Mexico accounted for 37 percent of all pharmaceutical sales in the region, a 13 percent growth in 2005. This was mainly due to the country’s growing economy, as well as the government’s recent moves to expand healthcare. In 2005 domestic production amounted to nearly $8 billion, representing approximately 1 percent of GDP for that year. Annual growth in Mexico is expected to remain at 12 percent through to 2010, fueled by the overall economy and the expiry of over 5,000 pharmaceutical patents. Multinational manufacturers are increasingly eyeing this attractive and growing market.
In such a dynamic market, secondary industries such as pharmaceutical packaging play a decisive role. Packaging is an essential part of the pharmaceutical industry, and shapes the way in which medications are distributed, transported, displayed, and ultimately, sold to consumers.
Several factors come into play when determining what type of package will be used for a given medication. The most visible one is consumer marketing. Especially with over-the-counter medications, laboratories aim to manufacture packaging materials that appeal to customers, incorporating logos, types and colors that portray a serious, professional and trustworthy image. Laboratories also package their medications in presentations which are conducive for their target market, depending on whether they are, for example, seniors or children.
Another important factor is cost control. Some packaging materials such as Alu-Alu or Tyvek offer superior barriers to the environment, but at a higher cost. The decisive factor is the medication’s characteristics. Medications have different characteristics based on their active ingredients, which determine the degree to which a substance has to be protected from outside agents such as moisture or light.
Packaging types can be divided into three broad categories: glass packaging, plastic bottles and flexible packaging. Flexible packaging can further divide into sachets, blisters, pouches and laminated tubes. Many flexible packaging types are also used for medical devices such as catheters, needles, surgical tools and gauze. The pharmaceutical packaging market in Mexico in 2006 was valued at $27 million, of which plastic bottles makes up about 35 percent and flexible packaging 58 percent. Glass packaging, accounting for only 7 percent, is more expensive than plastic, heavier for transportation and more fragile, and manufacturers have been substituting for plastic whenever possible. Nonetheless, there are some medications that require a glass container due to the solution’s characteristics.
New developments in medication presentations, such as chewing gum and chewable medications, are increasingly popular because of the ease of ingesting the active ingredient. These medications are invariably packaged in blisters or plastic bottles due to their characteristics, highlighting once again the increased popularity of these two types of packaging.
Production regulations and requirements are a further factor to take into account. A country’s health ministry or secretariat is in charge of regulating and supervising drug manufacturing through a series of laws and regulations. More often than not, laboratories choose to outsource their production due to the high costs associated with certification. Furthermore, if a given laboratory only produces one medication, it would be unprofitable to build an entire facility for the production of one highly specialized drug.
Outsourced manufacturing is increasing by all the players in the Mexican market. As medications evolve and become more specialized, the need to specialize production also increases. Toll manufacturing and contract packaging are two activities that go hand-in-hand. If a third party manufactures a medication, most often they also package it under the same strict conditions. The toll manufacturing and contract packaging markets in Mexico amounted to $7.9 billion in 2005, clearly showing its importance to the laboratories.
Overall, the pharmaceutical packaging industry in Mexico is expected to grow at an average rate of about 7 percent per year over the coming ten years. Flexible packaging is expected to grow at 9 percent during the same time period, clearly outperforming the market. Moreover, the Mexican market will likely continue evolving in materials and processes available. The ensuing ten years should see important adaptation of the domestic packaging manufacturing capability to that of more sophisticated markets. The introduction of highly specialized active ingredients as well as innovative medication presentations will cause market dynamics to move towards a maturing market, in which not the strongest but the smartest players will remain competitive.