Mexican Medtech: A Well Oiled Machine?

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Mexico’s medical device segment displays promising growth indicators, with innovative companies providing integrated and digital solutions now firmly embedded within the healthcare landscape. However, regulatory obstacles as well as a lack of joined-up thinking in the public sector remain in place; potentially restricting the industry from realising its full potential.

“From 2010 to 2015 the medical device industry contributed 0.27 percent of [Mexican] GDP, reaching USD 40,335 million in 2015 (12.6 percent more than 2014).”

Maria Teresa Lopez, Zimmer Biomet

Immense Potential

The Mexican medical devices industry, by most yardsticks, holds immense potential. As María Teresa Lopez, managing director of the Mexican affiliate of Zimmer Biomet, the global leader in musculoskeletal healthcare, points out, Mexico is “the largest supplier of medical devices to the US. National sales of medical devices increased 20.5 percent from 2014 to 2015; in fact, according to INEGI, the medical device industry in Mexico employs 126,152 people and it generated more than 5,800 new jobs in 2015.

Furthermore, from 2010 to 2015 the medical device industry contributed 0.27 percent of GDP, reaching USD 40,335 million in 2015 (12.6 percent more than 2014).” For Zimmer Biomet in particular, Mexico represents an important growth opportunity due to its “aging population… increasing at a rapid rate, which in turn increases the prevalence of chronic conditions such as obesity, high blood glucose and arthritis – all of which contribute to the growing need for the variety of musculoskeletal interventions that Zimmer Biomet offers,” declares Lopez.

 

Regulatory Obstacles

However, despite these impressive numbers, the Mexican medtech market does face some obstacles that may restrict its growth. As the Mexican pharmaceutical regulatory authority Cofepris works to strengthen its position as the most advanced regulatory entity in the region, bringing its standards up to a par with those of the US FDA and EU EMA, issues can arise for medical device companies.

Enrique Carballido, general manager for Mexico and Latin America at Bio-Rad, a company whose innovative products are provided to 100,000 research, industry, and clinical laboratories worldwide, cautions that “such strengthened regulation makes it more difficult to bring innovative solutions to Mexico. This generates scenarios in which new technologies are first introduced in markets with less regulated frameworks, such as Chile, for example.” As well as limiting companies’ market access in Mexico, this scenario also reduces Mexican patients’ access to new, ground-breaking, or innovative technologies.

 

Integrated Services

Medtech companies that have thrived in Mexico have tended to be ones that have moved early to offer integrated services, rather than merely machines or equipment. Victor Casasola, CEO of homegrown lab equipment specialist Canitec, proudly proffers that “Canitec was the first company in Mexico to start offering an integral service jointly with the lab equipment… Such a concept already existed in developed markets such as the US and Europe but not in developing countries like Mexico.”

Casasola also explains how Canitec has partnered with the regulatory authorities, articulating that “Canitec has closely collaborated with Cofepris in order to implement [the integrated services] concept in Mexico and, as a consequence, we are positioned as the expert in our field. Both Cofepris and our clients rely on Canitec to provide top-notch equipment together with an integral service ensuring that our devices are correctly used and to their maximum potential.”

Gabriel Tagle, managing director at Salumedic, a provider of medical devices and services for hospitals, aligns closely with his Canitec counterpart, declaring that “It is imperative for the healthcare industry to transform into a service industry. Technology is futile without the proper service provision.”

Tagle sees Salumedic’s business model as potentially “revolutionary for the Latin American healthcare landscape,” explaining that “Our team would like to be perceived as consultants who evaluate and assess clients’ needs in order to deliver a range of solutions – from rentals to purchase orders or any other necessity that the client may have. Our offering is to be the glue of the healthcare industry.” However, Tagle cautions that “The traditional and rigid distributor model will not hold as the industry becomes more and more complex. It will be critical to deliver technology, provide robust data and optimize productivity.”

 

Digitalization

One of the most important ways that companies can offer the aforementioned integrated solutions, is through digitalization. The increase in the use and complexity of digital solutions is a key trend within medtech globally, and Mexico is no exception; Armando Martinez, general manager for Mexico of international lab equipment giant Beckman Coulter, opining that “Beckman Coulter has IT solutions that are strongly linked to our equipment in order to offer integral solutions; bringing fast and accurate results to healthcare professionals and enhancing the quality of life of the patients.”

Patricia Lopez, general manager for Mexico of German weight and height measurement equipment provider seca, however, warns that “there is a big challenge in the implementation of [digital solutions] in the mass public health institutions such as Seguro Popular because of the lack of readiness in terms of technology infrastructure for such solutions in many clinics.”

Martin Ferrari del Sel, country manager at another German outfit, medical and safety technology specialists Dräger, also cautions that implementing digital solutions in Mexico is not always straightforward; noting that “the existing buying process of the public health institutions is an important challenge … because public hospitals are buying devices from different companies and it makes interconnectivity between technological solutions nearly impossible.”

This fragmentation within public health institutions prevents a serious challenge to companies at the forefront of digital medtech, and explains why some are now looking for opportunities outside the public sector. Ferrari del Sal explains that “Dräger has been historically focused on the public market but, considering the inherent challenges in this segment, we have been enlarging our footprint in the private market with big private hospital chains to create a healthier customer portfolio.”

Writer: Patrick Burton

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