Largest Public Tender Bid for Healthcare Products in Mexico and Available Legal Actions

June 19, 2019

The Ministry of Health (MoH), accompanied by the Ministry of Finance (MoF), recently released rules relating to the investment of around MXN 17 thousand million (approximately USD 890 million) to acquire healthcare products that public insurers need for the second quarter of 2019. While the MoH is in charge of governing the process, the MoF is the agency that carries out the acquisition process in practice. More than 300 companies have stated their interest in participating.

The rules of this tender depart from tenders of previous government administrations by directly opening it to all international participants and establishing maximum retail prices generally lower than the lowest available prices in Mexico. As expected, these rules have been highly criticized.

In its first meeting to clarify doubts on June 11, the MoH received several complaints from stakeholders. These range from criticizing logistics for product distribution to questioning legal and technical reasons for opening this tender to all international participants, rather than beginning with national and international participants from countries that are business partners of Mexico through Free Trade Agreements. Records show more than 5,500 participant inquires or petitions, most of which have been insufficiently answered.

The MoH originally set the deadline for submitting offers, and receiving a subsequent award, for June 20, but the MoF has recently extended it as long as possible, to June 24. Involved public insurers need the acquired products by the beginning of July to prevent shortages.

Legal Remedies

Further to ordinary remedies related to public tenders, those participants affected by the award might exhaust an extraordinary remedy to contest such award and attempt to obtain injunctions. This is a constitutional action known as an Amparo suit that is filed before district courts contesting administrative decisions, such as a bid award, rather than suing individuals.

The justifications for such actions range from breach of exclusive rights, if applicable; violation of law and international treaties as a result of directly opening the bid to any international participant; unclear logistics and questionable requests relating to the requirement for bidders to be marketing authorization holders; and unfair competition due to the acceptance of products from some countries with questionable regulatory burdens.

Since the Mexican appeal system is quite complex, it is highly advisable that participants obtain a proper assessment based on their individual case and dedicate maximum care to the preparation and prosecution of submitted actions. Being prepared to trigger actions in advance to the eventual award is key, because it provides time to request and manage injunctions. For example, the timeframe for filing an Amparo suit is short (15 working days from the service date).

Olivares has broad expertise on litigations over the public bid process/awards and obtaining injunctions that prevent harm to clients. Olivares’ team will continue monitoring this tender and will provide updates with developments.