Current Market Trends
Procurement & Tenders
Population: 4.18 Million
Panama continues to offer strong opportunities for healthcare service companies. It enjoys the highest per capita income in Central America and has a relatively well-developed healthcare sector. In 2018, the medical equipment market is estimated to reach $151 million, with U.S. equipment holding a 51% market share. The public sector is the primary end-user of medical equipment in health facilities run by the Social Security Fund (Caja del Seguro Social - CSS) and by the Ministry of Health. The private sector is also experiencing strong growth and has state-of-the-art medical facilities. Panama has a long-term goal of increasing medical tourism, and several private hospitals are affiliated with U.S. hospitals, such as Johns Hopkins.
New investment in hospitals and clinics countrywide will drive demand for medical equipment, and the sector is expected to grow at a rate of 6% over the next three years. Growth will be fueled by the construction of new public hospitals and replacement of older equipment in existing private and public health facilities. Private health centers are also upgrading their equipment in an effort to promote medical tourism.
Given that there is no local production of medical equipment, the market relies entirely on imports, most of which are imported from the U.S. Due to its high quality, reliability, and familiarity, U.S. medical equipment enjoys a strong reputation among Panamanian medical personnel. Furthermore, Panamanian medical equipment distributors representing U.S. brands tend to have well-trained staff and offer strong technical support.
Medical equipment imports covered in this report fall under Harmonized Tariff System Code (HS) 90, specifically those related to medical or surgical instruments and apparatus.
The medical equipment market in Panama continues to be strong, a result of an increased demand by the public sector and spurred on by new hospital and clinic projects and an increased number of employees registered in the national social security system. The Panamanian economy has continued to grow, and unemployment has reached historically low levels. Government spending represents more than 60% of the national market for medical equipment.
Private hospitals, while not demonstrating the same growth levels, have maintained stable demand, as they regularly renew equipment and facilities to remain competitive in a dynamic market. Many Panamanian doctors have been trained in the U.S. and are very familiar with U.S. equipment and medical practices. Most large, private hospitals are affiliated with U.S. hospitals and health organizations. However, competition from Europe and Asia has increased as those countries have implemented aggressive financing and marketing practices.
The Ministry of Health is expected to continue developing a strong program of hospital and clinic construction projects, which began during the previous administration. Panama’s Caja de Seguro Social (Social Security Fund) is expected to continue building a new metropolitan medical facility in Panama City (Ciudad Hospitalaria), a contentious project that was undertaken by the previous administration. Additionally, the University of Panama announced the construction of a new facility for medical training. All of these projects will have a significant impact on the demand for medical equipment.
Total Market Size
Total Local Production
Imports from the U.S.
Note: The above statistics are unofficial estimates
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Until June 2019 Medical devices in Panama were subject to inspection and compliance under the Health Research and Technological Development Department and the Medical Devices Regulation and Monitoring Section of the Ministry of Health, with no significant restrictions on the importation or marketing of medical equipment. The best market entry strategy is to find a reliable and qualified local distributor or representative.
However, a new law (Ley 90) issued in 2017, along with a Decree issued in April 2019, set June 2019 as the date for mandatory product registration for all medical devices. Although the new requirements will be not significantly different from the current ones, there are some concerns regarding the short time provided to be compliant with the new regulations. The recently appointed Minister of Health has stated that her priority will be to provide a six-month extension for the importers and distributors to have enough time to comply with the new regulation.
Product reliability and reputation and after-sales service are two important factors considered by end users when making purchasing decisions. However, pricing is more decisive in government procurement.
Medical practice is reserved to Panamanian citizens, except in those cases when there is shortage of local doctors in certain specializations. Leading doctors in Panama normally belong to professional associations in the U.S., and to local associations in their respective specialties.
Regarding medical equipment, the public sector requires certification of equipment which is done by the Ministry of Health and the Social Security organization. The private sector has no restrictions regarding procurement of medical equipment.
U.S. equipment is very price competitive, due in part to lower freight costs. Another advantage is that U.S. companies often provide 30 to 60 days open account credit terms to well-established distributors in Panama, while competitors from Europe and Asia usually require cash in advance or irrevocable letter of credit.
The local market is highly competitive. There are over 50 companies representing and distributing medical equipment with highly-trained sales staff. Sales promotion is done through trade shows and medical conferences, as well as by direct visits to clinics, hospitals, and individual physicians.
Panamanian medical distributors and end-users frequently attend U.S. medical trade shows and regularly participate in training programs offered by manufacturers.
The U.S. dollar is legal tender in Panama. The country has a well-developed international banking center, with over 100 banks available to provide commercial financing. Payment options vary from open account to prepayment. Letters of credit are often used to finance medical equipment imports and offering credit terms to buyers may give U.S. exporters a competitive edge.
Our report on export finance provides information on how to offset the risk of offering terms with export credit insurance: http://export.gov/panama/financingexporttopanama/index.asp.
Reputable health centers work with 30- to 90-day payment terms. Government payments may take from 60 to 180 days.
The U.S. is the prime supplier of medical equipment, supplies, and related products to Panama. It is also the main supplier of healthcare services.
Services provided by U.S. suppliers include medical treatment in U.S. hospitals, training for Panamanian doctors in the U.S., technical training for use of U.S. equipment, and consulting services for the public sector.
Estimates indicate that Panamanians spend about $6-8 million annually on medical services in the U.S.
Panama is in an early stage to become a “medical tourism destination.” The government has plans to implement programs to promote Panama as a medical destination for foreigners, but so far there have been no concrete actions.
Spain has been active in the medical services sector. In the past, several Spanish companies have participated in bids for hospital construction and administration, as well as procurement of medical equipment. Due to availability of export credits from the Spanish government, these companies have been able to secure several projects for hospital construction and to sell substantial amounts of equipment, both in Panama City and the interior of the country.
Colombia is another competitor, especially for ophthalmologic treatment. Colombia has the potential to become a major competitor in other medical areas because it offers excellent medical facilities at reasonable prices.
French companies were involved in the past in hospital design and equipment but have been less active recently.
The Ministry of Health and the Caja del Seguro Social (CSS - Social Security Fund), have been traditional users of imported healthcare services, medical equipment, and consulting services. Most of these services have been financed by multilateral development organizations.
The Caja del Seguro Social is always modernizing its services to make them more efficient and cost-effective. Affiliation with the Social Security System is mandatory for all Panamanian workers. There are approximately 670,000 workers affiliated with the CSS and a total of three million individuals covered by the CSS health system. This amounts to almost 75% of the country’s total population of 4.18 million.
The Ministry of Health is implementing a new model of hospital management by which groups of private individuals or boards (patronatos) are responsible for the administration of hospital services and resources.
Panama’s medical equipment market is estimated to grow by at least 6% over the next three years. In 2018, there were 61 hospitals (including second- and third-level public hospitals and excluding private hospitals with less than 30 beds): 48 public and 13 private, with a total of 9,630 beds 11% in private hospitals). The largest facilities are located in the Panama City metropolitan area, which covers close to 50% of the country’s population.
The above-mentioned Law 90 of 2017 and the Decree of April 2019 provides that the country’s Health Authority will regulate and certify equipment and supplies used throughout the public healthcare system.
For detailed information, please refer to both decrees, available in Spanish, on the following websites: www.minsa.gob.pa or www.css.gob.pa. There are currently two organizations issuing technical criteria reports: The Ministry of Health and the Social Security Fund. Their contact information is provided at the end of this report.
A draft to replace the country’s Health Code of 1947 is also under discussion and it remains to be seen what new requirements will result once the new code takes effect. A draft bill to promote medical tourism is under consideration by the National Assembly.
It is critical for U.S. medical equipment exporters to make a thorough review of these regulations by technical and legal staff fluent in Spanish. Otherwise, it may be worthwhile to partner with a local representative to see if your products meet the country’s procurement standards and requirements. There have been allegations by U.S. medical equipment providers that such resolutions have been applied to curtail open competition (e.g., specifications favoring a determined supplier).
Panama has a strong health insurance sector and private sector employees depend largely on employers’ sponsored health programs, which are cost-based.
For the public sector, the Social Security System and the Ministry of Health operate their own hospitals and healthcare facilities. There is obligatory affiliation for all workers to the Social Security System. The population not covered by private insurance or the National Social Security System is served by the hospitals and clinics of the Ministry of Health.
Sometimes, because of excessive demand, government hospitals contract health services with private sector hospitals which are reimbursed actual costs incurred.
Panama is considered to have one of the most open economies in the region. While foreign companies will find a friendly business environment in Panama, with no significant restrictions or barriers to doing business, including health products or services, U.S. companies have raised concerns with overly burdensome bureaucratic obstacles, and less-than-transparent processes.
Government tenders are posted in the procurement official website: http://www.panamacompra.gob.pa/portal/PortalPanama.aspx
The best sales prospects for the next three years are:
Ministry of Health: http://minsa.gob.pa
Caja de Seguro Social: http://css.gob.pa
American Chamber of Commerce in Panama: http://www.panamcham.com
Panama Chamber of Commerce: http://www.panacamara.com/
Expocomer (Commercial Trade Show): http://www.expocomer.com
Expomedica (Commercial Trade Show): http://www.expomedica.org/en
Institution: Caja de Seguro Social (CSS) (Social Security Fund)
Contact: Julio Garcia Valarini, General Director (until September 2019)
Tel: (507) 513-1065
Fax: (507) 503-2112
Web Site: www.css.gob.pa
Institution: Ministerio de Salud (MINSA) (Ministry of Health)
Contact: Dra. Rosario Turner, Minister of Health
Address: Ancon, Panama
Tel: (507) 512-9201
Fax: (507) 512-9382
Web Site: www.minsa.gob.pa
…as percent of GDP
3.7% of GDP (2019)
Hospital, Procedures, Healthcare Professionals
Number of Hospitals
Number of Hospital Beds
…of which in specialized clinics and rehabilitation centers
Life expectancy men/women
Male: 75.5 years
Female: 81.5 years (2019 est.)
Total: 14.3 deaths/1,000 live births
Male: 15.5 deaths/1,000 live births
Female: 13.0 deaths/1,000 live births (2019 est.)
Percent of population older than 65
5.0 deaths/1,000 population
U.S. Commercial Service Contact Information
Name: Diana Lozano
Position: Commercial Specialist
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