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: 2020-08-18

The Mexican healthcare sector has, in the past, represented an important market for all types of products and services. As of mid-2020, 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 structure of distribution, 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 response 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 4.9 billion in 2019, and the pharmaceutical import market was USD 2.5 billion in 2019. 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 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. 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. In addition, the peso has dropped to an historic low, hovering around 24 pesos to the dollar in June 2020. At the same time, the public health system, which underwent a contraction under government austerity plans, will be further impacted by the lasting COVID implications for the Mexican economy and public health budgets. The pressures of COVID-19 treatment have reduced priorities on treatment of other infectious and non-infectious disease, and 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 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 2020, 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 recently implemented system called INSABI (Instituto de Salud para el Bienestar) 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.

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.

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 José, Centro Médico ABC, Hospital Español, Amerimed Hospitales, Hospitales San Angel Inn, Grupo Christus Muguerza, and Médica 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 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.

The COVID-19 global pandemic has affected Mexico significantly. According to official figures, up to August 3, 2020, there were 443,813 confirmed cases and 48,012 deaths. Non–communicable diseases such as diabetes and hypertensive heart disease have affected negatively the number of deaths in Mexico caused by COVID-19. The former highlights the urgency for public policies to improve lifestyle habits and overall health of the Mexican population.

The growth of medical tourism has also been 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. The COVID-19 pandemic in Mexico will affect negatively medical tourism services due to the demand for medical facilities and resources to respond to the health emergency.

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.

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). The Secretariat of Health just announced the replacement of these two lists with a single one called National Health Supplies Compendium (Compendio Nacional de Insumos para la Salud).

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 involved ministries are also increasing the use of direct awards to a selected group of suppliers. During the last year, about 80 percent of purchases have been done through direct awards.

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 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, and with regards to the healthcare sector, the agreement contains significant improvements and modernized approaches to rules of origin and intellectual property issues. For more specifics on USMCA, please visit the Office of United States Trade Representative website (www.ustr.gov) and the International Trade Administration USMCA webpage.

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 had 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 not continued in the new administration. CS Mexico and U.S. industry representatives have provided ongoing input to COFEPRIS. For the registration of generic drugs, 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. The USMCA came into force on July 1, 2020. 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 CS 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.

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

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

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)

 

2017

2018

2019

2020(Estimated)**

Total Local Production

14.8

15.5

13.9

14.7

Total Exports

11.6

13.2

10.8

10.1

Total Imports

5.4

5.7

4.9

5.2

Imports from the U.S.

3.6

3.9

3.0

2.8

Total Market Size*

8.6

8.0

8.0

9.8

Exchange Rates

18.9

19.2

19.26

20.0

*Total market size = (total local production + imports) – exports
**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 4.9 billion in 2019, which represented a 14 percent decrease from 2018. However, the U.S. share remained about two-thirds, or 62.1 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 situation may be worsened by the predicted reduction in Mexico´s GNP by as much as 10–12 percent in 2020, with the resulting impact on government budgets and investment programs.

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 acquisitions for several institutions in one public tender. In 2019, about 80 percent of public purchases were made with directly awarded contracts. This forces suppliers to reduce prices to be more competitive. See also the Healthcare Services topic 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 was 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 were also 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 were outsourcing surgical procedures to companies that offer integral surgery services or surgery centers. These services were delivered as “pay-per-event” and include all the necessary equipment and personnel required to perform a surgery. Thus, hospitals were 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.

However, under the current López Obrador Administration such agreements could be cancelled or avoided in an effort to crack down on perceived contract corruption. This could mean a reduced 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. 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. In 2019, several public health institutions faced shortages of medicines due to these issues.

According to Pharma Boardroom Research, the value of Mexico's pharmaceutical market should have reached USD 11.1 billion in 2019 and could grow to USD 13.8 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 2.4 percent, mostly driven by Mexico’s aging population and the increasing incidence of chronic diseases. However, current administration public policies and issues in the registration process of new products could affect the entry of new-to-market players in the near future.

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.

Pharmaceutical Products Market in Mexico
(Figures in USD billions)

 

2016

2017

2018

2019

Pharmaceuticals Sales*

9.675

10.026

10.800

11.100

Total Exports

1.587

1.358

1.540

.896

Total Imports

4.143

4.242

4.649

2.466

Imports from the US

.904

.973

1.049

.828

Total Market Size*

N/A

N/A

N/A

N/A

Exchange Rates

18.68

18.91

19.22

19.26

*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: Global Trade Atlas, CANIFARMA, AFAMELA, AESGP, Fitch Solutions.

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 has a 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, local pharmaceutical production expanded dramatically even though importation became easier.

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 CS 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 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. Please contact the U.S. Commercial Service Mexico Sector Specialist for more information on specific opportunities in the sector.

Pharmaceutical Industry and Healthcare Services

The best sales prospects for pharmaceutical industry products and healthcare services are uncertain as different events and market conditions develop.

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. Nevertheless, the results of such policies have caused shortages of supplies in the public healthcare sector and a perception of lack of transparency within the private sector companies that sell to the government. For further background and trends, please see the Selling to the Government section of this guide.

In private 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.

The COVID-19 sanitary emergency may represent an opportunity of manufacturers of equipment to respond to the pandemic and new therapies to fight against the virus. Private and public health facilities will be looking for new technologies and pharmaceuticals to continue treating patients as long as a vaccine against this pathogen is released and distributed worldwide.

Web Resources

 

Public Institutions

Secretariat of Health

www.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 Inn

www.hospitalsanangelinn.mx

Centro Medico ABC

www.abchospital.com

Medica Sur

www.medicasur.com.mx/

Grupo Angeles

www.gass.com.mx/

Hospitales Star Medica

www.starmedica.com/

Christus Muguerza

www.christusmuguerza.com.mx/

Beneficencia Española

www.beneficenciaespanola.com.mx/

Amerimed Hospitals

www.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:

Marixell Garcia

Commercial Officer, Healthcare / SelectUSA

U.S. Commercial Service—Mexico City

Tel.: +52 (55) 5080-2000

Marixell.Garcia@trade.gov