NCPA - National Center for Policy Analysis


February 21, 2005

In Mexico, patients are flocking to a new chain of drugstores that sells only generic drugs, providing more availability of generics as well as an affordable alternative to pricier brand-names.

Farmacias Similares drugstores are becoming widespread in Mexico and all of Latin America. The founder, Victor Gonzalez, who also runs a company that manufacturers generic drugs, is opening a market that was once dominated by government-run hospitals and clinics.

Customers not only benefit from cheaper drugs, but can also obtain cheaper health care services:

  • Gonzalez operates subsidized clinics near the drugstores, where patients pay only $2.00 per doctor visit and receive prescriptions for generic drugs, a bargain when compared to $30.00 per visit charged by a private clinic.
  • Farmacias Similares charges $3.50 for six 20 mg tablets of the anti-acid drug omeprazol, compared to $20 for the brand-name of the drug, Prilosec, at a conventional pharmacy.
  • Gonzalez' estranged brother, Javier, who runs a chain of traditional drugstores, recently opened his own chain of generic drugstores, with clinics that charge only $1.00 per doctor visit.

However, some observers claim that the generics sold by these stores are not as effective as brand-names. Last month, Mexico adopted laws similar to those in the United States and Europe, requiring that generics must be tested to ensure they are as effective as brand-name drugs. Gonzales notes that the drugs manufactured by his own company, which comprise about 15 percent of Farmicias Similares' supply, passed all tests.

Additionally, the growth of domestic generics manufacturers is posing a threat to U.S. and European drug makers, which have long dominated the Latin American market.

Source: David Luhnow, "In Mexico, Maker of Generics Adds Spice to Drug Business," Wall Street Journal, February 14, 2005.

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