Healthcare Policy Issues
Current Market Trends
Capital: Mexico, D.F.
Population: 123 million (2017 estimate)
GDP: US$ 1.1 trillion in 2016
Mexico’s healthcare system is structured to offer universal healthcare to its citizens and residents, principally through three public health agencies that provide health insurance and that each operate their own network of healthcare facilities. The Mexican Social Security Institute (IMSS) covers most employed individuals and their families, the Institute for Social Security and Services for State Workers (ISSTE) covers public sector employees, and Seguro Popular covers individuals and their families who are unemployed. Opportunities exist across the sector, but particularly for medical devices, equipment, and products.
Healthcare Policy Issues
Mexico’s market for medical equipment, instruments, disposable and dental products has fluctuated significantly in recent years in the mix of local production, exports, and imports. Imports of these products totaled nearly USD 6.9 billion in 2016 after a large spike of third-country imports in 2015. This represented about 70% of the medical equipment and instrument market and approximately 40% of medical disposable products and dental materials used in Mexico. About 78% of the total import market, or USD 5.4 billion of imports, came from the United States in 2016. This amount represented a massive surge in imports from the United States – and in a wide range of categories from dental instruments, hemodialysis, and electrocardiogram equipment to miscellaneous surgical and treatment items such as sutures, catheters, and syringes. These spikes may be due not only to one-time purchases by the government healthcare system but also to construction of several new hospitals in both the public and private healthcare networks.
The main third country suppliers of medical devices are Brazil, Canada, China, France, Germany, Israel, Italy, Japan, the Netherlands, South Korea, and the United Kingdom. A growing competitive problem for U.S. suppliers is low-cost and frequently lower-quality supply from Asian sources, particularly China.
However, medical products from the U.S. are highly regarded in Mexico due to high quality, after-sales service, and pricing, compared to competing products of similar quality. Consequently, U.S. medical equipment and instruments have a competitive advantage and are in high demand in Mexico.
Mexico has also increased the manufacturing of a variety of medical devices, mainly from international corporations that have established in-bond plants in Mexican border regions and other sites in the country. This resulted in Mexico increasing exports of medical devices in 33% from USD 8.6 billion in 2015 to USD 11.4 billion in 2016. Most of this production and exports are of non-sophisticated products, but there is also emerging manufacturing of sophisticated medical devices like pace makers and cardiac valves.
The Mexican government is trying to establish new policies to improve the population’s health. These include expanding the coverage of the public healthcare institutions and trying to standardize the services offered by all of them. They are also implementing new programs to prevent the incidence of diabetes, obesity and chronic diseases like hypertension, cardiac diseases and chronic respiratory diseases.
Other trends are to allow more participation of the private sector in offering solutions like integrated surgery services and integrated management of patients with certain diseases, such as diabetes. The government is also considering a policy change for assigning patients to hospitals and clinics, which are currently segmented by which public medical network owns the clinic. The idea is to improve use of available infrastructure by assigning a patient’s care to the closest hospital or clinic, regardless of the patient’s affiliation with IMSS, ISSSTE, or Seguro Popular.
All medical equipment and devices can be imported duty free with a NAFTA certificate of origin. Imports are subject to a 16% VAT tax over the invoice value.
All medical and health care products that touch or affect the human body need to be registered with the Mexican Secretariat of Health (SSA) prior to sale or use in Mexico. Foreign manufactures of medical devices need to have a legally appointed distributor/representative in Mexico who will be in charge of obtaining the sanitary registration/market approval and will be the responsible for the product(s) in Mexico. U.S. Commercial Service Mexico can provide a detailed list of requirements and advice for processing market approval in Mexico for U.S. medical devices.
Most large public and private hospitals try to have modern and specialized medical devices. Some medium and small private hospitals with limited budgets buy used or refurbished equipment. Public hospitals, by law, cannot buy used or refurbished products. In order to save resources, many public and private hospitals are hiring companies that offer “integrated surgery services” and provide service “per event”, offering all the necessary products required to perform a surgery. This concept has been expanded to other areas where hospitals can use integrated suppliers for different processes such as sterilization, hemodialysis, and radiation treatment. In this way, hospitals avoid making large investments in materials, pharmaceuticals, and instruments, and also reduce the costs involved in keeping and controlling inventories, and maintaining instruments for specialized surgeries.
All public institutions ask suppliers to register with their organization. These institutions may award purchases under USD 3,100 directly to a selected provider. Purchases over that amount must be done through public tenders.
All private health care facilities select suppliers by requesting price quotations. Their decisions are based on the best equipment at the best price.
Most large international corporations offering medical devices have a presence in Mexico. Medium and small foreign suppliers usually sell through legally appointed distributors.
The three public health care institutions account for 70 to 80 percent of total medical services provided nationwide while private health care institutions cover approximately 25 to 30 percent of the Mexican population, including 32 million people with private medical and accident insurance. Some patients affiliated to social security also have private medical insurance.
In the public sector there are 22,133 outpatient healthcare units and 1,373 hospitals, of which 195 are highly specialized medical hospitals. In the private sector, of the 2,967 hospitals, only about 97 have more than 50 beds and offer highly specialized medicine. Most of the hospitals offering specialty health care services are located in medium and large Mexican cities. There are also some medium-sized private hospitals that offer specialty services and focus on high income, insured patients.
Imports supply about 80% of medical equipment and instruments and about 40% of medical disposable and dental products. In 2016, total imports in these four groups of products reached USD 6.9 billion. Of these imports 78.7%, or USD 5.4 billion, were of U.S. origin. Main competitors are from Belgium, Brazil, Canada, China, France, Germany, Israel, Italy, Japan, Netherlands, South Korea and UK.
Mexico has a fast-track process for the sanitary approval of U.S. FDA-approved medical devices and pharmaceuticals, which helps expedite imports from the U.S. For the market authorization of other products, the Mexican sanitary agency COFEPRIS has made considerable advances in clarifying requirements and approval timelines in recent years.
COFEPRIS has worked closely with the industry to deregulate products that do not present risk for the patients. On December 22, 2014, COFEPRIS published an agreement containing a list of 2,242 products that are no longer considered medical devices and that now do not require sanitary registration/market approval in Mexico and can be freely imported. The idea is that this list will be updated periodically. COFEPRIS is also analyzing other ways to expedite the sanitary registration of FDA approved medical devices.
Mexico does not have a reimbursement system like the one in the United States. Public healthcare institutions purchase the products for their services and do not charge patients per product or event. Patients receive all the products included for their care with no charge.
Reimbursement for care only exists for patients with private healthcare insurance coverage. However, there is not a general reimbursement policy for all insurance companies. Each company determines prices and reimbursement according to its own policy.
Besides the sanitary registration, some medical products need to comply with technical standards or NOMs (Norma Oficial Mexicana). All standards are classified based on the Harmonized System Code (HS).
There are few Mexican standards for medical devices, but various agencies are preparing more standards to be issued in the near future. Updated information on NOMs and other sanitary processes can be found on the web page of the COFEPRIS, the Mexican Agency in charge or registering and approving medical devices: https://www.gob.mx/cofepris/
Challenges remain for many U.S. companies in achieving formulary listings for the many health coverage providers in Mexico. There are also limitations on U.S. companies competing with domestic manufacturers in public hospital tenders, thus giving preference to domestic Mexican products. For instance, Mexico introduced a limitation in 2008 which applies to Free Trade Agreement value-added content requirements, as a condition for non-Mexican-based manufacturers to participate in bids. In recent years, some companies have been able to side-step this requirement by working with local suppliers who provide the equipment in tandem with local services to which these same content requirements are not applied. COFEPRIS has sped up its drug approval process in recent years through fast track procedures for products already approved in jurisdictions such as the United States. However, pharmaceutical companies complain about intellectual property uncertainty, partly due to shortcomings in IP protection of drug patents, partly due to timings in the patent and renewal process that can enable generic producers to develop a competing drug, and partly due to weak interdiction of counterfeit drugs. Of particular concern to biologics producers is that patent data protections do not explicitly recognize biologics. The process for seeking injunctions and damages in patent disputes also remains onerous and difficult for innovative companies in Mexico.
Mexico gives preference to participation in public tenders covered by Free Trade Agreements (FTAs) to Mexican bidders and foreign bidders from countries with which Mexico has an FTA. In order to take advantage of this market access, some Mexican procuring entities require that suppliers provide a declaration either that their goods qualify as originating in Mexico or from a country with which Mexico has an FTA, according to the rules of origin of the FTA. At least one U.S. company found it challenging to meet this requirement because of its global sourcing.
However, this resulted in a benefit for companies that comply with the 51% of U.S. origin required to get the NAFTA certificate of origin. Thanks in part to this Mexican policy, 78% of the medical devices imported into Mexico in 2016 were of U.S. origin.
Procurement & Tenders
The Mexican federal government uses an online procurement information management tool called CompraNet (https://compranet.funcionpublica.gob.mx/web/login.html), similar to the United States FedBizOpps system. CompraNet is a repository for all official tender information and documents by all bidders, and is managed with oversight by Mexico’s Secretariat of Public Administration (Secretaría de la Función Pública, or SFP).
U.S. firms are encouraged to carefully analyze tender specifications. They may differ from entity to entity and vary based on the value of the purchase, type of goods or services, budget limitations, regulatory requirements, and other concerns. A bid will be disqualified if not received within the specified period of time. Stipulated bids can also be disqualified for not meeting technical details, even items as small as a discrepancy in a comma between a bidder’s corporate name and its certifications. Likewise, each tender includes a specific period of time for participants to ask questions. By paying attention to all the details, firms can avoid unnecessary disqualifications during the tender process. In some tenders, only written questions are permitted. Replies are given to all purchasers of the tender documents.
If a tender specifies a certain brand or gives preference to a supplier, a complaint can be filed with the Directorate-General of Complaints (Dirección General de Quejas) at the procuring agency before the contract is awarded. Each bid should only consider the exact specifications listed in the tender. "Additional solutions" and/or specifications not listed will disqualify the bid.
Finally, U.S. firms should communicate regularly with their Mexican representative and fine-tune all details related to the required documents. There have been numerous cases of disqualification based upon seemingly insignificant failures on the part of bidders to comply with tender regulations and procedures to the letter of the law.
The most relevant medical events in Mexico are:
Expomed, June 5-8, 2018, Mexico City
AMIC Dental, November 15-19, 2017
May 2-6, 2018, Mexico City
Expo DICLAB (Clinical & scientific laboratory products)
September 26-27, 2018, Mexico City
There are also important events organized by medical academies and associations that could be excellent for companies offering high technology medical devices, as they are focused on very specialized niche sub-sectors.
For public institutions
For private hospitals
U.S. Commercial Service Contact Information
Name: Alicia Herrera
Position: Senior Commercial Specialist
Phone: (011-52-55) 5080-2000 ext. 5215
Available Market Research
Healthcare spending (including investment) 2015
... as percent of GDP
Hospitals, Procedures, Healthcare Professionals
Number of hospitals 2016
Number of hospital beds 2016
Public 85,562 Private 33,879
Number of surgical procedures 2016
Public 3,361,000 Private 931,000
...of which [top procedure]
...of which [second highest procedure]
Public 216,927 Private 82,018
Life expectancy men/women
28.7 per every 100,000 under 5 years old
Percent of population older than 65 in 2015
14.8 % older than 60 years
Annual deaths 2014
...caused by [Heart diseases highest disease burden]
...caused by [ Diabetes second highest]
Prevalence of [Diabetes and cancer fastest growing disease burden]
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