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Reducing Foreign Expenditure on Medical Devices

By Miriam Bello | Mon, 09/21/2020 - 11:25

Despite Mexico’s role in the production of medical devices, the country imports around 90 percent of such devices. “Mexico spends US$25 per capita on medical devices whereas countries like the US spend around $500,” explains Ramses Galaz CEO of GSE Biomedical, during an interview with MBN. This market represents around US$5 billion in Mexico, which means the country imports close to US$4.5 billion. According to Galaz, Mexico’s potential on technology development and quality in manufacturing can enable the country to save around 70 percent of that US$4.5 billion expenditure if investment begins soon.

GSE Biomedical was part of the successfully developed Mexican ventilator to combat COVID-19: VSZ-20-2. Galaz explained that the pandemic exposed Mexico’s great dependency on foreign technology. Yet, despite the barriers, there are around eight ventilator developments. “However, from my experience, I know that taking a Class 2 development to our regulatory authorities takes a great deal of effort, in-depth knowledge and investment,” he concluded.

MBN spoke with Josué Garza, Director of Business Development and Operations at Insumos para la Salud, about the barriers to making medical devices development a reality in Mexico. “We are still missing resources and support for educational and talent activities, which is a big barrier for the country to accelerate and boost its abilities.”

ProMexico’s closing was another thing that damaged the sector regarding investment attraction and attention to medical devices. According to Garza, this created uncertainty within the sector as the government keeps reforming it constantly. “This body (ProMéxico) delivered impact information about the industry and its status, strengths and areas of opportunity. As market strategists, ProMéxico’s information meant proof of the living potential of Mexico in the sector and how much it could grow with investment.”

María Luisa Gutiérrez, CEO of Medisi, also shared with MBN her perspective for this possible upcoming opportunity. She explained that Mexican companies developing its own technology are normally participating with Class 1 devices, not 2 or 3, which are the most sophisticated. “The regulatory process has a lot to do with this because we really do not have the guidelines to develop a Class 3 medical device.” These regulation gaps can represent a setback on investment and prevent the industry from generate a true economic spillover.

How could the country exploit this opportunity? “Mexico would have to begin with Class 1 devices, which require an investment of around US$200,000 to US$2 million. Class 2 developments require an US$8 million investment and Class 3 needs US$10 million or more,” said Galaz. While the return on investment for Class 3 development takes years to materialize, this is the only the only way to ensure a sustainable healthcare sector in the long term.

Photo by:   vipra gen via Pixabay
Miriam Bello Miriam Bello Journalist and Industry Analyst