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Executive Summary
Peru is the eighth most populous country in the Americas, with a population of 32 million inhabitants and an average life expectancy of 73.7 years. According to the World Bank, Peru’s annual health expenditures remain at an estimated 5.5% of GDP. Despite this, the national government’s healthcare budget has risen 16% in 2018 to approximately USD 5 million, remaining among the highest-priority sectors. Furthermore, the current administration of President Martin Vizcarra Cornejo has announced plans to address the infrastructure shortfall through further public-private partnerships (PPPs) in 2018 and 2019.
The Peruvian healthcare sector is comprised of five core decentralized entities; four public and one private, each with its own separate facilities. First, the Ministry of Health’s health insurance program, Seguro Integral de Salud, is the largest insurance provider covering 60% of the population. Second, the Ministry of Labor’s social security program, EsSalud, covers those in the formal economy, or 25% of the population. The remaining 10% of the population receives services from the Armed Forces, National Police, and the private sector.
Following the passage of the Universal Health Insurance Law of 2009 and the 2013 reform package, health indicators have shown a marked improvement in the country. Coverage has increased dramatically, with the percentage of Peruvians with some form of health insurance rising from 37% in 2004 to reach 83.2% as of 2017, according to the OECD. These improvements, along with additional expansions in health care infrastructure, lowering barriers to access, and modernizing public sector institutions, have laid the groundwork to achieve universal coverage, a goal the current administration hopes to achieve by 2021.
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Market Entry
Since the United States - Peru Trade Promotion Agreement (PTPA) came into force in 2009, most medical devices/equipment and pharmaceuticals enter Peru duty-free, provided a U.S. certificate of origin is presented to Peruvian customs. U.S. companies must register their products in Peru by partnering with a local distributor who has the ability to register through the Dirección General de Medicamentos, Drogas e Insumos (DIGEMID). Aside from obligatory registration, working with a local distributor is beneficial due to Peruvian preferences to buy locally from someone who can provide after-sales services. U.S. manufacturers should maintain close contact with end-users and provide training and demonstrations so that end-users can familiarize themselves with the equipment.
To succeed in the Peruvian market, U.S. firms should offer competitive pricing. Modern technology with strong, post-sales technical and parts support is well received. All marketing materials and product information should be provided in Spanish.
In addition, U.S. firms are encouraged to take advantage of trade missions to Peru in order to promote new products. Attending trade events relevant to the industry is another proven method to test the local market or promote new U.S. products.
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Current Market Trends
About 2.1 million people or 6.8% of the total population in Peru are 65 or older. There is a demand for quality elder care and treatment for cancer, cardiovascular diseases, and diabetes. In addition, the rising middle class in and around Lima has led to an increase in the urban population with higher expectations from their healthcare providers and who are willing to pay for it.
In stark contrast to the public system, the private health care sector has been particularly dynamic, having experienced significant growth in the past five years and buoyed by rising insurance penetration rates. The middle-class is increasingly turning to the private sector, and according to the latest statistics from SaSalud, the EPS system covered around 2.1 million Peruvians as of June 2016, up from 1.9 million in the same period in 2014. Pacifico Seguros was the market leader with 858,159 EPS customers, followed by Rimac (711,877), Mapfre (356,260), and La Positiva Sanitas (170,312). An additional 1.8 million Peruvians were covered by other forms of private insurance, including prepaid private clinic or hospital coverage, during the same period.
Improvements in health care provision and access are largely the result of increased public investment in the sector. The national budget allocated to the sector rose from $1.6 billion in 2008 to $5 billion in 2018. Between 2017 and 2018 alone, the government’s healthcare budget rose by 16%. Additionally, although concrete proposals have yet to be announced, President Vizcarra has indicated that the government intends to invest in further infrastructure projects, medical equipment, and the training of medical personnel.
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Best Prospects
The best prospects for U.S. medical equipment manufacturers include:
- Medical, surgical, and dental instruments
- Needles and catheters
- Artificial joints, parts and accessories
- Ophthalmic instruments, appliances, and parts
- X-ray apparatus
- Electro-diagnostic apparatus and parts
- Adhesive dressings
- Orthopedic or fracture appliances and parts
- Respiration apparatus
The Peruvian healthcare market is predicted to experience moderate growth in the next few years, driven by government programs to establish a “new care standard.” The USD 2.7 billion government medical reform package launched in 2013 is an opportunity for U.S. exporters to provide construction, equipment and training. We anticipate that the Peruvian government will continue investing in key healthcare programs.
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Main Competitors
Peru has limited manufacturing capacity and relies heavily on imports. The United States is the largest exporter of healthcare goods and services to Peru at 21.7% market share. China is not far behind at 18.1%, followed by Germany, Japan, South Korea, and Brazil. Local buyers view U.S. products as having higher quality and reliability than most competitors.
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Current Demand
One of the most important challenges facing the Peruvian health care system, which also presents a major bottleneck in their movement toward universal coverage, is the continued shortage of doctors and medical specialists. According to the Peruvian Medical Federation (Federacion Medica Peruana, FMP), public hospitals in the country require at least 18,000 more doctors, including an additional 15,000 medical specialists, in order to meet patient needs.
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Registration Process
In order to sell medical equipment and devices, a sanitary registry is required. The Ministry of Health through the Dirección General de Medicamentos, Drogas e Insumos (DIGEMID) is the healthcare authority that regulates the importation of medical equipment and devices. It is mandatory to name a local distributor or representative, since the registration will be issued to the Peruvian company. Public and private hospitals purchase new medical equipment, while used medical equipment is only permitted for individual physician purchase. For more information on product registration, please refer to DIGEMID’s website: http://www.digemid.minsa.gob.pe/.
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Barriers
Overall, Peru has the second smallest market in the Americas region. An inefficient and fragmented public health system poses a challenge to the growth of the sector in Peru. The private healthcare sector is small yet growing. Overall, Peru has low per capita health expenditure, and planned infrastructure projects are often delayed.
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Government & Association Links
Government Links:
Healthcare Procurement:
Government Health Plans:
Local Associations
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U.S. Commercial Service Contact Information
Name: Gustavo Romero Díaz
Position: Commercial Specialist
Email: gustavo.romero@trade.gov
Phone: +51 1 618 2671
