1. Pharmaceutical Overview 1

2. Pharmaceutical Overview (1) Pharmaceuticals partially covered through various health insurance schemes Public insurance provision dominated by generics Traditionally, three main classes of medicines in the market: -Innovative (patented); -“Interchangeable generics” (approved and registered by MoH based on bioequivalence tests); and -“Similar generics” or similares (generics approved and registered without bioequivalence tests) Public insurance provision of similares phased out 2005-present 2

3. Pharmaceutical Overview (2) High volume of medicines sold through private pharmacies due to insufficient public health insurance coverage of pharmaceuticals Private financing of medicines far outweighs public financing: 80% vs. 20% Majority of private spending on medicines is OOP (over 95%) Still, overall, lowest consumption of pharmaceutical products per capita in OECD 3

4. Snapshot of Pharmaceutical Spending 4 Pharmaceutical spending as % TEH 2 nd highest in OECD (27.1% in 2009) Per capita spending 2 nd lowest in OECD (2009) Medium growth in per capita pharmaceutical spending in 2000s, from very low rates at beginning of decade Between 1999-2009 per capita spending almost tripled from USD 87.3 to USD 249.9 (PPP) Incremental growth expected: pharmaceutical sales projected to rise from US$13 billion (MXN161 billion) in 2011 to US$18 billion in 2015

5. Total Expenditure on Pharmaceuticals and Other Medical Non- durables, % TEH, Mexico, 1999-2009 Source: OECD Stat (2012) 5

6. Total Expenditure on Pharmaceuticals, % of TEH, 1999-2009, Mexico and Select OECD Countries Source: OECD Stat (2012) 6

7. Total Per Capita Spending, Pharmaceuticals and Other Medical Non-durables, US$ PPP, Mexico, 1999-2009 Source: OECD Stat (2012) 7

8. Total Per Capita Spending, Pharmaceuticals and Other Medical non-durables, US$ PPP, 2010 or Closest Year, OECD Source: OECD Stat (2012) 8