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Analysis

Medical Devices: An Evolving Industry

Wed, 09/09/2015 - 13:03

The Medical devices industry has been growing closely alongside the medical sector. This area is exceedingly large as it incorporates an extremely wide variety of devices. The Global Harmonization Task Force defined a medical device as any article, instrument, apparatus, machine, appliance, implant, software, or material used for many different purposes including, but not limited to, prevention, diagnosis, or treatment of a disease or an injury, the support of life or physiological processes, disinfection of medical devices, and control of conception. The global market for medical devices continues to grow but it is being impacted by three different trends: value-based health care, increased regulations, and internal resource constraints led by the downturn of the economic sector. The production of medical devices worldwide was valued at US$624 billion in 2013 and it is expected to grow at an average annual rate of 7%, thus the sector is expected to reach US$996 billion by 2020, according to ProMéxico.

The industry has grown considerably in Mexico, and it is considered to be an important economic sector. According to ProMéxico and INEGI, Mexico currently has more than 2,344 companies with more than 148,000 workers dedicated to the manufacture of medical devices, most of them located in Mexico City, Nuevo Leon, Baja California, Chihuahua, Tamaulipas, and Sonora. Mexico is attractive for international manufacturers of medical devices as the country can offer competitive costs, highly qualified professionals, and a geographically strategic position from which to export to Latin America. The evolution of this sector can be attributed to many factors within Mexico including scientific and technological progress, a prolonged life expectancy, and an aging population. ProMéxico states that Mexican production of medical devices was valued at US$14.6 billion in 2014 with an expected average annual growth of 7.2%.

Currently, Mexico is both the largest medical device importer and exporter in Latin America and it is expected to remain so for the next few years. According to Espicom, more than 90% of medical devices produced by Mexico in 2014 were exported to the US. The rest is divided among other markets, including France and Belgium. ProMéxico declares that total exports for 2014 reached US$7.7 billion. The main products exported are medical, surgery, and odontology instruments (74%), followed by orthopedic devices (11%) and respiratory and massage equipment (7%).

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The country is extremely attractive for international companies as the sector attracted US$1.9 billion in direct investments from 2000 to 2013. Among the main reasons for the interest shown by international companies to produce in Mexico are the considerably lower manufacturing costs of medical devices, which cost 18% less to produce in Mexico in comparison to the US.

Mexico is among the only 34% of countries with a medical device policy incorporated into the National Health Program, according to the WHO. COFEPRIS is responsible for the classification and regulation of all medical devices and, taking into account the large number and variety, the Technical Committee of Healthcare Supplies has divided them into six categories based on their intended use. The first is medical equipment, which refers to specific instruments to provide medical or surgical attention, or to be used in the exploration, diagnostic, treatment, or rehabilitation of patients. The second are prosthetics and every device intended to replace or complement an organ or tissue in the human body. The third are diagnostic agents including antigens, reactants, and growth and contrast media to be used in clinical and preclinical tests. The final three are odontology supplies, surgical materials, and hygiene products.

Medical devices are classified according to risk factors set out in articles 82 and 83 of the regulation of Health Supplies, and COFEPRIS has defined three classes. Class I includes devices already known in most medical practices with proven safety and efficacy, as well as those devices that are not inserted into the human body. Class II refers to devices that are already used in medical practices but are manufactured with different materials or are used at different concentrations, and include those that are inserted into the human body but do not stay inside for more than 30 days. Finally, Class III devices are those that remain in the body for more than thirty days. Their approval process and subsequent introduction to the market depends on this classification.

The medical devices industy represents a promising area of development for the economy. Backed by a solid legal framework and strong regulations to ensure Good Manufacture Practices and avoid the introduction of low-quality products, the medical device market is well positioned for expansion.graph1