A Fair Price for Health: Mexico's Opportunity on Essential Medicines

In Mexico, access to essential medicines cannot depend on ability to pay or market speculation. We propose a national maximum reference price that passes the state-negotiated price through to the end consumer. If the government buys at $10, no one should pay more than $11, regardless of whether they use IMSS/ISSSTE, private insurance, or the corner pharmacy. The goal: equity, efficiency, and transparency.

Mexico has learned, through successive crises, that access to medicines cannot depend on purchasing power or market speculation. For decades, consolidated procurement systems and complex tendering processes attempted to solve the problem, but the results have been partial: shortages at some moments, price gouging at others, and citizens who continue paying too much for medicines that are, literally, the difference between life and death.

Today we have the opportunity to take a more ambitious step: negotiate with pharmaceutical companies a national maximum reference price that applies not only to the state, but also to the final consumer at any pharmacy in the country. This would mean that if the government negotiates a medicine at 10 pesos, no Mexican would have to pay more than 11, regardless of whether they have social security, private insurance, or buy at the corner pharmacy.

This proposal draws criticism. Some objections are legitimate and worth integrating as part of the response.

1. "Price controls generate scarcity"

The classic orthodox economics argument holds that capping prices discourages production and reduces supply. But this is not about an arbitrary ceiling: it is about passing on to consumers the price already negotiated profitably by the state. If a pharmaceutical company decides to reduce supply after signing an agreement, that is not a market phenomenon; it is a deliberate decision to restrict public health. In that case, the debate is not economic but moral.

2. "Logistics cost money and must be paid"

It is true that pharmacy and distributor margins cover transportation, refrigeration, storage, and inventory risk. No one is proposing to eliminate them. What we are proposing is limiting those margins to what is strictly necessary and transparent. The goal is to incentivize efficiency, not speculation: competing on who offers better service and coverage, not on who charges the most for an essential medicine.

3. "The state is inefficient and creates delays"

It is true that public procurement has failed on occasion, driving up costs when orders arrive late. But the answer is not to abandon the state's leverage; it is to plan with data and digital platforms. Mexico already has the SAT experience: the entire economy invoices online. With the same logic, a national platform for electronic prescriptions and medicine procurement can be created to guarantee transparency, traceability, and multi-year coordination.

4. "There will be a black market"

Another concern is that setting lower prices will spawn a clandestine market. But the risk diminishes if the maximum price already reflects the state's negotiating capacity and is calibrated to real production and distribution costs. Moreover, a digital transaction-control system can track deviations in real time. If a black market emerges, responsibility lies with those who knowingly feed it.

5. "This is a return to state interventionism"

Finally, critics charge that the measure would be a step backward toward interventionism and would discourage private investment. But what is being proposed here is not an ideological whim: it is extending to all citizens the benefit of the state's collective bargaining. Health is neither a luxury nor an ordinary business; it is a human right. And in a country with epidemics of diabetes, obesity, and hypertension, setting a fair price for essential medicines is a policy of equity and shared prosperity.

The Moral and Strategic Opportunity

Mexico has a market of more than 130 million people. That volume is a strategic asset for negotiating with global pharmaceutical companies and for strengthening domestic laboratories. If we succeed in making the state price reference the ceiling for everyone, the country will gain in three dimensions: equity, because no Mexican will pay more than the government; efficiency, because the entire supply chain will be forced to optimize; and legitimacy, because health will be placed where it belongs, above speculation.

This is not about punishing anyone, but about reminding ourselves that the pharmaceutical industry's objective cannot be merely to maximize margins; it must be to participate in a shared project of public health. If we have already demonstrated that digital invoicing can transform the economy, we can now demonstrate that collective bargaining can transform health.

Frequently Asked Questions

Do price controls on medicines lead to shortages?

Not when the ceiling reflects a price already successfully negotiated by the state. The proposal is not an arbitrary cap but a pass-through of the government's own negotiated rate. If a company reduces supply after agreeing to that price, the issue is not market dynamics but a deliberate restriction of public health.

Would pharmacy and distributor margins disappear under this model?

No. The proposal preserves margins for logistics, storage, and distribution, but limits them to what is strictly necessary and transparent, incentivizing efficiency over speculation.

How would compliance and pricing be monitored?

Mexico's SAT digital invoicing system demonstrates that large-scale real-time transaction tracking is feasible. A national platform for electronic prescriptions and medicine procurement would provide the transparency and traceability needed to detect and deter violations.