Decree for the Promotion of Pharmaceutical Investment and the so-called “plant requirement”

June 10, 2025

On June 2, 2025, the “DECREE to promote investment within the national territory to strengthen the development of the pharmaceutical industry and the production of health products, as well as the development of national scientific research” was published in the Official Gazette of the Federation.

This decree outlines new provisions applicable to consolidated public procurement procedures for medicines and medical devices, which will begin to be implemented in 2026 for deliveries in 2027.

The Decree aims to consolidate a strong and self-sufficient pharmaceutical industry by promoting national investment in the production of health products (medicines and medical devices) and fostering scientific research and the development of innovative products in the country.

In summary, the Decree establishes the following:

• The Ministry of Health must promote the participation of companies with national investment in the production chain or those initiating the installation of related infrastructure (factories, laboratories, warehouses), as well as those conducting scientific research or innovation in health. In this regard, the Ministry of Health must issue the corresponding guidelines within 90 days following the publication of the decree.
• COFEPRIS will implement measures to expedite procedures related to sanitary registrations, research protocols, import permits, and export certificates to facilitate national manufacturing.
• In public procurement procedures for generic medicines, the points and percentage criterion will be applied, favoring those who demonstrate national investment in the production chain or scientific innovation activities.
• A “Pharmaceutical Investment Promotion Committee” must be created, which will be formed of representatives from the Ministries of Health, Economy, and Anticorruption, and will be chaired by the Ministry of Health.
• The committee’s objective is to analyze investment proposals, considering the estimated amount of public procurement, investment level, productive capacity, and degree of research in Mexico; it will also be responsible for facilitating dialogue with the industry.
• Finally, the committee’s decisions on investments will be formalized in action coordination agreements between the government and interested companies, including production plants, laboratories, and scientific innovation initiatives.

Unlike the previous scheme in effect until 2008, when Article 168 of the Health Law Regulations required a manufacturing sanitary license in Mexico as a condition to obtain a marketing authorization, implying the presence of a production plant in the country, the new decree does not reestablish this “plant requirement” as an obligation to obtain a marketing authorization and eventually commercialize the medicines. However, it incorporates, adapts, and includes it in the Decree as a preferential criterion in public procurement procedures, so having a plant or investment in the national territory is not mandatory but provides advantages in public procurement procedures. It is important to note that this plant requirement established in Mexican regulation was repealed in 2008 due to a dispute arising from non-compliance with a free trade agreement between Mexico and a neighboring Central American country.

Although this measure aims to encourage national investment and strengthen the pharmaceutical industry, it may generate legal uncertainty and is inherently discriminatory and restrictive. The lack of specific and targeted guidelines contradicts the principles of fair competition, equality, and non-discrimination established in the Constitution and international treaties.

Therefore, we consider that the Agreement is subject to challenge upon its entry into force, as it contravenes various constitutional provisions, as well as several provisions and international treaties signed with Mexico’s trading partners, which include the principle of national treatment in these international instruments.

Thus, the guidelines issued by the Ministry of Health to ensure transparency, objectivity, and proportionality will be essential to avoid creating indirect barriers that affect the legality and effectiveness of public procurement processes in the health sector. We will remain vigilant.

OLIVARES will continue to monitor the objectives set forth in this decree and its eventual implementation to inform and advise our clients in a timely manner.