Mexico - Country Commercial Guide
Healthcare Products & Services

This is a best prospect industry sector for this country.  Includes a market overview and trade data.

Last published date: 2021-09-02

The Mexican healthcare sector has, in the past, represented an important market for all types of products and services. As of mid-2021, the sector remains large, but due to a variety of considerations can no longer be considered a top prospect market for new-to-market companies. The public health market is undergoing a broad series of changes in the procurement system and distribution structure, and the current value of the peso harms price competitiveness of U.S. products. In addition, evolving rules governing international shipments of products related to COVID-19 pandemic response and a consolidated procurement process of medicines and medical devices led by the United Nations Office for Project Services (UNOPS) have created uncertainty for export approval and market entry.

Overview

There are three different sub-sectors in Mexico’s healthcare sector: medical devices and supplies, healthcare services, and pharmaceutical/bio-pharma. Overall, the import market for medical devices and supplies reached USD 5.9 billion in 2020, and the pharmaceutical import market was USD 4.9 billion in 2020. Neither of these estimates includes the import value for healthcare services.

However, the entire sector is facing ongoing challenges. In recent years, demand for imported medical devices increased. However, due to administrative changes at the Federal Commission for Protection against Sanitary Risks (Comisón Federal para la Protección contra Riesgos Sanitarios or COFEPRIS) there have been significant delays for registering and importing new products into the market. To reduce delays, COFEPRIS adopted a “reliance” strategy that approves the use of other country regulatory agencies health registers to fast-track imports procedures. Similarly, the services and pharmaceutical sub-sectors represented markets with a large U.S. presence. Under the López Obrador Administration, suppliers for all health sector products and services continue to grapple 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. At the same time, the public health system, which underwent a contraction under government austerity plans, will be further impacted by the lasting implications of the COVID-19 pandemic for the Mexican economy and public health budgets. Priorities due to the COVID-19 pandemic have shifted in the country. COVID-19 related treatments and pharmaceuticals with public health impact are now the main priorities. Also, the medical insurance sector will be burdened with increased claims for an unknown period into the future. We strongly recommend any new entrants into the market contact the U.S. Commercial Service Mexico for updated guidance.

Mexico’s Healthcare System and Trends

Mexico has an employment-based healthcare system. Those employed by the private sector (around 20 million workers) are served by the Mexican Institute of Social Security (Instituto Mexicano del Seguro Social or IMMS). Government employees (around 3 million workers) are served by Institute of Social Security for Public Employees (Instituto de Seguridad Social de los Trabajadores del Estado or ISSTE). While the unemployed and informal workers (approximately 31 million people) were served by a program called Popular Insurance under the Secretariat of Health (Secretaría de Salud or SSA). Under the López Obrador Administration this last program was replaced by the Institute of Health for Welfare (Instituto de Salud para el Bienestar or INSABI). While there are a number of private hospitals in Mexico, only five percent of Mexicans have private health insurance. Individual Mexican states also provide independent healthcare services, and the Mexican Armed Forces have their own independent healthcare system.

Prior to the COVID-19 pandemic, the López Obrador Administration sought to combine the three federal level systems into a single national system for all families regardless of employment status and pushed forward staffing reductions throughout the public health system. At the same time, the President made significant changes to the procurement system to reduce alleged widespread corruption and to force reductions in the cost of drugs, devices, supplies, and services. Nevertheless, such changes have generated severe distribution issues leading to medical supply and pharmaceutical shortages for some communicable and non-communicable diseases.

Mexico spent between 2.5 and 2.9 percent of its GDP on health from 2010 to 2021, as compared to an average of 8.9 percent among Organization for Economic Cooperation and Development (OECD) countries. Health sector funding and quality of care have been ongoing concerns and fully exposed during the COVID-19 pandemic. 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. This includes the overlap between the two systems and includes the 32 million people with private medical and accident insurance. In 2019 Mexico had 22,831 public health care units, including 4,629 hospitals, of which 194 were highly specialized medical centers, and 3,114 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 José, Centro Médico ABC, Hospital Español, Amerimed Hospitales, Hospitales San Angel Inn, Grupo Christus Muguerza, and Médica Sur.

According to the Mexican National Institute of Statistics and Geography (Instituto Nacional de Estadística y Geografía or INEGI), from January to August 2020, Mexico´s main premature death causes were, heart disease (26%), COVID-19, (20%), diabetes (18%), malignant tumors (11%), influenza and pneumonia, liver disease, cerebrovascular disease (5%), homicides and accidents (4%), and pulmonary disease (3%). Both the OECD and World Health Organization (WHO) maintain a wide range of health indicators for Mexico and other countries that may be useful for U.S. companies assessing this sector.

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 exists for patients with private insurance coverage. There is not a general reimbursement policy for all insurance companies. Each company determines prices and reimbursement according to its own policies.

Previously, all purchasing for government healthcare drew from two annually updated official government supply and pricing lists called the Basic Formulary (Cuadro Básico) and the Catalog of Medicines (Catálogo de Medicamentos). SSA recently announced the replacement of these two lists with a single one called National Health Supplies Compendium (Compendio Nacional de Insumos para la Salud). Also, the Secretariat of Finance (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. There is also a tendency to use direct awards to a selected group of suppliers. During the last year, approximately 80 percent of purchases have been done through direct award mechanisms. The government’s low-price guidelines and general price sensitivity in the market can create 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 benefited U.S. suppliers under NAFTA, and the new United States–Mexico–Canada Agreement (USMCA) provides additional benefits. However, it is unclear how the Mexican Government will adapt its health sector changes to its trade treaty obligations. The USMCA entered into force on July 1, 2020. With respect to the healthcare sector, the agreement contains significant improvements and modernized approaches to rules of origin and intellectual property issues. For more information, please visit the Office of United States Trade Representative website (www.ustr.gov) and the International Trade Administration’s USMCA landing page (www.trade.gov/usmca).

On July 31, 2020, the Government of Mexico signed an agreement with UNOPS, whereby the latter will directly purchase medications on behalf of Mexican health institutions. On December 4, 2021, as part of the UNOPS agreement, a tender was announced for medicines to be acquired by the GOM. This measure is aligned with López Obrador’s battle against corruption, austerity, and better management of public resources. INSABI will manage the ‘real demand’ for medications and make requests to UNOPS. Industry has reported that there is no clear methodology or mechanisms to ensure government accountability for procurement through international organizations, and that no specifications are included on how market research would be conducted to determine whether it would be appropriate and efficient to purchase medications through international organizations. Another issue raised by industry is the speed and lack of transparency concerning how the awards were granted.

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 country—whether a device, instrument, or pharmaceutical—a sanitary registration issued by COFEPRIS is mandatory. COFEPRIS recently underwent major restructuring due to alleged corruption concerns. In February 2021, a new Commissioner of COFEPRIS was appointed and has begun efforts to address the backlog of registration and import permits. Part of COFEPRIS’ transformation strategy includes plans to digitalize their procedures and go paperless by the end of 2021 to shorten their response times. COFEPRIS has attempted to accelerate their registration process allowing pharmaceutical companies to present FDA authorization to fast-track approval.

The Mexican regulatory framework for the medical and pharmaceutical sectors includes the following 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 NOMs, medical devices, as well as pharmaceutical products, 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). Under the USMCA, COFEPRIS has established an equivalence procedure. This allows for market authorizers to streamline product approvals for devices and pharmaceuticals containing active ingredients that have not been commercialized before in Mexico. Industry sources have indicated that this process has not been as fast as expected. While the USMCA states that the equivalence determination should take between five and six working days, in reality the process is taking between five and seven months. For the registration of generic drugs, there is a requirement to conduct the corresponding bioequiv
  • 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. Products qualifying as North American under USMCA require a minimum set of nine data elements be submitted to prove origin and receive USMCA beneficial treatment. This certification may be issued by the importer, exporter or producer and does not have to be validated or formalized. Contact the U.S. Commercial Service Mexico for a sample of the required data. Only North American products, as defined by the rules of origin, are eligible for preferential tariff treatment. For information on certification of origin and to ensure to qualify for USMCA preferential treatment, visit U.S. Customs and Border Protection USMCA Center.

Leading Sub-Sectors

As noted above, the entire healthcare sector is facing a number of ongoing challenges. All these elements have contributed to a decrease of the market size as the following figures show.

Medical Devices, Equipment, and Instruments

Medical Device and Equipment Market Size in Mexico
(Figures in USD billions)

 

2018

2019

2020

2021(Estimated)*

Total Local Production

16.97

15.27

16.80

15.12

Total Exports

13.36

14.85

5.93

6.41

Total Imports

8.62

10.17

7.13

7.70

Imports from the U.S.

3.81

4.23

1.74

1.88

Total Market Size

12.23

10.59

18.00

16.41

Exchange Rates

19.23

19.26

20.00

21.00

*Estimated based on market trends and economic forecasts. Please note these estimations could be severely impacted by the COVID-19 pandemic.
Source: Secretariat of Economy’s Tariff Information System via Internet (SIAVI).

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 7.13 billion in 2020, which represented a 30 percent decrease from 2019. However, the U.S. share remained 24 percent of the import total. The change in public policies regarding investing in new equipment for hospitals and the change in the procurement systems directly impacted the volume of products purchased for public healthcare institutions.

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. According to Mexico’s Ministry of Economy (Secretaría de Economía or SE), the states with the highest numbers of international imports of instruments and appliances used in medical sciences were Baja California (USD 401 million), Tamaulipas (USD 305 million), Mexico City (USD 196 million), Jalisco (USD 92.2 million), and Nuevo León (USD 71.2 million).

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.

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. There have also been an increasing number of 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 outsource 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 have been able to avoid big capital investments in plant and equipment, materials, pharmaceuticals, and instruments, while gaining access to some of the most modern specialized surgical procedures.

Pharmaceuticals

Mexico is the 11th-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 over the counter products with the remaining 14 percent. COFEPRIS reports that generics represent more than 80 percent of the market in terms of volume. Following the same trend as medical devices, the decrease of pharmaceutical imports from Mexico is directly related to changes in the procurement process, increased market participation of generics and low-cost providers, uncertain product approval and registration timings, continued issues in intellectual property protection, and low value of the peso against the U.S. dollar. From 2019 to 2021, several public health institutions faced shortages of medicines due to these issues.

The United States is still the largest foreign supplier of pharmaceutical products to the Mexican market. In 2019, the United States exported USD 828 million to Mexico, accounting for 33.6 percent share of the total import market. Imports from the United States declined 21 percent compared to 2018.

In 2020, the states with the highest imports of pharmaceutical products were Mexico City (USD 638 million), State of Mexico (USD 206 million), Jalisco (USD 176 million), Morelos (USD 105 million), and Tamaulipas (USD 56 million). Imports of pharmaceutical products originate primarily from the following countries: United States (including Puerto Rico) (USD 1.08 billion), Germany (USD 796 million), France (USD 468 million), and Switzerland (USD 270 million).

Pharmaceutical Products Market in Mexico
(Figures in USD billions)

 

2018

2019

2020

2021(estimated)

Pharmaceuticals Sales*

10.03

10.80

11.10

11.00

Total Exports

1.53

1.52

1.45

1.52

Total Imports

4.64

4.80

4.98

5.24

Imports from the US

0.97

1.05

0.83

0.87

Total Market Size*

N/A

N/A

N/A

N/A

Exchange Rates

19.22

19.26

20.00

21.00

*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 2019 exchange rates, and the figures approximate the total market size.
Source: Secretariat of Economy

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

The Government of Mexico has expressed significant interest in expanding policies to promote generic pharmaceuticals in Mexico. This could reduce the long-term market size for original and brand-name medications in the country. Please contact the U.S. Commercial Service Mexico for updated information.

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 León. 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 in Mexico is happy to assist you in exploring healthcare market opportunities. The Mexican market currently faces a number of significant uncertainties and challenges for public sector purchasing. The COVID-19 pandemic represents an opportunity for medical devices and supplies to treat patients and protect healthcare workers. Private and public health facilities seek new technologies and pharmaceuticals to continue combating the pandemic. Please contact us for more information on specific opportunities in the sector.

Resources

Public Institutions

  • Secretariat of Health (SSA)     
  • Federal Commission for the Protection Against Sanitary Risks (COFEPRIS)      
  • Mexican Institute of Social Security (IMSS) 
  • Institute of Social Security and Services for Public Employees (ISSSTE)            
  • National Center for Health Technology Excellence (CENETEC)

Private Hospital Chains

  • Hospital San Angel Inn            
  • Centro Medico ABC    
  • Medica Sur     
  • Grupo Angeles
  • Hospitales Star Medica           
  • Christus Muguerza     
  • Beneficencia Española            
  • Amerimed Hospitals  

Private Institutions

  • Mexican Association of Medical Device Innovation Industries (AMID)
  • National Chamber of the Pharmaceutical Industry (CANIFARMA) 
  • Mexican Association of Pharmaceutical Research Industries (AMIIF)            
  • National Association of Drug Manufacturers (ANAFAM)      
  • Mexican Pharmaceutical Association (AFMAC)

Events

  • Expo Med, September, Mexico City
  • Expo Materiales para Laboratorio,  Mexico City
  • Contacts

 

For more information on the healthcare sector in Mexico, please contact:

Paulo Camposeco

Commercial Specialist

U.S. Commercial Service—Mexico City

Tel.: +52 (55) 5080-2000

Tel.: +52 (55) 5537 27 7520

Paulo.Camposeco@trade.gov