Q&A: enforcement of pharmaceutical product and medical device regulations in Mexico
Pharmaceuticals

Q&A: enforcement of pharmaceutical product and medical device regulations in Mexico

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Regulation of pharmaceutical products and medical devices

Monitoring powers

What powers do the authorities have to monitor compliance with the rules on drugs and devices?

Pharmaceutical products

Pharmaceutical products are subject to the following provisions.

 

New molecules

Essentially, applicants for marketing authorisations must prove the safety and efficacy of their products through standard clinical trials, according to the rules set out by the General Health Law, its regulations and the Official Mexican Standards (NOMs) of good manufacturing of medicines and active ingredients. Concurrently, they also have to request approval of their products as new molecules from the New Molecules Committee of the Federal Commission for Protection against Sanitary Risk (COFEPRIS). According to the Health Law Regulations article 2 section XV, a new molecule is:

  • an active ingredient or drug not approved worldwide (a new molecular entity);
  • an active ingredient or drug already available in other countries, but with limited clinical experience or disputed information, that has not been approved in Mexico;
  • a drug that is a non-marketed combination of two or more active ingredients; or
  • an active ingredient or drug already available on the market, but to be marketed for a new therapeutic indication.

 

R&D companies benefit from a special procedure for drugs that have been previously approved by a regulatory authority abroad to be approved for the first time in Mexico.

 

Generics

Applicants for marketing authorisations must prove that their products are bioequivalent to the innovator product. They have to provide information concerning dissolution profiles or bioavailability studies regarding the reference product. COFEPRIS periodically issues a reference list of medicinal products. Recently, the NOM setting the test to prove that a generic drug is interchangeable with a reference drug was updated (NOM-177-SSA1-2013). Legally, COFEPRIS should not grant marketing authorisation for generics breaching exclusivity rights.

There is a linkage system between COFEPRIS and the Mexican Institute of Industrial Property (IMPI), which aims to prevent the granting of marketing authorisations in violation of patent rights. According to the Intellectual Properties Regulations, every six months IMPI must publish a gazette that includes patents covering allopathic medicines (the Linkage Gazette). The initial IMPI position was that only patents relating to a compound were relevant to linkage review (excluding formulation and use patents). On 31 July 2012, for the first time IMPI included formulation patents in the Linkage Gazette, in accordance with a 2010 ruling of the Mexican Supreme Court (Jurisprudence No. 2a/J7/2010, Federal Judicial Gazette, No. XXXI, page 135).

Use patents are included in the Linkage Gazette by court order, as IMPI considers that they should not be included in the linkage system.

Under the linkage regulations, at the filing of the application, the applicant must prove that he or she is the owner or licensee of the patent of the active ingredient of the product (recorded before IMPI), or state under oath that their application does not violate the list of products published in the Linkage Gazette and observes patent law.

 

Biologics

Amendments to the legal framework to regulate the approval of biologics are recent and being tested. Under the General Health Law, applicants have to prove the quality, safety and efficacy of their products, and that they meet their regulations and applicable NOMs, particularly those for good manufacturing practices for medicinal products (NOM–059–SSA1–2015) and for active ingredients (NOM-164-SSA1-2015).

In accordance with NOM–257–SS1–2014, all biological drugs that were authorised before the legal reform and that are still on the market must enter a regularisation process to comply with the latest standards for biologics. NOM 257 emphasises that key points to ensure the safety, efficacy and quality of biologics are already regulated in other NOMs currently in effect, such as those for clinical trials and pharmacovigilance. NOM 257 empowers the Assessment Subcommittee on Biotech Products (SEPB) to assess technical and scientific data in connection with clinical trials, approval or renewal of innovator biologics or follow-on biologics (biocomparables), and to issue opinions to characterise biologics as innovators, reference products or biocomparables.

NOM 257 provides transitional provisions for the renewal of marketing authorisations of biologics granted before the amendments to the Health Law Regulations for Biologics issued in 2011 came into force. These provisions establish that:

  • COFEPRIS will assess whether biologics refer to innovators or biocomparables;
  • renewal applications for innovators will not require assessment by the SEPB; and
  • renewal applications for biocomparables will require prior assessment by SEPB to identify the product of reference in order for applicants to submit the corresponding tests.

 

These provisions will be applicable only for those renewal applications submitted before 31 December 2015. COFEPRIS, however, missed an opportunity to address the current uncertainty in respect of Regulatory Data Protection for Biologics, as NOM 257 does not provide for guidelines in this regard.

 

Biocomparables (follow-ons)

Applicants must submit clinical tests, and, when appropriate, in vitro tests, to prove the safety, efficacy and quality of products comparable (similar) to those of the reference biologic. The pre-clinical and clinical test used by an applicant for a biocomparable must use the corresponding reference biologic to perform comparative and physicochemical studies. For this, the applicant must submit:

  • in-vitro studies;
  • the report of a comparative pharmacokinetic test, if determined by the Ministry of Health, to show pharmacokinetic comparability on key parameters between both the follow-on and the reference biologic;
  • pharmacodynamics test reports; and
  • comparative efficacy and safety clinical test to show the similarity between both the follow-on and the reference biologic.

 

Although industry participants have welcomed amendments to the approval of biologics, specific rules to approve follow-ons have caused debate. There is currently no indication of a data protection period for biologics. Currently, recognition of data package exclusivity rights for biologics can only be achieved through litigation. Accordingly, there are also concerns regarding the accurate application by COFEPRIS of linkage provisions.

 

Orphan drugs

Orphan drugs were recently introduced into the General Health Law and the Mexican Pharmacopeia. In practice, they are approved by a particular procedure, following rules for new molecules when applicable and appropriate. Specific rules are still pending. The draft of the NOM compiling requirements for granting marketing authorisation includes orphan drugs.

 

Medical devices

The primary legislation for medical devices and diagnostics are the General Health Law, its regulations and the NOM for good manufacturing practices regarding medical devices (NOM–241–SSA1–2012). In general, it would be fair to say that regulation regarding medical devices is lighter than that for drugs and other substances. According to their use, the General Health Law classifies medical devices into:

  • medical equipment;
  • prosthetics, orthotics and functional supports;
  • diagnostic agents;
  • dental supplies;
  • surgical and healing materials; and
  • hygiene products.

 

Marketing authorisation requirements for these devices depends on the level of risk involved in their use, according to a threefold classification:

  • Class I: products that are well known in medical practice and for which safety and efficacy have been proven. They are not usually introduced into a patient’s body;
  • Class II: products that are well known in medical practice, but may have material or strength modifications. If introduced, they remain in a patient’s body for less than 30 days; and
  • Class III: products either recently accepted in medical practice or that remain in a patient’s body for more than 30 days.

 

COFEPRIS analyses medical devices and, if applicable, the software that enables them to work. Conversely, mobile medical applications are a new area that COFEPRIS may address in the future with particular regulations, especially if they represent health risks. As an incentive, applicants can benefit from a special procedure for certain devices that have been previously approved by the US Drug and Food Administration and Health Canada to be approved in Mexico. This procedure is essentially based on a dossier filed with the foreign regulatory agency, to reduce approval time frames by up to 30 working days. Industry participants have welcomed these new rules, but they are still being tested.

 

Powers to monitor compliance

COFEPRIS can request reports from marketing authorisation holders, and make on-site inspection visits in the manufacturing, distribution or storage facilities, essentially to verify that their products meet the approved specifications and do not represent a risk to public health, and to ensure that good manufacturing practices, stability, pharmacovigilance and labelling standards are complied with. COFEPRIS can initiate ex officio legal proceedings to sanction non-compliance. Ultimately, these legal proceedings can result in the revocation of the marketing authorisation.

COFEPRIS is also entitled to implement measures on behalf of public health, such as the seizure of products and ordering a partial or total suspension of activities, services or adverts.

Under certain conditions, COFEPRIS has statutory authority to revoke any manufacturing approval or impose sanctions, ranging from a fine of up to 16,000 times the minimum wage to the closure of the establishment. The imposition of administrative sanctions does not exclude civil and criminal liability. Administrative infringements can incur penalties ranging from a fine up to 20,000 times the minimum wage to the final closure of the establishment. Repeated infringements are considered a criminal offence.

COFEPRIS has broad jurisdiction to seize counterfeit or illegal medicines. The General Health Law classifies the manufacturing and sale of counterfeit or falsified medicine as a crime. In addition, COFEPRIS commonly enters into collaboration agreements with the office of the Attorney General of Mexico (FGR) and the Customs Office in order to investigate and prevent counterfeit and illegal medicines.

COFEPRIS has a permanent pharmacovigilance programme. Under the Health Law Regulations and NOMs, COFEPRIS’s monitoring is focused, among other things, on the following:

Ensuring compliance with good manufacturing practices and standard operating procedures.

Ensuring that activities performed do not exceed authorised limits or differ from those authorised activities.

Ensuring that companies perform validation analyses of their manufacturing processes and systems.

COFEPRIS is entitled to implement measures to protect public health, such as:

  • seizure of products; and
  • ordering the partial or total suspension of activities, services or adverts;
  • revoke a company’s manufacturing approval;
  • impose sanctions, ranging from a fine of up to 16,000 times the minimum wage to the closure of an establishment; and 
  • make on-site inspection visits to manufacturing, distribution and storage facilities.

 

The imposition of administrative sanctions does not exclude civil and criminal liability. Affected parties are entitled to appeal decisions by COFEPRIS through the applicable administrative or judicial venues. 

Investigation time frames

How long do investigations typically take from initiation to completion? How are investigations started?

Investigations conducted by COFEPRIS can be initiated either by the complaint of an individual or by COFEPRIS itself. However, the duration of the investigation varies depending on the complexity of the case. Certain investigations related to the counterfeiting and commercialisation of illegal medicines are generally conducted in a matter of days.

Access to investigation materials

What rights or access does the subject of an investigation have to the government investigation files and materials?

In most contentious administrative and judicial proceedings, the subject of an investigation has full access to the files and materials, except for the information expressly classified as confidential due to the request of an authority or another individual. Third parties are usually restricted from accessing files and materials submitted before COFEPRIS by companies or individuals during the prosecution of administrative proceedings.

Investigations abroad

If pharmaceutical products or medical devices are made in a foreign country, may the authorities conduct investigations of the manufacturing processes in that other country?

No, but under article 168 of the Health Law Regulations, to hold a marketing authorisation foreign applicants must have:

  • an approval from COFEPRIS for a manufacturing facility or laboratory for medicines or biologic products for human use in Mexico; or
  • an equivalent approval (eg, a licence, certificate or another permit document) for any of these facilities abroad from the competent authority in the country of origin.

Enforcement proceedings

Through what proceedings do agencies enforce the rules?

Most agencies hold their own administrative proceedings, and the possibility of applying later to a court remains available. COFEPRIS is entitled to revoke sanitary authorisations in the following cases:

  • when the corresponding products or activities constitute a risk of harm to human health;
  • when exercising an authorised activity exceeds the limits set in the respective authorisation;
  • when the authorisation is used for different purposes;
  • for non-compliance with the Health Law or Regulations;
  • when the product covered by the authorisation does not meet or no longer meets specifications or requirements established by the Health Law, NOMs and other general provisions;
  • when information or documents provided by the applicant is false;
  • when the reports provided by authorised third parties are false; and
  • when the products no longer possess the attributes or characteristics under which they were authorised or lose their preventive or therapeutic properties.

 

There is also an available action called accion popular, whereby any individual with or without proper legal standing can file a complaint before COFEPRIS, arguing and proving that there are certain health risks associated with a product in the market. However, the claimant’s procedural rights are very limited, and these actions are intended to end a health risk and not to obtain compensation.

In coordination with COFEPRIS, the FGR is entitled to investigate and prevent the commercialisation of illegal medicines and also to implement measures on behalf of public health, such as the seizure of products.

The Federal Agency for the Protection of Consumers (PROFECO) can start proceedings for violations of NOMs. Individuals are entitled to file complaints against the providers of a service or manufacturers of a product. PROFECO, non-profit associations and a common representative of a group of at least 30 members can now pursue class actions. The federal procedural laws have been amended to allow class actions before the federal courts.

The Federal Economic Competition Commission (COFECE) can conduct investigations on many aspects related to the manufacturing and commercialisation of medicines and carry out inspection visits on requests of individuals or on its own initiative. After the conclusion of the investigation stage, COFECE will determine whether to close the case or to start administrative proceedings. In both cases, COFECE can impose preliminary injunctions. The affected party can claim damages before a court. Follow-on private litigation against manufacturers is possible but is not as common as in other jurisdictions, such as the United States. Additionally, COFECE can file criminal complaints.

Individuals can file patent infringement and unfair competition claims with IMPI, which is entitled to implement preliminary measures while investigating the infringement, which includes:

  • the recall of infringing goods, or preventing their circulation;
  • infringing articles to be withdrawn from circulation, including tools used in the manufacture, production or obtaining of infringing articles;
  • the alleged transgressor or third parties to suspend or cease all acts that violate the law; and
  • suspension of services or closure of an establishment, when other measures are insufficient to prevent or avoid a violation of rights protected by law.

 

On 1 July 2020, and as a result of the entry into force of the United States–Mexico–Canada Agreement (USMCA), which replaced the North American Free Trade Agreement (NAFTA), the new Federal Law for Protection of the Industrial Property (the IP Law), was enacted. The new IP Law came into force on 5 November 2020. The current system requires parties to first obtain a final declaration of infringement from IMPI before requesting compensation in the civil courts. The new IP Law offers two new options to file a claim for patent infringement:

  • File a civil action directly with the civil courts. This gives the civil courts the authority to resolve disputes in accordance with the IP Law. However, if the validity of the IP right is challenged, the civil procedure will be suspended until the IMPI decides on the invalidity action.
  • File an infringement action with the IMPI and request the determination of damages in a special incidental proceeding once the infringement is declared. The decision on damages can then be enforced by the civil courts. However, according to the transitory provisions of the new law, this option will only be available when the IMPI is ready to implement it. There are currently no clear indications of when this may occur.

 

The imposition of administrative sanctions does not exclude civil and criminal liability.

Patent holders can enforce border measures and the remedies provided by the IP Law. If a generic application is approved while the corresponding patent is still in force, the patent holder or licensee can bring a court action against marketing approval and a patent infringement action to stop the manufacture and sale of products.

Sanctions

What sanctions and other measures can the authorities impose or seek in enforcement actions against drug and device manufacturers and their distributors?

COFEPRIS can initiate ex officio legal proceedings to sanction non-compliance. Ultimately, these legal proceedings can result in the revocation of the marketing authorisation. It is also entitled to implement measures on behalf of public health, such as the seizure of products and ordering the partial or total suspension of activities, services or adverts.

Under certain conditions, COFEPRIS has statutory authority to revoke any manufacturing approval or impose sanctions, ranging from economic fines to closure of the establishment. The imposition of administrative sanctions does not exclude civil and criminal liability.

COFEPRIS has broad jurisdiction to seize counterfeit or illegal medicines. The General Health Law classifies the manufacturing and sale of counterfeit or falsified medicine as a crime. In addition, COFEPRIS commonly enters into collaboration agreements with the FGR and the Customs Office in order to investigate and prevent counterfeit and illegal medicines.

COFEPRIS can make on-site inspection visits to manufacturing, distribution or storage facilities.

In coordination with COFEPRIS, the FGR is entitled to investigate and prevent the commercialisation of illegal medicines and implement measures on behalf of public health, such as the seizure of products.

COFEPRIS has a permanent pharmacovigilance programme. Under the Health Law Regulations and NOMs, COFEPRIS’s monitoring is focused, among other things, on the following:

  • ensuring compliance with good manufacturing practices and standard operating procedures;
  • ensuring that activities performed do not exceed either authorised limits or differ from those authorised activities; and
  • ensuring that companies perform validation analyses of their manufacturing processes and systems.

 

Individuals can file patent infringement and unfair competition claims before IMPI, which is entitled to implement preliminary measures while investigating the infringement. These measures include:

  • ordering the recall of infringing goods, or preventing their circulation;
  • ordering the withdrawal of infringing articles from circulation, including tools used in the manufacture, production or obtaining of infringing articles;
  • ordering the alleged transgressor or third parties to suspend or cease all acts that violate the law; and
  • ordering the suspension of services or closure of an establishment when other measures are insufficient to prevent or avoid a violation of rights protected by law.

Actions against employees

Can the authorities pursue actions against employees as well as the company itself?

Yes, the General Health Law includes a chapter (Title Eighteenth, Chapter VI) on specific offences in which both individuals and the responsible legal entity may be the subject of an enforcement action.

Defences and appeals

What defences and appeals are available to drug and device company defendants in an enforcement action?

Company defendants are entitled to file a nonconformity recourse against the decisions issued by COFEPRIS within 15 working days of the issuance of the decision. Likewise, a decision issued by an administrative authority can be appealed through a review recourse before the corresponding authority within 15 working days of the issuance of the decision. The decision issued in the review recourse can be challenged by means of a nullity trial before an administrative court (the Federal Court for Administrative Affairs), and finally before an administrative Federal Circuit Court.

Minimising exposure

What strategies should companies adopt to minimise their exposure to enforcement actions and reduce their liability once an enforcement action is under way?

Companies should focus on diagnosis of the problem and resolution through institutional proceedings, appealing adverse decisions when applicable.

Recent enforcement activities

What have the authorities focused on in their recent drugs and devices enforcement activity and what sanctions have been imposed?

In past years, COFEPRIS’ enforcement activities have been focused on the seizure of illegal medicines, which has resulted in closure of the establishment and suspension of activities.

Recently, COFEPRIS has been targeting companies that promote, through digital means, the sale of prescription drugs that are either innovative medicines approved in Mexico but manufactured and acquired abroad or generics that have not been authorised in Mexico and that are characterised by having prices considerably lower than those available in Mexico to individuals. Acquisitions of such drugs are made unlawfully through import permits for purported personal use, and sometimes they are not even registered as the quantities are so low. In these cases, the affected companies have filed acciones populares claiming the illegal importation and commercialisation of their products and the generics on the grounds of unfair competition, noncompliance with regulatory requirements and, of course, infringement of industrial property rights.

Self-governing bodies

Are there self-governing bodies for the companies that sell pharmaceutical products and medical devices? How do those organisations police members’ conduct?

The National Chamber of the Pharmaceutical Industry exercises institutional representation of the pharmaceutical industry before the Mexican authorities. Affiliate members are required to comply with the codes issued by the organisation.

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