TRADE AMERICAS WEBINAR

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TRADE AMERICAS WEBINAR

• SELLING MEDICAL DEVICES IN MEXICO

Alicia Herrera U.S. Commercial Service Mexico
City July 14, 2009
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Overview of Mexico

• In 2008
• Population 106.7 million
• Estimated 125 million by 2025
• Population increase annual index 1.3
• Life expectancy 75.3 years
• Population age 29.4 between 0 and 14 years
  old 65.0 between 15 and 64 years old and 5.6
  over 65 years old.
• 27.9 of the population lives in towns with less
  than 15,000 inhabitants.

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Causes of Death 2007
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Mexican Market for Medical Devices

• Imports supply 90 percent of the Mexican market
  for medical equipment , instruments, and dental
  materials and about 20-30 percent of demand for
  medical disposables.
• In 2008, total imports in these four groups of
  products reached 3.1 billion dollars. From these
  imports 55.37 , or 1.7 billion dollars,
  were of U.S. origin.
• Under NAFTA, all medical devices of U.S. origin
  can be imported duty free into Mexico.
• 15 VAT tax over the invoice value is applied.

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Import market

• Imports of Medical Devices (U.S. million
  dollars)
• Group of products 2006
  2007 2008
• Medical instruments 890.741 1,258.319
  1,470.560
• Annual increase/decrease
  41.26 16.87
• Medical equipment 507.730
  491.324 561.548
• Annual increase/decrease
  (3.3 ) 14.29
• Medical disposables 657.045 713.162
  738.794
• Annual increase
  8.54 3.59
• Dental materials 323.049 385.260
  366.402
• Annual increase/decrease 19.30
  (4.9 )
• TOTAL IMPORTS MD 2,378.565
  2,848.065 3,137.304
• Annual increase
  11.97
  11.02

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Market share/Main competitors 2008 Imports of
Medical Equipment

• Country Million dollars
• United States 261.306 46.53
• Germany 78.330 13.95
• Japan 41.746 7.43
• China 30.291 6.36
• Netherlands 22.038 3.92
• Italy 18.373 3.27
• South Korea 18.248 3.25
• U.K. 10.093 1.80
• Canada 9.264 1.66
• Switzerland 9.004 1.60
• Israel 4.644 0.83
• Finland 1.966 0.35
• Others 50.820 9.05

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Market share/Main competitors 2008 Imports of
Medical Instruments

• Country Million dollars
• United States 690.080 46.93
• Japan 602.104 40.95
• Germany 49.417 3.36
• China 25.220 1.71
• Italy 21.874 1.48
• Taiwan 19.473 1.32
• Pakistan 11.993 0.81
• Denmark 5.526 0.38
• Israel 4.651 0.32
• Netherlands 0.727 0.05
• Others 39.525 2.69

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Market share/Main competitors 2008 Imports of
Medical Disposables

• Country Million dollars
• United States 529.439 71.66
• China 45.287 6.13
• Brazil 24.320 3.29
• Germany 19.723 2.67
• Japan 9.723 1.32
• Canada 8.212 1.11
• Taiwan 7.225 0.98
• France 7.090 0.96
• Colombia 6.729 0.91
• U.K. 5.621 0.76
• South Korea 5.108 0.69
• Italy 4.955 0.67
• Others 65.362 8.88

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Market share/Main competitors 2008 Imports of
Dental Materials

• Country Million dollars
• United States 256.258 70.00
• Singapore 18.684 5.10
• Japan 18.093 5.00
• Germany 15.080 4.10
• Brazil 13.643 3.70
• China 5.471 1.50
• Colombia 5.003 1.30
• Others 34.170 9.30

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Main clients/Public sector

• Public social security institutions (PSSI) that
  provide services to over 65 million patients in
  the country.
• Main PSSI are
• The Mexican Institute of Social Security (IMSS)
  provides services for private sector employees
  and currently has 50.7 million affiliated
  patients.
• The Institute of Social Security and Services for
  Public Employees (ISSSTE) currently has over 11.2
  million affiliated patients.

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Main clients/Public sector

• The medical services of PEMEX (Mexican Oil
  Company), the Army and the Navy together cover
  over 1.2 million patients.
• The states/local social security institutes serve
  over 1.5 million patients.
• The Popular Health Insurance Program started by
  Federal Government in 2001 currently serves over
  9 million patients. This program is for low
  income families not affiliated with other health
  care programs.

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Main clients/Public sector

• Together, public health care institutions in 2008
  accounted for
• 84,768 hospital beds 59,911 doctors offices
• 2,573 surgery rooms 1,185 X-ray cabinets
• 2,462 clinical labs 156,248 doctors
• 216,454 nurses 30,417 medical assistants
• Public institutions purchase through open public
  bids and award contracts to companies offering
  the products/services with the required technical
  specifications, at the best price.

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Main clients/Private sector

• In 2008
• 3,151private hospitals and clinics 95 have
  less than 50 beds.
• 35,553 hospital beds 13, 942 doctor
  offices
• 4,695 surgery rooms 1,776 X-ray
  cabinets
• 905 clinical laboratories 68,965
  doctors
• 40,502 nurses 2,685
  emergency rooms
• Private hospitals are estimated to provide
  services to about 25 million patients.
• Private hospitals purchase directly, by
  requesting quotations to several suppliers and
  selecting the best products/specifications
  according to their budget.

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Market trends 2009/ Public medical sector

• Due to the economic crisis, more patients are
  using public health care.
• Increased home care services for all kinds of
  patients.
• Use of mobile medical units to take health care
  services to small towns.
• Increasing use of telemedicine.
• Focus on preventive medicine.
• Promoting healthy habits like exercising, low fat
  diets, hygiene, weight control, annual check-ups
  and vaccines, to reduce the incidence of chronic
  diseases.
• Health care institutions are getting prepared for
  a new potential influenza outbreak in the near
  future.

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Market trends 2009/ Private medical sector

• Increased use of medical insurance and pre-paid
  programs.
• Increased use of home health care services.
• Offering more specialized services, like cancer
  prevention and treatment centers, weight control
  clinics, psychological attention, drug addiction
  treatment, and others.
• Most hospitals are expanding facilities, building
  hospitals in other cities, adding and
  diversifying services to increase the number of
  patients served.
• Health care chains are making agreements with
  large corporations to provide services to their
  employees.
• Some health care chains are opening facilities
  focused on lower cost treatment to attract new
  patients.

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Important projects 2009 Public sector

• The IMSS has important projects to improve
  efficiency and expand its capacity. In 2009 they
  are investing about US 600 million to build 11
  general hospitals in different Mexican cities and
  a new unit specializing in transplants. IMSS is
  also replacing about 800 imaging machines,
  purchasing more ambulances, and equipping
  specialized units for diabetes, cancer, HIV, and
  addiction treatment.
• IMSS is also equipping facilities for ambulatory
  surgery.

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Important projects 2009 Public sector

• The ISSSTE is currently building 3 high
  specialty hospitals, 9 general hospitals, 4
  clinics, 9 family treatment clinics and 4 small
  clinics for prevention and primary care.
• ISSSTE is also replacing equipment in existing
  hospitals and increasing the use of telemedicine
  and mobile units, in order to improve efficiency
  in its services.
• ISSSTE and IMSS are improving capacity to respond
  to future influenza outbreaks in Mexico.
• Most Mexican state governments are also investing
  in expanding health care facilities and
  increasing the coverage of services offered.

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Important projects 2009 Public sector

• The Secretariat of Health (SSA)is also investing
  in improving services and expanding capacity. At
  the same time it is implementing new programs of
  preventive medicine to prevent future pandemics
  and to reduce the incidence of chronic diseases.
• The SSA is approaching patients in small towns
  through periodical visits of mobile units
  equipped to perform check-ups, make quick
  diagnoses, and refer patients that need
  specialized care.
• Most public health care institutions are
  automating patient files, hospital
  administration, laboratory services and
  pharmacies.

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Important projects 2009 Private sector

• Several private groups are starting projects to
  build small hospitals and clinical laboratories
  throughout the country.
• Grupo Angeles has 14 hospitals and is building 6
  more to be opened during 2009-2010.
• Grupo Star Medica is building several hospitals
  in the border region , some more in other Mexican
  cities and an extensive network of clinical
  laboratories focused on low cost services.
• Medica Sur is finishing a new hospital in
  Tampico.
• Grupo Carso is planning to build 5 high specialty
  hospitals in Zacatecas.

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Important projects 2009 Private sector

• Grupo Cemain is expanding a hospital in Mexico
  City.
• Several groups are building specialized units for
  hemodialysis and ambulatory surgery.
• Other groups are building facilities for senior
  care, with medical units for primary care.
• Some groups are focusing on providing attention
  to retired foreigners living in Mexico, or coming
  to Mexico for medical treatment.
• All private group are looking to the future, and
  are looking for efficient technologies to reduce
  costs.  

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HOW TO DO BUSINESS IN MEXICO

• Legally appointed distributor.
• One or more distributors per company.
• All products must comply with technical
  standards.
• All products must have sanitary registration.
• Key factors to be competitive
• Quality -- Price
• Technical support -- Delivery time
• Financing -- Customer service

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Sanitary Registration

• COFEPRIS is the agency of the Secretariat of
  Health in charge of sanitary registrations.
• All medical devices need sanitary registration.
• U.S. products must have FDA approval for sale in
  the U.S.
• Foreign manufacturers must have a legally
  appointed distributor or a branch office that can
  take responsibility for the product.
• Only registered distributors can import
  registered medical devices.
• CE mark is only accepted for European products.

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Sanitary Registration

• Registration is valid for 5 years. All sanitary
  registrations over 5 years old will need to be
  renewed by the year 2010.
• Due date to request sanitary registration renewal
  is February 24, 2010.
• Registration is granted according to product
  classification Class I, II or III.
• Registration fees are reviewed every 6 months by
  COFEPRIS. As of July 14, 2009, registration fees
  are
• For Class I devices USD 613.00
• For Class II devices USD 899.00
• For Class III devices USD 1,144.00
• Exchange rate 13.00 Mexican pesos per U.S.
  dollar

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Sanitary registration

• In June 2009, COFEPRIS issued new guidelines for
  sanitary registration and criteria for product
  family grouping.
• Each product or product family requires
  individual registration.
• Only one registration per product or family of
  products.
• Companies with multiple distributors can give
  certified copies of the sanitary registration to
  each distributor importing products.
• Sanitary registration can be modified if
  companies change name, address, manufacturing
  plant, commercial name, and others.
• Sanitary registration can be legally transferred
  if necessary.

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COFEPRIS

• The USCS is working closely with COFEPRIS to help
  U.S. companies in expediting their sanitary
  registration processes.
• COFEPRIS has improved their website and now they
  have updated information including
• - standards - classification criteria
• - regulations - family grouping criteria
• - forms - approved registrations
• - fees - denied registrations
• - registrations in process - making appointments
  online
• COFEPRIS also has toll-free telephone
• 01-800-033-5050

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Standards/NOMs

• Over 45 technical standards or NOMs (Norma
  Oficial Mexicana) for medical devices.
• There is a labeling standard for medical devices.
• Several agencies are preparing more standards to
  be issued in the near future.
• Standards are determined based on the HS code
  used to export the product.
• Products that comply with standards in the U.S.,
  usually comply with Mexican NOMs.
• For more information on NOMs for medical devices,
  please visit www.cofepris.gob.mx

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Future Medical Events

• NATIONAL CONGRESS OF REPRODUCTIVE MEDICINE,
  Ixtapa, Zihuatanejo, July 15-18, 2009.
• XI CONGRESS OF THE MEXICAN SOCIETY OF ONCOLOGICAL
  UROLOGY, Acapulco, Guerrero, July 15-18, 2009.
• XXIX MEXICAN CONGRESS OF OPHTHALMOLOGY,
  Monterrey, Nuevo Leon, August 8-12, 2009.
• NATIONAL CONGRESS OF GENERAL SURGERY, Acapulco,
  Guerrero, November 1-6, 2009.
• XXXIV INTERNATIONAL CONGRESSS OF INTERNAL
  MEDICINE, Merida, Yucatan, November 15-18, 2009

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MEXICO GATEWAY TO LATIN AMERICA

• Many Mexican companies already export to other
  Latin American countries.
• Use the expertise, handle volumes.
• Ask for the advise of an International Trade
  Specialist
• You can choose 2-3 countries in which to
  establish distributors and handle the region
  from there.
• Mexico and Brazil are good countries to start
  doing business in Latin America.

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Trade Americas Program

• Trade Americas Program, designed to help you!
• Trade Americas Medical Team representatives in
  all Latin American countries.
• Regional market research.
• For more information on the Trade Americas
  Medical Team you can visit
• www.buyusa.gov/tradeamericas/11.html

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Interesting websites

• Government sites
• www.cofepris.gob.mx
• www.imss.gob.mx
• www.issste.gob.mx
• www.presidencia.gob.mx
• www.inegi.gob.mx
• If you are interested in obtaining English
  versions of Mexican regulations, you can visit
• www.mexicanlaws.com

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Contact Us

• Alicia Herrera
• Senior Commercial Specialist
• US Commercial Service - US Embassy Mexico
• Liverpool 31, Col. Juárez, 06600 México, D. F.
• Tel [phone]
• Fax [phone]
• E-mail alicia.herrera_at_mail.doc.gov