US drugmakers say Mexico’s new Sheinbaum medicine decree breaks USMCA rules and risks shortages, while Mexico insists it is securing supply.
The battle over where Mexico’s medicines are made has moved from presidential press conferences in Mexico City to trade offices in Washington. A new presidential decree from Claudia Sheinbaum ties federal medicine purchases to physical investment in Mexico, giving extra weight to bidders who build factories, labs, warehouses, or research centers in the country.
US pharmaceutical giants, through their main Washington lobby, are now urging the Trump administration to treat that rule as a potential breach of the US–Mexico–Canada Agreement. They argue that using public tenders to reward local production crosses a line between normal industrial policy and discrimination against imported products in a market where the public sector is the largest buyer.
The fight comes just months before the three governments begin a formal joint review of the USMCA in 2026, a process that many in business and civil society already expect to be tense. For medicines, the decree is set to shape Mexico’s next consolidated purchase, a multibillion-peso process that will cover thousands of products for public hospitals and clinics.
Sheinbaum medicine decree
The Sheinbaum medicine decree was published in the federal gazette in early June 2025. It is framed as a tool to “promote investment within the national territory” and strengthen domestic production of medicines, medical devices, and other health products. In practice, it changes how bids will be scored in the consolidated tenders that start in 2026 and supply the system from 2027 onward.
Under the new rules, companies that can prove real investment in Mexico’s value chain will receive additional technical and economic points when their offers are evaluated. That investment can include manufacturing plants, packaging lines, warehouses, quality-control labs, or formal research and innovation projects. Firms that are still building facilities may also qualify if they sign binding commitments with the government. Officials stress that foreign companies are welcome, provided that part of their production or R&D is anchored in Mexico.
The decree also orders the federal health regulator, Cofepris, to speed up key procedures linked to local production. That includes sanitary registrations, approvals for clinical research, and permits to import active ingredients needed for manufacturing in Mexico. Combined with broader procurement reforms that create a new National Public Procurement System and call for high levels of national content in federal contracts, the government presents the package as a pivot away from heavy reliance on imports and toward a regional pharmaceutical hub.
At public events, Sheinbaum and senior health officials have argued that if Mexico is going to spend large sums on patented, single-source medicines every two years, a share of that money should translate into plants, jobs, and technological capacity at home. They also link the decree to their “Polos de Bienestar” regional development strategy, saying new investments should be steered toward lagging regions where the government is promising infrastructure, fast permits, and targeted incentives. El Economista+1
Industry groups in Mexico are divided. Some local manufacturers see a long-sought chance to compete on a more equal footing with multinational suppliers, especially in generic medicines. Others warn that if the criteria are not applied with clear, predictable rules, they could introduce new uncertainty into a procurement system that has already undergone several disruptive overhauls since 2018.
On the patient side, advocacy groups have welcomed promises of a more stable supply of essential medicines but remain wary. Previous attempts to reform procurement, including a high-profile experiment using the UN Office for Project Services to run international tenders, led to serious shortages and emergency purchases. Many now view any change in procurement rules through the lens of those painful years.
Trade fight or health strategy
Across the border, US drugmakers are focusing less on the domestic development narrative and more on the trade law details. In written comments to the Office of the US Trade Representative, pharmaceutical and broader business lobbies describe the June decree as an “offset” or performance requirement because it conditions better treatment in public tenders on local content, production, or investment. They argue that such conditions clash with USMCA provisions that forbid discrimination in covered procurement and explicitly ban offsets, including local-content and investment demands, in government purchasing.
The same submissions point to a pattern that predates Sheinbaum’s election. Since 2018, Mexico has repeatedly changed how it buys medicines, sometimes on tight timelines and with limited transparency. Analysts and health researchers have documented how these shifts reduced the share of contracts awarded through open tenders, raised average prices for some high-prevalence conditions, and contributed to episodes of widespread shortages. Industry groups now cite that history as evidence that health-sector procurement rules deserve close scrutiny in the upcoming USMCA review.
Another plank of the US industry critique targets regulation rather than procurement. Data submitted to US authorities highlight long delays at Cofepris for approving new medicines, even when products already hold authorizations from agencies such as the US Food and Drug Administration. According to that material, the share of new global medicines available in Mexico has fallen sharply in recent years, leaving the country behind most of Latin America and the OECD. The complainants say this runs counter to USMCA commitments that call for marketing authorizations to be handled in a reasonable timeframe.
The decree also intersects with a broader political debate about what the USMCA should look like after 2026. Some US business groups want Washington to use the review to push back against what they see as creeping “industrial policy” in Mexico, including domestic-content rules and investment-linked procurement in sectors beyond pharmaceuticals. At the same time, health-rights organizations and humanitarian groups are urging the three governments to relax certain intellectual property and pricing rules in the agreement, arguing that they make medicines less affordable.
In Mexico, the domestic-investment preference has already been written into a draft overhaul of the General Health Law, which would lock the policy into primary legislation if approved. That would make any future changes harder and raise the stakes of a possible trade clash. For now, however, the immediate decisions lie with Mexican regulators, who must still publish detailed guidelines on how the new points-and-percentage system will work in practice, and with US trade officials, who must decide how far to press the issue in the USMCA process.
What happens next will be closely watched by patients, doctors, and companies on both sides of the border. If the policy succeeds in attracting fresh investment and stabilizing supply without shutting out international competition, Mexico could strengthen its role in North America’s medicine supply chain. If it triggers drawn-out disputes or new disruptions in public tenders, it could deepen distrust in a system that has already been through years of turbulence. For now, the Sheinbaum medicine decree has turned a technical procurement rule into one of the first big tests of how much industrial policy space USMCA partners are willing to tolerate.
