Mexico targets a group of Indian generics makers for homeland pharma hub

mexico
(Pixabay) Challenged by the COVID-19 pandemic, Mexico is looking for a pharma supply chain of its own. (Getty)

The human cost of the COVID-19 pandemic has been a strain on countries' ability to obtain medicines produced abroad with lockdowns shutting down inspections and snagging imports. Mexico, seeking an answer to the problem, aims to build its own drug supply chain on home soil.

Six Indian generics makers have signed letters of intent with the state of Hidalgo, Mexico, to establish a pharma hub for manufacturing and logistics amid the country's push to establish a homegrown drug industry, The Economic Times of India reported.

The drugmakers targeted in the effort—Dr. Reddy's, Zydus Cadila, Glenmark, Torrent and Hetero—will have access to a $10.6 billion Mexican drug market, among the largest in the Latin American region, and are expected to make a push into neighboring countries, the Times said.

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The region is already home to around 200 pharmaceutical companies attracted by lower wages and construction costs. The companies' intent letters will give them preferential status in drug procurement as well as eased registration and export rules, the Times reported.

RELATED: U.S. Army taps Florida CDMO Ology with $106M work order for COVID-19 shots, therapeutics

Mexico's plan comes as the COVID-19 pandemic has challenged nations' access to generic and branded medicines produced abroad.

In the U.S., anxiety over drugs produced in China, specifically, during the crisis has led to a wave of investment in stateside drugmakers and efforts to "onshore" American companies' manufacturing facilities. But unlike Mexico, which has gone after major generics companies, the U.S. has targeted a group of little-known drugmakers to build its supply chain.

In a deal typical of the times, the U.S. Army handed a $106 million contract to Florida contract manufacturer Ology Bioservices in late August to perform fill-finish duties for targeted COVID-19 vaccines and therapeutics.

The Army contract paid out $53.1 million upfront to reserve capacity for roughly 187 million vaccine or drug doses, according to a release. The work order was signed under the umbrella of the Trump administration's Warp Speed initiative, Ology said, at a value of roughly $0.57 per dose.

But even larger players have inked deals with the government, including some that have raised eyebrows with congressional leaders and U.S. economic regulators.

RELATED: Kodak execs didn't illegally trade stock while touting big move into pharma: report

In May, the administration floated a four-year, $354 million contract with a fledgling company, Phlow Corporation, to build a generic medicine and active pharmaceutical ingredient plant in Richmond, Virginia, and supply COVID-19 treatments produced there.

The government followed that up in July with a $765 million federal loan to camera maker Kodak to retrofit two existing plants into drug manufacturing facilities—a move that caught eyes if only because Kodak had a limited history in pharma.

But accusations of insider trading by Kodak's leadership and investors nearly derailed the deal after Securities and Exchange Commission experts flagged questionable trading moves in the days surrounding the July announcement. In September, a Kodak board-appointed committee cleared (PDF) Kodak's executives and shareholders of those accusations.

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