Today’s guest blog was contributed by Oyihoma Saleh from the Global Prosperity group.
In Mexico access to free medical care and medicines are a constitutional right guaranteed to all citizens. Over the last four decades major reforms have aimed to realize this promise, especially for the uninsured, the poor and those outside formal employment. Yet these efforts have fallen short in practice.
Consider a poor woman experiencing pain in her side. Although she has the right to free healthcare at public facilities, accessing it requires navigating a system plagued by delays and shortages. To see a doctor, she must first secure an appointment, a process that can involve waiting up to 3 hours at the clinic, only to be told to return in two weeks. When she finally comes back for her appointment, she faces another 3-4 hour wait before seeing the physician. The doctor provides reassuring news about her condition and prescribes a simple treatment: “take this pill twice daily for one week.” The prescription should be available for free at the public health pharmacy but frequent medicine stockouts force her, and millions of other Mexicans, to turn to private pharmacies and pay out of pocket, typically for brand-name medications, for which she will not receive any reimbursement.
The financial burden is particularly crushing because Mexico’s pharmacy prices have historically ranked among the highest in Latin America. For lower-income households, medication represents 50% of their healthcare expenses. This pushes millions of people to skip treatment or rely on less effective alternatives when they cannot afford medication. In our research we refer to this phenomenon as nonconsumption—when barriers like cost, time, skill or inaccessibility prevent people from consuming products or services from which they will otherwise benefit.
Seeing opportunity in a crisis
Throughout the 1990s, Mexico’s public clinics and pharmacies struggled with chronic medication shortages and soaring patent drug prices, leaving millions of poor Mexicans unable to access medicines. At the same time, transnational pharmaceutical companies dominated the private retail pharmacy market, accounting for 90% of sales. In response to the growing crisis, in 1997 the Mexican government passed new regulations promoting the sale of generic drugs (medication that contains the same active ingredient as a brand-name drug) beyond public clinics and directly to consumers through private retail pharmacies.
There was one person following this change in law who was ready to act. Victor González Torres, CEO and great grandson of the founder of Laboratorios Best, a company established in the 1950s to manufacture generics for the public sector. Through his work as a pharmaceutical entrepreneur and vocal critic of corruption in the health system, he had an acute awareness of how high medication prices excluded millions of low-income Mexicans, and was determined to create a new market that made affordable medicines accessible to people with the least resources. In 1997, he opened the first Farmacias Similares in a low-income district of Mexico City, which became the country’s first pharmacy dedicated exclusively to selling generics to the public.
Bringing affordable healthcare to the masses
Introducing generics into the retail pharmacy trade in Mexico faced significant challenges, primarily because the public was unfamiliar with generics and suspicious of their effectiveness, even as brand-name medicines remained unaffordable for the majority. Additionally, transnational pharmaceutical companies and private retail pharmacies resisted the move, seeking to protect high margins and their market dominance. To overcome these challenges, Victor González Torres set out to build an entirely new value network designed specifically to serve low-income consumers.
Farmacias Similares bypassed brand-name wholesalers and private pharmacy chains, opening street-level shops in dense, working-class neighborhoods near busy transit hubs and high-traffic corridors, focusing on reach and accessibility for the urban poor and informal workers. It then vertically integrated manufacturing, logistics, and retail to control costs and keep quality consistent.They produced generics at Laboratorios Best, moving them through an in-house distribution network, and selling exclusively through Farmacias Similares stores. This operational efficiency enabled the company to effectively pass on savings to customers, with medications on its shelves priced up to 75% cheaper than branded equivalents carried in other drugstores across the country.
But physical access to generics alone wasn’t enough. To turn proximity into care, each pharmacy was co-located adjacent to a small clinic, operated by a sister company, and staffed by independent physicians offering walk-in consultations for the low-cost of $2 per visit. Here patients wait an average of 15 minutes to see a doctor, and prescriptions given to them can be filled quickly and cheaply next door at a Farmacias Similares, offering significant convenience for informal workers who can’t afford to lose a day’s wages.
To build public trust, the company invested heavily in public education and marketing. It promoted a “culture of generics” with the slogan “Lo mismo, pero más barato” (“the same, but cheaper”) used across storefronts, billboards, uniforms, and TV, radio, and print ads. Victor González Torres also introduced the friendly Dr. Simi. A mascot, brought to life by costumed employees stationed outside thousands of store locations, fostering visibility, joy, and accessibility for passersby. The character was used widely across media, including featuring in health-education TV segments with medical experts explaining the safety and efficacy of generics and appearing at foundation-backed campaigns, from disaster relief to food assistance and community raffles. Over time, Dr. Simi became a widely recognized cultural icon in Mexico synonymous with advocating for affordable, trustworthy care.
Finally, leveraging a franchise model, the company scaled its network of pharmacies nationwide so that communities of 5,000 residents or more had access to at least one Farmacias Similares. As a result, Farmacias Similares accounts for 45% of all prescription drugs sold in Mexico today.
Farmacias Similares impact on prosperity
The “pharmacy-doctor” business model introduced by Farmacias Similares has expanded healthcare accessibility in Mexico. Today the company has grown into the largest pharmacy chain in the country with more than 9,500 stores, 15,000 clinics and a network of 13,000 doctors delivering approximately 136 million consultations each year, while supporting 80,000+ direct and indirect jobs across its value chain.
Farmacias Similares’ story exemplifies the kind of impact market-creating innovations can have on an economy by transforming a product or service that was previously complicated and expensive into one that is simple and affordable, such that a new population of people can access it. The effects extend well beyond healthcare access. By creating a new market, Farmacias Similares stimulated job creation, pulled in supporting infrastructure, fostered entrepreneurship (including franchise operators), generated tax revenue, and helped shift cultural habits by normalizing quick doctor visits and the routine purchase of generic drugs. In doing so the company has not only improved the wellbeing of millions of Mexican citizens, but has also laid the foundation for broad-based prosperity.
