OBJECTIVES Compare the public procurement legislation in Brazil and Mexico to identify differences in the assessment criteria and explore implications for genericized therapies.

METHODS A comparative assessment of the public procurement legislation in Brazil (‘Ley Geral das Licitacaoes’) and Mexico (‘Ley de Adquisiciones, Arrendamientos y Servicios del Sector Publico’) was performed. Elements that were compared include: type of procurement modalities, tender evaluation criteria and bidding / adjudication process.

RESULTS Brazil and Mexico have similar public procurement modalities, which include direct adjudication, invitation and tenders. Selection of procurement modality varies depending on the urgency of the purchase, exclusivity of the product (branded vs. genericized) and total value of the purchase.

Tenders in Brazil and Mexico use a formulaic price-centric approach to evaluate bids for pharmaceuticals, where supply and quality consistency are pre-requisites to participate. In Brazil, bids are evaluated through a reverse auctioning system where after a round of bidding, the three lowest offers move to a second bidding round. Mexico provides institutions flexibility to decide if tenders are awarded through a single-step auction or a reverse auction, and if the assessment criteria will be price-only or weigh multiple criteria. In both markets, local manufacturers are given a preferential price margin (5 – 15%).

There are also variances in the adjudication process between markets. While Brazil has a single-tender award, Mexico allows for tenders to be split provided it is outlined in the call for tender. A typical requirement to award a split tender is that the price differential between bids is not greater than 5%.

CONCLUSIONS Formulaic tender criteria focused on price is likely to pose high pricing pressure for therapies that have faced generic and biosimilar competition in Brazil and Mexico, given comparison of tender criteria suggests that price and local manufacturing are the key drivers for brand selection through the tenders.