This is a best prospect industry sector for this country.  Includes a market overview and trade data.
Last Published: 10/17/2019
The Mexican healthcare sector represents an important market for all types of products and services, though as of mid-2019 the public sector side of the market was undergoing a broad series of changes in the procurement system and structure of distribution with unclear ultimate outcomes. Overall, the import market for medical devices and supplies reached USD 5.7 billion in 2019, and the pharmaceutical import market was USD 4.6 billion in 2018. Neither of these estimates includes the import value for healthcare services. However, the entire sector is facing some challenges.

Overview

Mexico’s healthcare sector consists of three different sub-sectors: medical devices and supplies, healthcare services, and pharmaceutical/bio-pharma. In 2018, we listed medical devices as a top-prospect sub-sector. Demand for imported medical devices was increasing, and there were not significant barriers to introducing new products into the market. Similarly, the services and pharmaceutical sub-sectors represented markets with large U.S. presence. This year, with changes announced or envisioned by the López Obrador Administration, suppliers for all health sector products and services are grappling with significant changes in the procurement process, heightened receptivity to generics and low-cost providers, uncertain product approval and registration timings, and continued issues in intellectual property protection. We strongly recommend any new entrants into the market contact CS Mexico for updated guidance.


Mexico’s Healthcare System and Trends

Mexico operates a universal healthcare system that evolved through Federal Government actions in the mid-2000s and was fully enacted in 2012. The system is split between an extensive government-run healthcare network and private sector providers and insurers. The government network covers both the provision of care and pharmaceuticals. As of June 2019, the government-run system is further split between multiple public healthcare networks. One is a network for government employees and their families called the Institute of Social Security and Services for Public Employees (Instituto de Seguridad Social de Trabajadores del Estado or ISSSTE) covering some 13 million people. The Mexican Institute of Social Security (Instituto Mexicano de Seguridad Social or IMSS) covers the rest of the employed population and their families, roughly 60 million people. A system called Seguro Popular provides basic health insurance coverage for the remainder of the informally employed or unemployed population. Individual Mexican states also provide independent healthcare services and the Mexican Armed Forces have their own independent healthcare system.

The López Obrador Administration seeks to combine the three federal level systems into a single national system for all families regardless of employment status and has pushed forward staffing reductions through the public health system. At the same time, the President has made significant changes to the procurement system in an effort to reduce alleged widespread corruption and to force reductions in the cost of drugs, devices, supplies, and services.

In the prior administration, Mexico dedicated 4.2 percent of its GDP to the health care sector. Due to the various proposed changes of the current administration, the budget for the medical sector is uncertain. In all, public healthcare institutions account for 70–80 percent of all medical services provided nationwide, while private healthcare institutions serve approximately 25–30 percent of the Mexican population, which includes the overlaps between the two systems and includes the 32 million people with private medical and accident insurance. In 2014 (most recent data available), Mexico had 22,831 public health care units, including 1,386 hospitals, of which 194 were highly specialized medical centers, and 2,960 accredited private hospitals. Only about 100 private hospitals had more than 50 beds and the capacity to offer highly specialized services. Major private health provider groups include Grupo Empresarial Angeles, Star Medica, Hospital San Jose, Centro Medico ABC, Hospital Español, Amerimed Hospitales, Hospitales San Angel Inn, Grupo Christus Muguerza, and Medica Sur.

Mexico’s epidemiological profile has changed dramatically over the past 20 years. In the 1990s the main causes of premature death were communicable diseases such as diarrhea and respiratory infections or birth complications. However, in 2016, obesity and diabetes were declared epidemics, the first noncontagious diseases to be considered as such. Deaths associated with these diseases caused 17.4 percent of deaths in 2014, according to the Mexican National Institute of Statistics and Geography, INEGI. However, a quarter of deaths stem from a range of cardio-pulmonary diseases including ischemic and hypertensive heart disease, stroke, and chronic obstructive pulmonary disease. Obesity is the major risk factor for all the above, affecting seven in 10 Mexicans. Interpersonal violence is also a relatively high killer, accounting for 5.4 percent of deaths, or 32.7 deaths per thousand. Cirrhosis of the liver, kidney disease, and road injury round out the top 10 lists of killers, at 4.1 percent, 2.5 percent, and 2.3 percent of deaths, respectively. Both the Organization for Economic Cooperation and Development (OECD) and WHO (World Health Organization) maintain a wide range of health indicators for Mexico and other countries that may be useful for U.S. companies assessing this sector.

The growth of medical tourism is also significant in Mexico. While estimates vary, Patients Beyond Borders estimates that 200,000 to 1.1 million patients travel to Mexico yearly. Most are Hispanics living in the United States, but others are U.S. citizens seeking lower-cost healthcare options, and a smaller group of individuals from Canada and the United Kingdom seeking fast treatment options combined with a tourism destination. Healthcare partnerships also drive cross-border healthcare, including hospital affiliations with educational institutions, partnerships for specialized care, and franchise or network activity.


Market Access for Healthcare Products

Mexican public healthcare does not use a reimbursement system as 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 in their attention with no charge. Reimbursement only exits for patients with private insurance coverage. Patients pay for care and are later reimbursed. There is not a general reimbursement policy for all insurance companies. Each company determines prices and reimbursement according to its own policies. As noted above, the López Obrador Administration is reorganizing the public healthcare sector in a bid to improve nationwide access to healthcare services and medicines. In addition to the proposed consolidation of all public providers, there are some specific administrative changes already underway as of June 2019.

All purchasing for government healthcare has drawn from two annually updated official government supply and pricing lists called the Cuadro Básico (Basic Formulary) and the Catálogo de Medicamentos (Catalog of Medicines). The Secretariat of Health intends to replace these with a single list, though the process for establishing this list is still largely unclear.
The Secretariat of the Treasury (Secretaría de Hacienda y Crédito Público or SHCP) has taken steps to establish a centralized procurement system for all government purchasing of medical devices, supplies, medications, and services. Please see our Selling to the Government section for further information.

SHCP intends to use low-cost criteria for health sector purchases and has begun to issue tenders for devices and medications that would be open to suppliers from all countries without a rigorous process for screening quality or efficacy.

The food and health safety regulator, the Federal Commission for the Protection Against Sanitary Risk (Comisión Federal para la Protección contra Riesgos Sanitarios or COFEPRIS), has not been fully staffed or budgeted in the new administration, and changes to product approval, registration, and testing are unclear.
Aside from the uncertainty these changes pose, the government low-price guidelines and general price sensitivity in the market can cause pricing challenges for U.S. companies, particularly at the current value of the peso. This has increasingly driven purchases to lower-cost and often lower-quality producers.

Under current Mexican law, government purchasing rules provide preference to suppliers from countries with which Mexico has a free trade agreement. This benefits U.S. suppliers under NAFTA, and the new United States-Mexico-Canada Agreement provides additional benefits. However, it is unclear how the Mexican Government will adapt its health sector changes to its trade treaty obligations. For future developments on ratification and implementation of the U.S.–Mexico–Canada Agreement (USMCA), check the relevant pages at the Office of United States Trade Representative (www.ustr.gov).

In terms of regulatory approvals and market access, Mexico remains sovereign as to setting and maintaining its regulations. For anything applied to or entering the body—whether a device, instrument, or pharmaceutical—a sanitary registration is mandatory. The Mexican regulatory framework for the medical and pharmaceutical sectors includes norms and registration requirements:
  • Mexican Official Standards. Compliance with Mexican Official Standards (Normas Oficiales Mexicanas or NOMs) is mandatory for all products sold in the Mexican territory.
  • Sanitary Registration. In addition to Official Standards, medical devices as well as pharmaceutical products such as active ingredients, finished medicines in bulk, and finished medicines in retail packages, must be registered with COFEPRIS. Intellectual property protection is a separate process with a different government agency (see our Intellectual Property sections in this guide). COFEPRIS has been driving a process of unilateral recognition of market authorizations to streamline product approvals for devices and pharmaceuticals containing active ingredients that have not been commercialized before in Mexico and that are already approved by the U.S. Food and Drug Administration and the European Medicines Agency, among others. This process has made the process of importation faster and easier. If continued in the new administration, it should continue to benefit U.S. exporters and Mexican consumers of U.S. healthcare products. CS Mexico and U.S. industry representatives have provided ongoing input to COFEPRIS. FDA approval may speed-up the Mexican approval process, but it does not exempt a product from Mexican sanitary registration requirements. Products not yet approved by FDA or other recognized agencies will undergo the standard process. For the registration of generic drugs, it is important to note that drugs are not covered by this streamlined process, and that there is a requirement to conduct the corresponding bioequivalence studies in Mexico. Only in some cases, such as personal use or research, are products exempted from being registered.
  • Import Permit. Once the product has obtained a sanitary registration code, the importer must file an import permit application with COFEPRIS to have access to the Mexican territory. This process also applies to import of products for personal use or research exempted from sanitary registration.
  • Certificate of Origin. Until the United States–Mexico–Canada Agreement (USMCA) is fully implemented, products qualifying as North American under NAFTA must use the NAFTA Certificate of Origin to receive NAFTA beneficial treatment. This certificate may be issued by the exporter or freight forwarder and does not have to be validated or formalized. Only North American products, as defined by the rules of origin, are eligible for preferential tariff treatment. In general, 51 percent or more NAFTA content by value is required to get a NAFTA Certificate of Origin. For information on  the USMCA, and its impact on rules of origin, check the Fact Sheets and USMCA pages at the Office of United States Trade Representative (www.ustr.gov).
Some companies have experienced significant delays in receiving registration/marketing approvals from COFEPRIS, and this is compounded by the current uncertainty over COFEPRIS’ staffing and future role. In addition, foreign medical device manufacturers require a legally appointed distributor or representative in Mexico, responsible for the product and its registration process. It is highly recommended that U.S. companies ensure they carefully submit all documents the first time and exactly as requested to COFEPRIS, as small errors or omissions have resulted in long delays in some cases. When in doubt, contact CS Mexico for updates on the market.


Leading Sub-Sectors

Leading sub-sectors are split between medical devices, pharmaceutical industry products, and healthcare services. Right now, under the new government policies to select and purchase products, none of these sectors could be considered a best prospect, but there is still a significant market and opportunities for these sectors in Mexico.


Medical Devices, Equipment, and Instruments

The following table provides the most recent statistics for medical devices in Mexico.
Medical Device and Equipment Market Size in Mexico
(Figures in USD billions)
 2016201720182019 (Estimated)
Total Local Production13.714.815.515.8
Total Exports11.4311.613.213.3
Total Imports6.95.45.75.6
Imports from the U.S.5.43.63.93.9
Total Market Size*9.28.68.08.1
Exchange Rates18.6818.9119.2219.15
*Total market size = (total local production + imports) - exports
Source: Secretariat of Economy’s Tariff Information System via Internet (SIAVI) & ProMexico


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 5.7 billion in 2018 after dropping 22.7 percent from 2016 to 2017. However, the U.S. share remained about two-thirds of the import total. These spikes may be due not only to one-time purchases by the government healthcare system but also to construction of hospitals in both the public and private healthcare networks. U.S. suppliers sell a wide range of categories from dental instruments, hemodialysis, and electrocardiogram equipment to miscellaneous surgical and treatment items such as sutures, catheters, and syringes. 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 third countries.

Medical products from the United States 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.

Large public and private hospitals regularly seek out the most modern and highly-specialized medical devices. Some medium and small private hospitals with limited budgets buy used or refurbished equipment. By law, public hospitals cannot buy used or refurbished products.

To reduce medical device costs, public health care institutions are consolidating purchases for several institutions in one public tender. This forces suppliers to reduce prices to be more competitive. See also the Healthcare Services topic immediately below.

The 103 medical schools located nationwide represent an additional market. The most important are housed at the National Autonomous University of Mexico (UNAM), Universidad La Salle, the Popular University of Puebla, the National Polytechnics Institute (IPN), the University of Guadalajara, and the schools of the Army and the Navy.


Healthcare Services

In a drive to reduce costs and improve healthcare outcomes, there has been a trend towards outsourcing specialized procedures and care. For instance, most dialysis services in Mexico are provided by private sector companies under contract to public healthcare agencies. We have also seen increasing agreements with U.S. healthcare providers to deliver cardiac care, cancer treatment, and other specialized care either in Mexican facilities or for patients to travel to the United States. Many public and private hospitals are outsourcing surgical procedures to companies that offer integral surgery services or surgery centers. These services are delivered as “pay-per-event” and include all the necessary equipment and personnel required to perform a surgery. Thus, hospitals can avoid big capital investments in plant and equipment, materials, pharmaceuticals, and instruments, while gaining access to some of the most modern specialized surgical procedures.
However, in the government-run health network these trends may change under the new presidential administration. In an effort to crack down on perceived contract corruption, the López Obrador Administration is trying to reduce the presence of large private companies as suppliers to public healthcare institutions.


Pharmaceuticals

Mexico is the eleventh-largest market for pharmaceuticals in the world and the second in Latin America after Brazil. The pharmaceutical market in Mexico is divided into patented medicines, which represent 51 percent of the market by value, generics with 35 percent, and OTC products with the remaining 14 percent. COFEPRIS reports that generics represent more than 80 percent of the market in terms of volume.

Despite uncertainties about the future structure of the government-run portion of Mexico’s public health system and its purchasing of pharmaceuticals, most analysts remain bullish about long-term prospects. According to BMI Research, the value of Mexico's pharmaceutical market should have reached USD 10.4 billion in 2018 and will grow to USD 19.2 billion by 2027. Mexico’s pharmaceutical imports will remain important while demand for foreign specialized medicines increases. Mexico’s pharmaceutical industry is one of the most developed in Latin America, though it is still behind in terms of technology and innovation compared to the top pharmaceutical manufacturing countries. Through 2027, analysts expect pharmaceutical sales to grow at a compound annual growth rate of 6.2 percent, mostly driven by Mexico’s aging population and the increasing incidence of chronic diseases.

The United States is the largest foreign supplier of pharmaceutical products to the Mexican market. In 2018, the United States exported just over USD 1 billion to Mexico, accounting for 22.6 percent share of the total import market. Imports from the United States grew 7.8 percent compared to 2017.

Pharmaceutical Products Market in Mexico
(Figures in USD billions)
 2015201620172018
Pharmaceuticals Sales*9.3739.67510.02610.415e
Total Exports1.9581.5871.3581.540
Total Imports4.8044.1434.2424.649
Imports from the US1.083.904.9731.049
Total Market Size*N/AN/AN/AN/A
Exchange Rates15.8918.6818.9119.22
*Note that the total market size cannot be calculated, as a local production figure is not available. The pharmaceutical sales figures come from the local industry sources below. They are calculated at constant 2017 exchange rates, and the figures approximate the total market size.
Source: Global Trade Atlas, CANIFARMA, AFAMELA, AESGP, BMI


Approximately 400 laboratories manufacture pharmaceuticals in Mexico, and they are concentrated in the Mexico City metropolitan area, and the states of Jalisco, México, Puebla and Morelos. The Mexican pharmaceutical industry stands out because of the presence of 20 out of the 25 largest companies worldwide.

The pharmaceutical industry in Mexico is one of the most developed in Latin America, with significant local production of active ingredients and finished products. Earlier Mexican health regulations only allowed manufacturers to register to sell in Mexico if they produced the medication locally. When local and international manufacturers established themselves to sell products in Mexico, they made decisions about whether to source from their own Mexico-based manufacturing facility or to import. Over time, and particularly after the passage of NAFTA, local pharmaceutical production expanded dramatically even though importation became easier.

The USMCA has included protection for biologic drugs from generic competition for at least 10 years compared to the previous protection included in NAFTA, which offered eight years in Canada and five in Mexico. Additionally, once implemented, the USMCA will include language preventing generic copies of prescribed medicines to be sold for at least one decade.
Mexico is one of the most biodiverse countries in the world, with an extensive tradition of research in biological applications and life sciences. There are about 180 firms that develop and/or use modern biotechnology in Mexico. Many of these firms are international corporations that have biotechnology-related activities with important applications in the following sectors: human healthcare, agriculture, marine resources, energy production, and other areas. The sector benefits from government and private sector modernization and research and development programs involving research institutions and private industry.

There are four strategic life science regions identified in Mexico: Guanajuato, Jalisco, Morelos, and Nuevo Leon. Each boasts strong clinical research clusters, along with other clusters driven by foreign investment specifically oriented to pharmaceutical manufacturing. More recently, Baja California has developed industrial and academic potential in biotechnology. For instance, the city of Ensenada has cultivated R&D centers focusing on areas such as marine science and marine biotechnology, optics, applied physics, and agricultural biotechnology.

Mexico's pharmaceutical market growth will be driven in part by growth in biosimilars, for which sales are expected to surge in the coming years. Since June 2012, when Mexico published new guidelines for bio-comparable medicines, local R&D and production in the biosimilars sub-sector have significantly improved, and several multinational companies have announced investment and product launches.


Opportunities

The U.S. Commercial Service Mexico is happy to assist you in exploring healthcare market opportunities. Below are some highlights. Although the market faces a number of short-term uncertainties and challenges for public sector purchasing, in general we see demand in the following areas, including for private sector purchasing.


Devices and Equipment

Best prospects in the healthcare sector devices, equipment, and instruments include the following:
  • Anesthesia equipment
  • Defibrillators
  • Electrocardiographs
  • Electroencephalographs
  • Electro surgery equipment
  • Gamma ray equipment
  • Incubators
  • Surgical lasers
  • MRI equipment
  • Patient monitors
  • Respiratory therapy equipment
  • Suction pumps
  • Ultrasound equipment
  • X-ray equipment
There may also be niche opportunities for pharmaceutical production, testing, and quality assurance equipment and supplies. The establishment of research clusters in Mexico can generate demand for equipment and technology to support the increasing research and development of new pharmaceuticals and biotechnology products.
To successfully compete across the device and equipment space, key factors include quality, after-sales service, warranty, and price.


Pharmaceutical Industry and Healthcare Services

The best sales prospects for pharmaceutical industry products and healthcare services are more variable than for medical devices. Export of U.S. pharmaceuticals to Mexico is not a best prospect area due to the growth of domestic manufacturing in Mexico and the trends for biosimilars, even though the United States remains a major supplier.

However, pharma sector opportunities include products and services for the large and growing pharmaceutical production industry. This may extend to management of clinical trials for pharmaceuticals and biopharmaceuticals specially designed for the Latin and specifically the Mexican population.

As of June 2019, the López Obrador Administration has taken steps to centralize public sector pharmaceutical and drug purchases. The Government claims this is an effort to reduce escalating wholesale costs and perceived corruption that took in previous administrations, allegedly driven by the principal pharmaceutical distributors in Mexico. For further background and trends, please see the Selling to the Government section of this guide.

In healthcare services, the trends we outlined above in epidemiology, cost/quality initiatives, and medical tourism are generating demand for new treatment products and services, including niche opportunities for specialized medical service companies (notwithstanding the uncertainties in the public sector). Some opportunities may also exist for remote medicine, healthcare IT, and other technology-related offerings.


Web Resources


Public Institutions

Secretariat of Healthwww.salud.gob.mx
Federal Commission for the Protection Against Sanitary Risks (COFEPRIS)www.cofepris.gob.mx
Mexican Institute of Social Security (IMSS)www.imss.gob.mx
Institute of Social Security and Services
for Public Employees (ISSSTE)
www.issste.gob.mx
National Center for Health Technology Excellence (CENETEC)www.cenetec.salud.gob.mx


Private Hospital Chains

Hospital San Angel Innwww.hospitalsanangelinn.mx
Centro Medico ABCwww.abchospital.com
Medica Surwww.medicasur.com.mx/
Grupo Angeleswww.gass.com.mx/
Hospitales Star Medicawww.starmedica.com/
Christus Muguerzawww.christusmuguerza.com.mx/
Beneficencia Españolawww.beneficenciaespanola.com.mx/
Amerimed Hospitalswww.amerimedcancun.com/


Private Institutions

Mexican Association of Medical Device Innovation Industries (AMID)http://amid.org.mx
National Chamber of the Pharmaceutical Industry (CANIFARMA)www.canifarma.org.mx
Mexican Association of Pharmaceutical Research Industries (AMIIF)www.amiif.org.mx
National Association of Drug Manufacturers (ANAFAM)www.anafam.org.mx/
Mexican Pharmaceutical Association (AFMAC)http://afmac.org.mx


Events


Contacts

For more information on the healthcare sector in Mexico, please contact:
Alicia Herrera
Commercial Specialist, Healthcare Overall
U.S. Commercial Service—Mexico City
Tel.: +52 (55) 5080-2000 ext. 5215
Alicia.Herrera@trade.gov

Juan Carlos Ruíz
Commercial Specialist, Pharmaceutical, Nutraceuticals, and Bio-Pharma/Bio-Med
U.S. Commercial Service—Mexico City
Tel.: +52 (55) 5080-2000 ext. 5223
JuanCarlos.Ruiz@trade.gov
 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Mexico Healthcare Trade Development and Promotion