information of patients, which will be regarded as sensitive personal information under data protection laws and will be protected accordingly.

On the other hand, there is no binding provision to disclose or publish the results of clinical trials, but the Code of Ethics of CETIFARMA (the Council of Ethics and Transparency of the Pharmaceutical Industry) does contain a specific obligation for sponsors to disseminate the positive and negative results of trials, particularly the adverse events.

There are no specific restrictions regarding online clinical trial platforms. However, it would be important for the platform to comply with the regulations regarding recruiting and interaction with patients enrolled in a clinical trial if those functionalities are included in the platform. Additionally, this platform could involve other regulatory implications, such as the advertising of health inputs, services and privacy protection, so it is important that its content is reviewed on a case-by-case basis.

The resulting data from the clinical trial would be considered as personal if the patients enrolled in the clinical study were identified. If the results of the clinical trial are presented without providing information or images that could lead to the identification of the patients, those results would not be considered as personal data.

It is permitted to transfer the resulting data of the clinical trial to a third party or to an affiliate, as long as the privacy notice reveals that a transfer will occur and identifies a justifiable purpose for that transfer. When sensitive personal data is involved, the data controller must obtain the express written consent for processing, through their signature, an electronic signature, or any authentication mechanism established for that purpose.

The creation of databases that contain sensitive personal data must be justified and follow legitimate and concrete purposes that correspond to the activities and explicit objectives of the data controller. These kinds of databases are not subject to authorisation before starting operations.

The GHL provides a general definition for pharmaceuticals. In this respect, any product that falls into such definition should be considered as a pharmaceutical. According to the GHL, a medicine is any substance or mixture of substances of natural or synthetic origin that has any therapeutic, preventative or rehabilitative properties, which is presented under any pharmaceutical form and is identified as such for its pharmacological activity and physical, chemical and biological characteristics.

On the other hand, the new definition of medical device, contained in Section 3.41 of NOM-241, is broader: "Medical device, instrument, apparatus, utensil, machine, software, implantable product or material, diagnostic agent, material, substance or similar product, to be used, alone or in combination, directly or indirectly in human beings; with any of the following purposes of use:

(i) Diagnosis, prevention, surveillance or monitoring, and/or aid in the treatment of diseases;

(ii) Diagnosis, surveillance or monitoring, treatment, protection, absorption, drainage, or aid in the healing of an injury;

(iii) Substitution, modification or support of the anatomy or of a physiological process;

(iv) Life support;

(v) Control of conception;

(vi) Disinfection of medical devices;

(vii) Disinfectant substances;

(viii) Provision of information through an in vitro examination of samples taken from the human body, for diagnostic purposes;

(ix) Devices incorporating tissues of animal and/or human origin, and/or

(x) Devices used in in vitro fertilisation and assisted reproductive technologies.

As well as those whose main purpose of use is not through pharmacological, immunological or metabolic mechanisms, however, they can be assisted by these means to achieve their function. Medical devices include supplies for health in the following categories: medical equipment, prostheses, orthoses, functional aids, diagnostic agents, supplies for dental use, surgical and healing materials, and hygienic products."

Initially, any product that falls into that definition should be considered as a medical device.

It is also important to remember the List of Products that for its Nature, Characteristics and Uses are not Considered Medical Devices. If the respective product is found in this list, it will be excluded from the regulation of medical devices.

There are other categories that are recognised in practice (eg, combination products), but these are not formally regulated through mandatory instruments.

In general, there is only one type of MA for pharmaceuticals for human health and for medical devices, which is granted by COFEPRIS. The same requirements of quality, safety and efficacy apply, regardless of whether the product is allopathic, homeopathic, herbal or a vitamin pharmaceutical. However, a significant difference would exist between the extent and scope of safety and efficacy data that would be required for an innovator product and that for a subsequent product, and the specific requirement for releasing biologic products after importation. Biotech drugs are also subject to a pre-submission regulatory meeting with the New Molecules Committee of COFEPRIS. Please note also that during the COVID-19 pandemic, a new class of approvals was introduced, although without the legal basis for doing so: emergency authorisations.

The period of validity of any MA for pharmaceuticals and medical devices is five years. After this period, MAs may be renewed every five years. In contrast, a Recognition Letter for Orphan Drugs, the equivalent to an MA, lasts for two years only.

Also, at any time, any authorisation may be revoked by COFEPRIS; for instance, when a new risk to human health is found, if an infringer repeatedly disregards safety measures or if false information is submitted.

There was a recent change to the RIS, so that the second and subsequent renewals of MAs, both for medicines and medical devices, will only be subject to a notification, not to an authorisation.

In general, the procedure for obtaining an MA for pharmaceuticals includes filing the MA application form at COFEPRIS, along with evidence of the following:

• payment of governmental fees;
• manufacturing licence or equivalent;
• notice of appointment of a qualified sanitary officer;
• draft labels;
• information to prescribe;
• certificates of good manufacturing practices for the finished product, its active ingredients and its additives;
• the draft distinctive name;
• the quantitative and qualitative formula;
• quality information; and
• preclinical studies, including pharmacodynamics, pharmacokinetic and toxicology studies.

In addition, for products manufactured abroad, it is necessary to file a representation letter granted to the holder.

The application to obtain a marketing authorisation for medical devices must be submitted with the following:

• payment of governmental fees;
• technical and scientific information that proves the security and efficacy standards;
• draft labels;
• instructions;
• a general description of the manufacturing process;
• a description of the structure, materials, parts and functions;
• certificates of good manufacturing practices for the finished product;
• laboratory tests; and
• bibliographic references, in case they are required.

In addition, for products manufactured abroad, it is necessary to file a free sale certificate, a representation letter issued by the manufacturer of the product, a certification of analysis, sanitary notification of the distribution warehouse, and notification of the sanitary official of the distribution warehouse.

Approval times are as follows:

• for pharmaceuticals that include active and therapeutic indications already registered in Mexico, the decision must be granted within 180 days;
• for pharmaceuticals whose active ingredients are not registered in Mexico but are registered and sold freely in their country of origin, a decision shall be taken within 240 days;
• for new molecules, after a prior technical meeting between applicants and the New Molecules Committee of COFEPRIS, the decision shall be taken within 180 days;
• for homeopathic, herbal and vitamin pharmaceuticals, decisions shall be taken within 45 days; and
• for biotechnological drugs, applications shall be resolved within 180 days.

These approval times can be extended if COFEPRIS requires additional information.

For Class I medical devices, the decision must be granted within 30 days; for Class II, the decision shall be taken within 35 days; for Class III, the decision shall be taken within 60 days.

As with pharmaceuticals, these approval times can be extended if COFEPRIS requires additional information.

There is no mandatory requirement to conduct clinical trials in a paediatric population or to obtain a waiver from this requirement in relation to individual pharmaceuticals. This is completely optional and subject to stricter requirements.

The variation of MAs can be classified as administrative or technical. Technical modifications are those relating to changes in the formulation, indication or manufacturing process. Administrative modifications include variations such as changes to the corporate name or address of the holder, or changes to the information to prescribe. An assignment of an MA is regarded as an administrative modification. Each application to modify an MA shall contain the technical and legal documentation supporting the relevant change.

There are a limited number of cases where an unauthorised product can be imported into the country and be supplied to patients, including low-prevalence diseases, donations (eg, in natural disasters), personal use, experimental products for clinical research, and medical use.

Additionally, if the relevant product is included in the List of Products that for its Nature, Characteristics and Uses are not Considered Medical Devices, it would not be considered as a medical device and consequently would not require a marketing authorisation.

Also, the MoH published two decrees, on 28 January 2020 and 22 June 2021, creating the possibility to import medicines and medical devices that do not have an MA in Mexico, to place them in the public market, provided that they had an MA from certain recognised jurisdictions. For that, a number of steps must take place first, including a prior declaration of necessity, to be issued by multiple authorities. These additions will likely be a source of litigation.

Holders of MAs must comply with good manufacturing practices, stability, pharmacovigilance or technovigilance and labelling standards and regulations; they must also comply with advertising regulations applicable to pharmaceuticals or medical devices.

In general, pharmaceuticals and medical devices are subject to post-approval vigilance. These obligations are developed in technical standards, which generally specify rights and obligations for holders of MAs, distributors, research sites, health institutions, physicians and patients to monitor adverse events or incidents, investigate them, and report them. It is also required to have a pharmacovigilance or technovigilance unit, someone responsible for pharmacovigilance and someone responsible for technovigilance, and a pharmacovigilance or technovigilance manual.

However, Phase IV data is only required for more complex products (eg, complex biologics or biotech drugs), which is decided by the New Molecules Committee.

COFEPRIS has periodically published lists of applications, and of granted or rejected MAs. However, these lists are not updated regularly, and frequently contain limited information that excludes confidential information. Full access to individual files is only granted to the applicant.

Although third parties have long been able to file public information requests in relation to any file held by COFEPRIS, under the mechanisms overseen by the National Institute for Access to Public Information and Data Protection (INAI), COFEPRIS had historically resisted providing access to most of the files of MAs, which it regarded as being confidential in their entirety. Nevertheless, through several INAI decisions, an increasing number of data elements can now be accessed. Fortunately, however, COFEPRIS has now begun to populate a public database on its website that displays key data contained in the MAs for pharmaceuticals.

Confidential information is protected by several special laws, including those related to privacy, intellectual property, administrative procedures, and labour and criminal law.

Relevant legislation includes a combination of the GHL, the Federal Consumer Protection Law and the Federal Criminal Code. These legislative bills provide jurisdiction to multiple government agencies to undertake enforcement actions upon the notice of existence of falsified or illegal goods that could affect healthcare. The action that can be triggered will depend on the facts of the case and the illicit goods involved, as it could be within the legal authority of any of the above-mentioned laws.

In essence, the bills provide a legal framework to file and start complaints, through a potential infringement of the Consumer Protection Law or the GHL. These investigations shall be based on a human health risk or a consumer protection liability, rather than IP infringement. Please note that other actions, such as a damages claim for unlawful conduct that affects a company or damages its prestige and reputation, could be explored in a subsequent stage, provided that an infringement is found to have existed, and depending on the direct liability of the offender.

The actions available under these bills are not in the title-holder’s control; instead, they are under the control of the relevant agency, such as COFEPRIS, the Federal Attorney General Office, the Federal Consumer Protection Agency or the Federal Police. In this regard, the title-holder/manufacturer is entitled to present a complaint for the relevant agency to start an investigation, which could be a joint investigation with law enforcement agencies, depending on the facts of the case. The agency will be in control of the investigation, while the title-holder/manufacturer can assist with the investigation and provide relevant information that will help build the case, although they will not be in control of the investigation and its outcome.

As a result of the above, depending on the investigation’s outcome, there can be injunctive relief such as seizure of illicit goods, or temporary closure of the factory or retail store. These options will be taken by the administrative agencies or the law enforcement agencies ex officio, as the title-holder is not part of the case. For these situations, it is important that the title-holder follows the official investigation closely to ensure that the administrative agencies or the law enforcement agencies will liaise in due course.

A combination of provisions found in international free trade agreements, the Mexican Industrial Property Law and Customs Law provide the possibility of filing border measures against counterfeited pharmaceuticals and medical devices, provided a recognised IP right is at risk, which includes trade marks, patents and industrial designs. The system is operated through detection technology and databases that are built or fed by title-holders, who will be alerted to suspected goods.

A pharmaceutical manufacturing plant is subject to a licence, and a medical device manufacturing plant is subject to submitting a notice of operation. COFEPRIS is the authority responsible for granting the manufacturing licence and receiving the notice of operation.

To obtain the manufacturing licence, a certificate of good manufacturing practices (GMP) must be obtained. For that, a COFEPRIS inspection visit to the manufacturing plant must first be requested, to review whether it complies with Technical Standard NOM-059-SSA1-2015 of good manufacturing practices of pharmaceuticals. If, in the inspection visit, COFEPRIS determines that the facility is in compliance, it would grant a certificate, which shall be included in the manufacturing licence application. Once the application is submitted, COFEPRIS shall not take more than 60 business days to grant the manufacturing licence. The activities approved by the manufacturing licence are the manufacture and warehousing of pharmaceuticals in the same facility. The operation licence does not have an expiry date.

The notice of operation for a medical device manufacturing plant needs only to be submitted to COFEPRIS, and becomes valid the moment it is filed. The notice of operation requires the appointment of a sanitary officer, who shall be in charge of the facility. The activities covered by the notice of operation are the manufacture and warehousing of medical devices in the same facility. The notice of operation does not have an expiry date. With the recent issuance of the new NOM-241-SSA1-2021 for GMP of medical devices, a GMP certificate must be obtained.

As a general rule, establishments involved in the wholesale of pharmaceuticals and/or medical devices are only required to submit a notice of operation before COFEPRIS. As mentioned, the notice of operation enters into effect at the moment of filing. The notice of operation does not have an expiry date.

The exception to the general rule is warehouses dedicated to the wholesale of controlled pharmaceuticals (eg, psychotropic and narcotics) and biological products for human use, which are subject to a licence.

As mentioned above, pharmaceuticals are divided into the following six sections in relation to their prescription status:

• Section I – prescription pharmaceuticals that can only be acquired by a special prescription or permit issued by the regulatory authority (eg, controlled substances);
• Section II – prescription pharmaceuticals that require a prescription to be collected and retained in the pharmacy as well as registered in the pharmacy control books;
• Section III – pharmaceuticals that can only be purchased with a prescription that may not be supplied up to three times, recorded in the control book and retained in the pharmacy after the third supply;
• Section IV – pharmaceuticals that require a prescription, but that can be supplied as many times as directed by the physician (eg, antibiotics);
• Section V – non-prescription pharmaceuticals, authorised for sale only in pharmacies; and
• Section VI – pharmaceuticals that do not require a prescription and can be supplied in any establishments other than pharmacies (eg, over-the-counter products).

There is a vast body of law, secondary regulations, technical standards and administrative decrees controlling the area of foreign trace and customs law. These are not necessarily co-ordinated with the health regulation, creating frequent issues for companies in the pharma and medical devices sectors.

Depending on the moment and the type of regulation to which the goods are subject, the following authorities could be involved:

• the Tax Administration Service, mainly through the General Customs Administration;
• the MoH, through COFEPRIS;
• the Ministry of Economy, mainly through the General Direction of Standards and the Federal Consumer's Protection Agency (PROFECO);
• the Attorney General's Office; and
• depending on the type of good, enforcement may also be in the remit of the Ministry of Agriculture, Livestock and Natural Resources; the Ministry of Defence; the Federal Commission of Telecommunications; etc.

Imports must be carried out by an individual or legal entity that is registered in the Importers' Registry, which is administered by the Tax Administration Service.

Depending on their tariff classifications, certain goods – including certain chemical products, radioactive goods, chemical precursors and essential chemical products – may be subject to registration in the Specific Sectors of the Importers' Registry. This registration is subject to additional requirements, which depend on the sector in which the importer is to be registered.

Imports of all pharmaceuticals and some medical devices are subject to the obligation of securing specific import permits.

While they are normally administered by the MoH through COFEPRIS, depending on the type of product, they may also be subject to other types of import or export permits, including those imposed by the Ministry of Economy; the Ministry of Agriculture, Livestock and Natural Resources; the Ministry of Defence; the Federal Commission of Telecommunications; etc.

Among others, the following exceptions to the obligation of securing an import or export permit may apply:

• importing for personal use;
• importing for donations;
• importing for experimental use; or
• importing for low-prevalence diseases.

In Mexico, non-tariff regulations and restrictions – such as import permits and licences – are imposed based on the tariff classification (HTS Code) and the description of the goods to be imported or exported.

Pursuant to the Mexican Constitution, the executive power may regulate or restrict the importation or exportation of products, provided that Congress grants it such authority. By the end of each year, the use of that authority needs to be approved by Congress.

In terms of the Foreign Trade Law, Congress grants this authority to the executive power, with the condition that, in order for a non-tariff regulation or restriction to be imposed, the corresponding decree or administrative regulation must be published in the Federal Official Gazette, and the goods subject to such regulation or restriction must be listed by tariff classification and description.

Mexico is an active party to the Pacific Alliance (along with Chile, Colombia and Peru). The Pacific Alliance and its framework agreement have specific provisions on regulatory co-operation and product specific annexes, including cosmetics, medical devices, dietary supplements and cleaning products. This has started a very promising regulatory harmonisation/convergence process in the region.

In addition, Mexico is party to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (the revised Trans-Pacific Partnership Agreement), which also contains promising provisions on the regulatory co-operation side.

Also, the United States–Mexico–Canada Agreement (USMCA), which entered into force in July 2020, contains several regulatory annexes for pharmaceuticals, medical devices, chemical substances, cosmetic products and food products.

In Mexico, the private and public markets for medical products have separate rules depending on whether the products are patented. However, this mainly applies to pharmaceuticals and has changed during the new federal administration.

The very general legislative bases of the dual system are contained in two laws: the GHL (Article 31) and the Federal Economic Competition Law (Article 9). However, the rest of the rules are largely contained in separate regulatory instruments of lower hierarchy, including the Addendum to the Agreement for Drug Pricing Co-ordination signed in 2004 between the Ministry of Economy and the National Chamber of the Pharmaceutical Industry, and the technical standard for labelling of drugs (NOM-072-SSA1-2012).

Private Market

Patented drugs for the private market are subject to a hybrid system that is largely self-regulated and voluntary. Under this system, companies compile their own information about their prices in other jurisdictions and submit that to the authority, which monitors the accuracy of the data.

The manufacturer is required to stamp the price on the label of the product at the end of the manufacturing process. PROFECO verifies that the prices at the point of sale – ie, at pharmacies – do not exceed that price.

Generic drugs, off-patent products and medical devices in general are not part of this pricing regulation, being subject to direct price competition in the market. Newly launched products are initially exempted, as explained below.

Public Market

Patented pharmaceuticals for the public market are subject to a different process of annual negotiation. For ten years, such negotiations were held with the Co-ordinating Commission for Negotiating the Price of Medicines and other Health Inputs (CCPNM), which was created in 2008 and gathered all major public institutions buying drugs in Mexico, as well as the Ministries of Public Administration, Finance, Economy, and Health. However, the new federal administration that took office on 1 December 2018 eliminated the CCPNM, gave wide faculties to control public acquisitions, including medicines, to the Ministry of Finance and signed an agreement with the United Nations Office for Project Services (UNOPS). Under the new system, prices are directly negotiated directly with the Office of Administration or UNOPS.

That change eliminated the prior distinction between pricing and acquisition and is now defined in the same process for patented medicines.

The estimated price for generic and off-patent products is initially defined by those public institutions co-ordinating the public procurement exercise, based on their market research. However, the price will be influenced by the discounts offered by the participating bidders, and will ultimately be determined in the acquisition award and contract.

As stated previously, newly launched pharmaceuticals for the private market are initially exempted from the maximum retail price (MRP) system, given that in principle they would not have a comparator. The manufacturer can initially set the price, subject to a re-evaluation three months after the product launch. The review is conducted to verify whether the product exists in the international market. If this is confirmed, then an MRP will be estimated. If this occurs, the price of newly launched products will be influenced by prices for the same product in other countries, but not based on a health technology assessment. As mentioned, the price regulations for medicines do not apply to medical devices.

The Mexican system does not operate through a model of reimbursement, but through a model of public procurement of drugs and medical devices.

There is a comprehensive legal regime for public procurement in Mexico that is overseen by the Ministry of Public Administration, in co-ordination with the purchasing entity. However, this may change during the new federal administration. In general, it operates through three mechanisms:

• public bidding, with a national or international scope;
• invitation to at least three persons; and
• direct awards.

Whereas public bidding is the general rule, purchasing by invitation or direct award is allowed under certain circumstances, which are listed in the Federal Law for Procurement, Leases and Services of the Public Sector. One of the exemptions refers to the case where there are no substitute products, there is only one possible supplier or the required product is patent protected.

Accessing the public market for pharmaceuticals does not begin directly with public procurement. There are other key regulatory steps to be met before that, given that public procurement works through product codes granted by other health authorities, in relation to a Basic Formulary and several Institutional Formularies. The process for incorporating a product to the Basic Formulary and then to Institutional Formularies takes two to four years. The decision is largely based on economic evaluation. Only after a code has been allocated to a given product, which in the case of medicines was assigned per active ingredient, could that product be part of a public procurement exercise.

In July 2020, a collaboration agreement was signed between the National Health Institute for Wellness (INSABI) and UNOPS. The agreement provides for international acquisition of medicines and other medical products, through a procedure that is managed by UNOPS, in assistance of INSABI, under UNOPS' procurement standards.

In August 2020, the Mexican government published in the Official Gazette a brief but important amendment to the Procurement Law, which added a fifth paragraph to Article 1. This provision establishes a rule of exception for the application of the Procurement Law for the acquisition of goods or health services contracted by agencies and entities with international intergovernmental organisations, when the acquisition of such goods and the contracting of services are carried out through previously established collaboration mechanisms, provided that it is proven that the guiding principles for public procurement referred to in the Mexican Constitution are applied.

The recent adoption of all those legal instruments creates a scenario of great concern regarding the public procurement of medicine and medical products in Mexico. Many stakeholders expect that they system will go back to normal once this federal administration finishes its term.

Previously, the methodology was quite clear and included cost-benefit analyses. Now it is not clear. Likewise, it is not currently clear whether the new administration will be open to exploring value-based proposals.

The regulatory framework links the rules of prescription and dispensing with those of substitution at the point of sale. There are two scenarios for the private and public markets.

For the private market, the first rule is that prescribing by the active ingredient or generic name is mandatory, and that the use of the distinctive name or trade mark of the product is optional for the health professional. The second and perhaps most important rule is that if the prescription contains only the generic name, the pharmacists are allowed to substitute the product. Conversely, if the product was prescribed by its distinctive name, then substitution at the point of sale is forbidden.

In contrast, for the public market, although the basic rule structure is the same, there is no reference to the option of prescribing by trade mark, which means that substitution is always allowed. At the same time, it has also become a long-held practice in the public sector to prescribe using the product code allocated in the Basic Formulary, which is also based on the active ingredient. There are provisions allowing prescriptions to be made under different conditions, but the respective institution would need to authorise such decisions, which is not commonly used.

Until December 2021, there were no specific regulations for medical apps. However, with the new version of NOM-241-SSA1-2021 ("NOM-241"), this changed and now there are specific provisions for software with health-related functionalities, including a definition of software as a medical device (SaMD). However, NOM-241 will not enter into force until August 2023.

In addition, the Permanent Commission of the Pharmacopeia recently announced that it will issue, in December 2022, new rules for the risk classification of medical devices, including medical apps, as part of a new version of the Supplement on Medical Devices. SaMD was the concept introduced by the International Medical Device Regulators Forum.

There are no special rules for telemedicine as yet; a technical regulation was drafted at one point but it was withdrawn. That failed attempt did not fully address the physician-to-patient private market interaction, covering only a clinic-to-clinic scenario, mainly to address an urban-to-rural public institutions vision.

The absence of special new rules for telemedicine means that the existing rules and requirements for the provision of health services and the exercise of medicine are applicable, including the existence of a physical consulting room from which the health service is supposedly provided, and the need to be licensed in Mexico in order to practise medicine. There are several draft initiatives on digital health, submitted at the Federal Congress, all of which proposed a prior approval system for telemedicine platforms.

The same legal instruments that are applicable to printed regulated advertising material apply for online content. However, there are additional guidance documents that were produced by the regulator, which include provisions that refer to digital advertising, advertising on social networks and permits for online portals.

There is still a contradiction between two key regulatory instruments. Whereas the Secondary Regulation for Medical Services was amended in 2018 to allow the prescription of medicines by electronic means, the Secondary Regulations for Medical Products still refers to a handwritten signature. The problem is that the first instrument applies to physicians and the second one applies to pharmacies. The contradiction has made pharmacies hesitate, since they are primarily bound by the unchanged instrument. However, in 2020, the Supplement for Establishments of the Mexican Pharmacopeia was amended, to allow for an e-signature. The problem was that (i) it imposed an additional authentication measure not required before, and (ii) it excluded certain groups of products from its scope. There are several draft initiatives submitted at the Federal Congress that would align this at the law level.

The online sale of medicines and medical devices is closely linked to the issue of whether the retail of a product category is restricted to a particular point of sale.

In that context, there would essentially be three groups of medicines:

• those that require a prescription and can only be sold in pharmacies;
• those that do not require a prescription but have to be sold in pharmacies; and
• those that do not require a prescription and can be sold elsewhere.

In contrast, there would be two groups for medical devices: those that are restricted to specialised shops (ie, orthopaedic devices), and those that can be sold elsewhere, including pharmacies.

From there, it is important to note that there is not yet any regulation addressing the online sale of medicines; the existing rules applicable for physical pharmacies would apply.

Thus, the regulatory set-up to support an online sale of products would have to take into account the existence of a retail control for the relevant medical product and the existing rules for certain specialised retail shops.

There are multiple legal instruments to consider, including technical standard NOM-004-SSA3-2012 on health records and NOM-024-SSA3-2012 on the electronic health record. However, there are still gaps in the regulation, including more flexible mechanisms to account for the electronic signature of such records.

Patents are regulated by the new Federal Law for the Protection of Industrial Property (FLPIP), and are granted by the Mexican Institute of Industrial Property (IMPI). The new FLPIP entered into force on 5 November 2020.

In Mexico, the issues most frequently encountered by companies when trying to apply for patents include the intention of some examiners to try to limit the scope of protection of the subject matter as exemplified in the specification of the invention. Understanding the law and the science behind the invention is required to overcome this. This requires having in-house technical expertise.

One of the critical issues with regard to pharmaceutical patents is the need to obtain patent protection for second and subsequent medical uses. Despite the fact that second uses have been accepted in Mexico, there were no legal bases for its protection. The new FLPIP provides legal certainty for its protection and expressly states that new uses of known compounds shall be patented as long as they comply with the other requirements established in the Law.

Any activity conducted in relation to the protected second use, without proper consent, will constitute an infringement.

Under the new FLPIP, adjusting the validity of patents through supplementary certificates is now possible for patent applications filed as of 5 November 2020. These supplementary certificates must be requested by the patent applicant to compensate for unreasonable delays from IMPI, provided that the granting of the patent took more than five years from the date of its presentation in Mexico. The term of validity of the supplementary certificates may not exceed five years, and the validity will be one day for every two days of unreasonable delay attributable to IMPI.

Unreasonable delays will be counted from the date on which IMPI notifies the patent owner with the official action informing that the formal examination has been concluded. To account for the unreasonable delay, the periods attributable to actions or omissions of the applicant will not be taken into account, such as delays in answering requests or extending the deadlines to respond to them; or periods not attributable to IMPI, such as the procedure being suspended due to litigation or by acts of force majeure.

Supplementary certificates that were granted in violation of the law could be objected to by third parties.

The following activities constitute patent administrative infringements:

• giving the appearance that a product is patented when it is not – if the patent has lapsed or been declared invalid, the infringement will begin one year after the date of the lapse or, where applicable, the date on which a declaration of invalidity became effective;
• manufacturing or producing products protected by a patent without the consent of the owner of the patent, without the appropriate licence;
• offering for sale or distributing products protected by patent knowing that they were manufactured or produced without the consent of the patent owner or without the appropriate licence;
• using patented processes without the consent of the patent owner or without the appropriate licence; and
• offering for sale or distributing products that are the result of the use of patented processes, knowing that these have been used without the consent of the patent owner.

It is worth noting that, in Mexico, only actual infringement is actionable. The threat of infringement is not considered by the FLPIP.

The Bolar Exemption was incorporated initially in the health regime. The HSR grant this protection to an application of a generic drug that is submitted during the last three years of a patent over an active ingredient, and to an application of a biosimilar drug that is submitted during the last eight years of a patent over the active ingredient.

Additionally, the new FLPIP included a new provision stating that the right conferred by a patent will not produce any effect against a third party that uses, manufactures, offers for sale or imports a product with a valid patent, exclusively to generate tests, information and experimental production necessary to obtain an MA of drugs for human health.

This is different to the Research Exemption found in the former industrial property regulation and maintained in the new FLPIP, which stipulates that a patent shall not have effect against any third party who, in the private or academic field, and not for commercial purposes, engages in scientific or technological research for purely experimental, testing or teaching reasons.

Under the Mexican IP regime, compulsory and emergency licences are available.

With regard to compulsory licences, the FLPIP provides that, three years after the date of the grant of the patent or four years from the filing of the application (whichever happens first), any person may apply for the grant of a compulsory licence to use the invention when it has not been used, unless there are justified reasons for not having used the invention. The importation of the patented product is considered as use.

However, prior to granting the first compulsory licence, IMPI shall give the patent owner the opportunity to exploit the patent within a period of one year, counted from the date the compulsory licence request was notified. If the patent is not exploited after that year, there will be a hearing, and IMPI will decide whether to grant the compulsory licence. If it decides to do so, IMPI shall specify its duration, terms and scope as well as the royalties payable to the patent holder.

With regard to emergency licences, the FLPIP provides that, for emergency reasons or national security, and for as long as the relevant situation continues, including serious diseases designated as such by the General Health Council (GHC), IMPI shall publish in the Federal Official Gazette a declaration whereby certain patents can be exploited by means of granting a public use licence. This is for cases where, if such a declaration is not made, the production, supply or distribution of the patented product would be prevented, hindered or made more expensive for the public.

In the case of an emergency caused by serious diseases that may harm national security, the GHC shall make a declaration of priority treatment. Once the declaration is published in the federal Official Gazette, pharmaceutical companies may request from IMPI the right to exploit the corresponding patent. IMPI would then have 90 days to decide whether to grant the emergency licence, after hearing the parties and evaluating the circumstances.

The MoH shall establish the conditions applicable to the production, quality, duration and scope of the emergency licences, and the qualification of the technical capacity of the applicant, as well as a reasonable amount for the royalties to be paid to the patent owner.

In relation to important procedural considerations, the following points are worth noting:

• any patentee or licensee (unless expressly forbidden in its licence agreement) can submit a suit against a third party for infringement;
• an important available remedy is the possibility to obtain provisional injunctions; and
• another essential available remedy is to claim damages before a civil court or before IMPI under the new FLPIP, but this can only be initiated after the administrative infringement has been declared by IMPI.

The patent infringement procedure is essentially composed of two stages: first, obtaining an infringement declaration through an administrative proceeding before IMPI, and then obtaining damages directly with IMPI or before a civil court.

An invalidity defence is available in the Mexican IP regime if the patent being enforced was:

• granted in violation of the provisions on requirements and conditions for the grant of patents;
• granted in violation of the provisions of the law in force at the time the patent was granted;
• abandoned as an application during its prosecution; or
• granted by error or to someone not entitled to it.

In practice, invalidity is invoked by the defendant when answering the infringement complaint.

In Mexico, there are no pre-launch declaratory actions, requirements to notify a patent holder, or requirements to clear the way.

Patent linkage was introduced in Mexico in 2003, through a parallel amendment of the RIS and the Secondary Regulation of the Industrial Property Law (SRIPL).

The amendment to the RIS introduced a patent linkage that excludes process patents and explicitly includes only product patents over the active ingredient. However, through litigation, protection has been extended to patents over formulation, doses and use.

The amendment to the SRIPL created a Special Edition of the Intellectual Property Gazette, issued by IMPI, where all relevant and valid patents for active ingredients are listed.

The trigger for protection is the inclusion of a relevant patent in the Special Gazette. The extended protection mentioned was achieved through litigation aimed at the inclusion of patents over formulation, dosing and use in the Special Gazette.

At the same time, the amendment to the RIS mandates all applicants for a marketing authorisation of a drug to submit full information on the status of patent protection relating to its product. Applicants must demonstrate that they are the owner or the licensee of the relevant patent, if any. For this, applicants must produce and sign a sworn oath that they do not infringe patent rights. Then, when receiving an application for a drug approval, COFEPRIS is obliged to make an internal consultation to IMPI in relation to the patents that may be directly relevant to that product.

However, the provisions are not very clear. The ambiguities have created a system that has led to numerous litigations and to a situation where the burden of proof is essentially carried by users. Patent holders have to litigate inclusions and, if successful, they have to inform COFEPRIS of the results, in order to have an impact on the drug approval system.

At the end of 2020 and with the aim of improving transparency, IMPI implemented electronic tools to make it easier to consult information on patents. Through these tools, it is possible to consult:

• the list of patents that will expire in the next ten years;
• a search tool for patents associated with allopathic drugs; and
• IMPI's responses to COFEPRIS on patent linkage issues.

Assuming that a patent infringement action has already been initiated, there are a couple of additional measures that can be taken to obtain extra protection against the counterfeit of protected pharmaceuticals and/or medical devices. One of these measures is the seizure of the infringing goods, both in actual commerce and in customs. Alternatively, the confiscation of packaging, stationery, advertisements and similar objects that might be used to infringe the protected rights, as well as the seizure of instruments used for the manufacture and commercialisation of those infringing products, is also possible, according to the Mexican IP Law.

Criminal procedures can be triggered against the following:

• the reoccurrence of a patent infringement;
• the intentional falsification of a protected trade mark;
• the production, storage, transportation, importation, distribution or commercialisation of goods that bear a counterfeited trade mark; or
• the intentional supply of raw materials used for the manufacture of the previously mentioned goods.

Once the trade mark registration has been obtained from IMPI, no direct restrictions can be actioned against the use of those rights, unless a prior annulment declaration has been issued by the proper authority. However, limitations on the use of a trade mark can be caused by infringement actions against unfair competition practices or trade dress violations. Additionally, parallel importation restrictions could affect the use of brands, but only when the owner of the trade mark abroad is not the same as the one in Mexico, or when both parties do not belong to the same corporate structure. Since prior use rights are recognised under the Mexican IP Law, restrictions on the exclusive use of a protected trade mark could be updated as well, as prior users are not regarded as infringers.

Antitrust, consumer welfare and sanitary restrictions could affect the use of trade marks too, although they do not jeopardise the validity of the IP registration. For instance, the name of a pharmaceutical product could first be protected by a registered trade mark, but eventually not be allowed by COFEPRIS to be used as the distinctive name for the approved medicine, due to the different approval criteria (eg, the health law regime forbids names that contain the same three letters in a word, or generally any reference to organs and diseases on the respective product's name).

Under the new FLPIP, trade dress (plurality of operative elements, image elements, including size, colour, design, packaging or any other elements that distinguish products or services) can be protected in Mexico as a trade mark. In addition, trade dress had been protected in the former law and continues to be protected by the FLPIP through infringement actions against any individual who uses signs, operative elements and image combinations that are employed to identify goods or services that are confusingly similar to previously registered ones, given that such usage deceives consumers, making them believe the existence of a commercial relation between the owner of the rights and the unauthorised user.

Protection for the design of pharmaceuticals and medical devices, as well as their packaging, can be achieved through the registration of a trade mark (design, 3D or trade dress), copyrights, unfair competition and/or an industrial design (ornamentation arrangements in 2D and 3D).

According to the Mexican IP law, data exclusivity for pharmaceuticals (only) is protected under the terms of the international treaties to which Mexico is a party (eg, the USMCA). The protection is granted for at least five years from the date of the approval, but the regulator, as a matter of policy, has only recognised it for new chemical entities, excluding orphan drugs, biologics and biotech drugs. However, the protection for these can be obtained through litigation. Although the first USMCA text adopted in 2018 contained stronger provisions on data exclusivity, the final amended protocol of 2019 eliminated them, leaving the protection essentially as it was before.

The federal government in general did not seek to facilitate the import and commercialisation of any medicine or medical device required in the private sector for COVID-19.

The federal government focused only on public acquisitions of medicines and medical devices. It issued a decree on 27 March 2020 in which it exempted medicines and medical devices acquired by the federal government from public tenders and import permits.

Instead of facilitating existing procedures, it created new authorisations and emergency approvals, which did not exist before and still lack any legal bases.

COFEPRIS did not issue any measure to facilitate the continuation of clinical trials. Instead, it issued a communication on 21 April 2020 in which it reiterated that any change to the approved conditions described in a research protocol would require an approval of an Ethics Committee and COFEPRIS.

Although emergency authorisations do not exist in the regulatory framework in Mexico, the federal government issued many of these during the pandemic, including for:

• diagnostic tests performed at labs;
• ventilators;
• sanitisation services;
• vaccines; and
• medicines.

The scope of these authorisations is largely unknown, as there is no transparency or publicly known database in their regard.

Apparently, certain restrictions have been incorporated in some of these emergency authorisations; for example, in the authorisation of the medicine Remdesivir, the indication of which was apparently limited to "use in specialised hospitals". However, since this form of authorisation does not exist in the legal framework, any restriction could be challenged.

There was an informal announcement from COFEPRIS, published on its website on 8 July 2020, in which it indicated that GMP certificates could be extended for six months under certain conditions. The extension would apply if the product:

• had not been subject to complaints in Mexico;
• had not been subject to sanitary alerts issued abroad; or
• had not been subject to safety measures (eg, suspension of activities) in Mexico.

On 27 March 2020, a presidential decree was issued in relation to any medicine or medical device related to COVID-19, allowing for:

• its public acquisition without public tenders; and
• its importing without any administrative requirement.

No specific regulation was issued to facilitate telemedicine. Some local governments created limited programmes for remotely monitoring the conditions of patients. However, no new instrument was issued to clarify any of the pending issues, such as the existence of contradictory secondary regulations in relation to e-prescriptions.

The federal government had not announced any intention to issue compulsory licences for COVID-19-related products. However, in February 2021, during a formal visit to Mexico, the President of Argentina announced their intention to request the countries of the G20 to declare COVID-19 vaccines as "global goods", which the Mexican President endorsed. Nevertheless, no further legal step was advanced in this regard.

If the federal government decided to pursue that avenue, it would have to comply with the FLPIP. This law establishes, in Article 153, the conditions for issuing a compulsory licence in the event of emergencies, when not doing so would impede, hinder or make more expensive the availability of medicines.

The aforementioned provision creates a procedure where the GHC first issues a declaration of serious disease of priority attention. Then, interested companies can apply for licences to IMPI, which will take a decision in no later than 90 days, after receiving the opinion of the GHC. The MoH will then define the manufacturing and quality requirements for the product, as well as the scope, timeframe and royalties for the compulsory licence, which shall be non-exclusive and non-transferable.

The federal government declared, since March 2020, that COVID-19 constituted a serious disease of priority attention. However, this was a verbatim replication of the similar declaration made regarding the 2009 AH1N1 pandemic, rather than an announcement over its intention to issue compulsory licences.

No special provisions were introduced over product liability of COVID-19 vaccines.        

In contrast to health services, where there was indeed an official programme to convert public hospitals into COVID-19 care facilities, there was no equivalent intention in relation to the manufacturing of pharmaceuticals or medical devices.

There have been profound changes to the system of public procurement of medicines and medical devices since the new federal administration took office in 2018, including changes to large centralised purchases, which for many years had been managed by the Mexican Institute of Social Security. The administration first transferred the responsibility to the Ministry of Finance, but when that failed, it signed a collaboration agreement and transferred it to UNOPS, which so far has also failed. However, those changes pre-dated the pandemic.