Read the Conversation
Conversation highlights:
- Looking back to look forward,3 achievements of the last 10 years in Mexico’s lifesciences map > Mexico's expanded manufacturing capacity, notably producing vaccines domestically during the COVID-19 pandemic
- Developed and marketed a broad portfolio of generics and mid-tier innovative pharmaceuticals, though biotech remains an untapped area.
- How Mexico should aim to build a strong healthcare system internally and utilize free trade agreements for international market access.
- Post-pandemic and geopolitical shifts have boosted pharmaceutical innovation and market growth, with several Mexican companies evolving from startups into established players.
- Significant investment in the advanced manufacturing plant in Hidalgo to boost production, technology, and regional economic impact.
- Operations span multiple plants in Mexico and subsidiaries in Latin America, serving over 24 million patients across 15+ countries.
- Leadership focuses on sustained growth, innovation, and strengthening Mexico’s pharmaceutical presence internationally.
EF: Can you distill three achievements from the past ten years that brought us to where we are today, and one or two goals for the next decade in Mexico?
GS: I would like to highlight the achievements that show where we are today and where we can go. The first one takes us back to the pandemic and the role that Mexico played during that time, especially in vaccine production and the manufacturing scene. Mexico was one of the few Latin American countries capable of bringing online manufacturing capacities for the COVID-19 vaccine. We brought online the CanSino vaccine, Liomont AstraZeneca, and ProbioMed Sputnik, all manufactured in Mexico and exported to other Latin American countries. This capacity is one of the clear achievements of our industry and something we need to take into account for the future.
The second achievement is the great heterogeneity of products that Mexico has been able to market in the past decade. Mexico has been able to supply very affordable generics. If you look at the pricing of generic products like metformin, insulin, or paracetamol, Mexico has created the capacity to be a reliable partner in supplying affordable generic products for high-volume consumption.
On the other hand, Mexico has also managed to manufacture what we could call mid-tier innovation products, improving the galenic form, delivery mechanisms, pharmaceutical forms, fixed-dose combinations, and delayed-release formulations; what I call super generics. These have generated a high-value middle market.
At the same time, we have started to develop innovative small molecules, such as tegoprazán and erdosteína. However, where we are still working and where we need to continue progressing is on the biotechnological side. On the achievement side, we have developed strong manufacturing and technology transfer capacity, allowing us to receive technologies from the outside, manufacture them, and commercialize them effectively. However, what we have not yet achieved is developing our own technologies and bringing them effectively to market. That is one of the challenges we still have.
EF: Looking into the future, what do you think is going to be one goal that Mexico should have?
GS: I have 2 visions, one internal, from a local Mexican perspective, and one external, where I see Mexico as part of the global health network.
Internally, Mexico has a huge debt to its population regarding health. Over the past seven or eight years, we have gone through several different systems, and none have been able to provide consistent, free, and accessible healthcare for everyone. Because of this, other areas have started to develop on their own to fill those gaps. For example, pharmacies offering consultations have helped cover primary care, and ambulatory hospitals have popped up very successfully to cover the second level of healthcare. However, this growth has not been systematic or well planned. It has been a response to the unmet needs of the population.
First and foremost, I want to congratulate the people who have taken these initiatives and made them possible. Beyond creating many successful businesses, they have generated enormous social value by providing services that the public truly needs, whether through the private or public sector. These are essential services that people depend on.
Internally, what we need now is stronger coordination and clear guidance from the Ministry of Health for a well-planned and effective healthcare system. Whatever is meant to be covered by the public sector should be properly covered there, and whatever is not should be efficiently managed through the private sector.
The biggest challenge to address today is that we are trying to cover everything from both sides without enough resources or planning, and that is simply not a viable way to move forward. So internally, the biggest opportunity we have right now is to take the newest technologies, the best practices, and start making a system that makes sense for us. But this needs to happen with, as we say in Spanish, “la rectoría”—the guidance from the Ministry of Health. That is the internal debt, or the internal challenge.
Externally, on the other hand, I think Mexico right now has a great opportunity. After the COVID-19 pandemic, we have found that the global supply chain structures are being questioned, while regional supply chain structures are being favoured. In that view, Mexico, being so close to and aligned with the largest healthcare and pharmaceutical market, is in a strategically very positive position to become a key partner of the United States and Canada for the supply of products to North America.
I think Mexico needs to understand that this could be its role for the future, and that it needs to harmonize its trade and regulatory frameworks, things like free trade agreements and related regulations, in a way that allows it to interconnect with global markets much more efficiently than it has done so far. This needs to be understood at a very high level because it must then trickle down into the policies of the different agencies like Cofepris, IMPI, Secretaría de Economía, SAC, and Aduanas, for all of it to become effective.
EF: I want to touch base on that opportunity and the growth you mentioned, especially in terms of integrating and strengthening the supply chain. What do you think it takes to achieve that? What do you think has been the triggering factor that has created this strong momentum to harmonize the region and seize the opportunity we are seeing now?
GS: I think the trigger for everyone became evident with the supply chain breakdown during the COVID pandemic. That was the main catalyst that opened everyone’s eyes. You also have the geopolitical factor, which comes mostly from Donald Trump’s push to de-risk from China in a much more aggressive way than before. If you mix this with the reality we saw during the pandemic and the political will to act more aggressively, putting those two factors together is what created this momentum.
We're not just geographically close, we are also epidemiologically close. So, it is only natural that your partners should be your neighbors. If we look at this from a de-risking perspective, it makes perfect sense. As we often say in Mexico, when the U.S. gets a cold, we get the influenza. Our health priorities are significantly more aligned because of our geographic position than they would be with a country located thousands of miles away.
EF: How would you rate the current level of innovation in Mexico? After talking about this for the past ten years, what does the picture look like today in terms of innovation developed in Mexico? And what is the opportunity ahead? So, how would you rate the current state of innovation in Mexico, and how do you think it can drive growth?
GS: Right now in Mexico, I really like the work done by INCIDE in identifying technology-based companies that have made some incredible developments. Many of these companies are either already gaining market share or are on the right track to reach the market soon.
At this stage, Mexico has a clear portfolio of startups with solid science behind them and enough development to be considered reasonably de-risked. For example, we recently discussed Conceivable Life Sciences, which already has funding, is being commercialized, and is now entering the scale-up phase. Other companies have also developed cutting-edge therapies in Mexico, designed for global markets. The professionals behind them are capable of building strong teams and moving these innovations forward.
What I see ahead is a decade where we will start to see a few success stories coming from all of these companies in the Mexican ecosystem. My hope is that these success stories will also motivate the larger financial markets, venture capital, private equity, pension funds, and institutional investors to become more aggressive in giving higher budgets in supporting Mexican and Latin American innovation initiatives. That would give us more resources to be able to bring more success stories to the markets.
Right now, there are quite a few success stories that have gone past the clinical stages; they have begun clinical trials in the U.S., and some have started commercialization of part of their products. So these companies are no longer just ideas; they are now actual companies with actual products and clear pathways. I like that we are now in a different stage than we were maybe five or ten years ago.
EF: Let us talk about the Carnot manufacturing sites. How do you see these new facilities and the investments you are making? I believe they are coming online in 2026. Is that correct?
GS: The facilities are coming online in 2025. Let me break this into three points. A lot of what we are doing at Carnot also comes from what we see in the market.
First, the facilities are just one part of the full strategy. Carmot has been investing significantly in innovation and manufacturing capacities. A few years ago, we discussed our plans and our desire to enter the area of CNS, vaccines, and biotechnological products. We discussed all of that as plans, and we also shared our desire, at that time, I believe we used the term nearshore more than integration. They are reshapings of the same ideas.
Today, these different things are starting to mature in different ways. For example, through our innovation efforts, we successfully launched and commercialized our dermatology line. More recently, we commercialized our central nervous system line, which has been extremely successful. None of the CNS products we launched were branded generics; they were all differentiated in some way. Being able to succeed in a competitive, high-barrier area like CNS with innovative products mostly developed in Mexico proves the mid-level innovation that adds real value to the market.
We have also been able to roll these products out to regional markets such as Argentina, Brazil, and Chile, showing that innovation in Mexico has regional value. The investment in technologies and innovation is clearly paying off with products that are succeeding in the market. Examples include Tegoprazan, co-developed with a Korean company, and Libertrim Alfa, internally developed. Both have been great successes.
So, the investment in innovation is clearly paying off. Now, regarding manufacturing capacities, as we discussed with nearshoring, if we want to supply global markets, we need the manufacturing capacity, both in terms of quality and volume. For Carmot, besides innovation, having sufficient manufacturing capacity is critical, and the new facility we are finishing in Hidalgo precisely addresses this need.
Our products have shown they can succeed in international markets and gain market share outside Mexico. To keep supplying these markets and expand into new ones, we need a much larger manufacturing facility. This allows us to move from being a local company to becoming a regional or global player within our segments.
EF: How do you envision all these investments transforming Carnot, and what kind of global player do you see it becoming?
GS: More “meat and potatoes. We hope that having these new facilities and capacities will allow us to bring our products into our current markets at higher volumes and in a bigger way. Basically, consolidation in Latin America is objective number one for us, our meat and potatoes. The second part is a great opportunity. We believe that with what we have, we can integrate into the U.S. market and also be a supplier of some of these mid-level, high-value products to the U.S. market. If we are able to do that, even having just one success story for one of these products in the U.S. can be a game-changer for a company like us.
