Executive Summary
The Bukele Administration, which entered into office in 2019, aims to modernize and transform El Salvador’s Integrated National Health System. The government priorities are to resolve the shortage of medicines, improve the lack of hospital maintenance and infrastructure, and increase the accessibility of health services. During 2020 and 2021, actions to contain Covid-19 were added to the government priorities.
The Ministry of Health has been the leading institution coordinating the pandemic crisis. The government constructed a new hospital to treat Covid-19 patients, Hospital El Salvador, which is located at the former facilities of El Salvador Fairs and Conventions Center (CIFCO). Hospital El Salvador was an investment of $75 million USD and consisted of 1,064 Intensive Care Unit beds, and a vaccination center. In addition, the government improved and renewed some public hospitals (including the acquisition of hospital beds for the entire public health network in 2021), and created an official Covid-19 website (www.covid19.gob.sv) to inform the population about the number of cases, deaths, vaccinated people, government decrees, and other related topics regarding the pandemic. The Ministry of Health Medical Emergency System (SEM) monitors positive Covid-19 cases and provides medicine kits to patients that do not require hospitalization. The government provided Oxford-AstraZeneca, Pfizer-BioNtech, Moderna, Sinovac, and Sinopharm vaccines to the population.
The public health sector services are provided by the Ministry of Public Health and Social Assistance (MINSAL), the Salvadoran Social Security Institute (ISSS), the Salvadoran Integral Rehabilitation Institute (ISRI), Salvadoran Institute of Teachers Welfare (ISBM), the Institute of Social Prevision of the Army (IPSFA), and the Solidarity Fund for Health (FOSALUD). The private health sector is made up of hospitals, clinics, and non-profit organizations. The Ministry of Health has a total of 31 hospitals, and 372 health units; and the ISSS has 11 hospitals, and 71 health units and community units. There is only one military hospital. The private system is composed of approximately 30 hospitals, and over 116 private clinics concentrated in the country’s three main cities: San Salvador, Santa Ana, and San Miguel.
The Ministry of Health is responsible for the health policy in El Salvador. The National Medicine Directorate (DNM) is responsible for the importation and commercialization of medical devices, medical equipment, pharmaceuticals, nutritional supplements, natural, dental, and hygiene under the Medicine Law that entered into force in April 2012. The DNM is undertaking a series of actions to reduce the product registration time. In addition, the government is implementing the Digital Agenda 2020-2030, which lays out the design, creation, and implementation of an Electronic Health Record. The Ministry of Health expects the Electronic Record to be ready in all public hospitals in the second half of 2022.
According to the approved 2022 El Salvador National Budget, the health budget totals $1,085,959,209 USD, from which $965,738,144 USD are from government funds, $120,204,515 USD from foreign loans, and $16,550 USD from donations. The Salvadoran government has relied on international cooperation and international loans to control the pandemic.
The 2020 Multipurpose Household Survey Report (EHPM) organized by the General Directorate of Statistics and Census (DYGESTIC) in El Salvador, reported that 24.8% of the total population had some type of medical insurance. From the people covered, the insurance is broken out as follows: 91.6% ISSS, 5.9 % ISBM, 2.1% IPSFA, and 0.4% private or other.
Market Entry
To enter the market, a U.S. exporter needs to identify a local distributor or representative in the country. Selling to public institutions typically requires participation in a public bidding process announced through the government procurement website: www.comprasal.gob.sv. It is recommended that U.S. companies work closely with their local partner to develop effective promotional strategies and maintain a continuous presence in the market. Also, it is recommended to have a legal representative (law firm), who can assist in preparing a bid offer. According to the Salvadoran Government Procurement Law (LACAP), the lower bid is usually granted (1).
The public sector is the primary purchaser of medical equipment and supplies through the Ministry of Health and the Salvadoran Social Security Institute (ISSS). Public institutions differ from private entities as they only buy new equipment. Some private hospitals occasionally acquire used or refurbished equipment. Approximately 80% of El Salvador’s market is new medical equipment and 20% used or refurbished.
In general, the Salvadoran market is price driven. However, Salvadoran hospitals and clinics will consider offers of high-quality, durable products at competitive prices. Post-sale service is crucial in the market as hospitals and clinics require technical support for their equipment. For example, a large German manufacturer is the leading supplier in the health system as they have well-established operations in El Salvador and can respond quickly to local needs. U.S. companies are encouraged to work with local distributors that can provide technical support to local clients. Additionally, it is recommended to have product literature, operating instructions, and manuals in Spanish.
(1) In March 2022, the Legislative Assembly approved a State of Emergency in El Salvador due to gang related violence. At the time of publication, this measure is set to expire on June 25, 2022, but has been extended twice and may continue to be extended. Within this State of Emergency, the Executive Branch allows contracting and acquisitions without adhering to the Law of Acquisitions and Contracts of the Public Administration (LACAP), if they can demonstrate ties with the emergency.
Current Market Trends
Projects funded by a $170 million loan from the Inter-American Development Bank.
- North Zone Hospital: The design and construction contract awarded in 2021. Bid for equipment is expected to be announced in second half of 2022. The contract specifies that $5 million will be allocated for the purchase of medical equipment.
- Hospital Rosales: The bid for the design and construction announced in 2021 was cancelled by the Ministry of Health in February 2022. The Ministry of Health named the recently created organization, Municipal Works Directorate (DOM), as a co-implementer of the project. A new bid for the design and construction is expected to be announced in 2022. The total investment is approximately $80 million, from which $19 million will be allocated for the purchase of medical equipment.
U.S. Companies interested in these opportunities should register at the United Nations Development Business page or COMPRASAL to receive bid announcements.
Market Size
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Healthcare spending (including investment)
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… as percent of GDP
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7.17% of GDP (2019)
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Hospitals, Procedures, Healthcare Professionals:
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Number of hospital beds
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1.2 beds per 1,000 population (2017)
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Physicians
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2.9 physicians per 1,000 population (2018)
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Demographics
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Population
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6.4 million
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Life expectancy
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74 (2020)
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Maternal mortality ration (per 100,000 live births)
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46 (2017)
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Source: World Bank
Main Competitors
In 2021, El Salvador imported a total of $163.98 million USD in medical equipment and devices, with U.S. products making up roughly 19% of the market share. The main competitors in this sector are products from China, Germany, and Japan. However, U.S. products are preferred due to quality, customer awareness, and availability of spare parts and accessories. There is no significant local production in El Salvador..
Registration Process
Medical devices, pharmaceuticals, and dental products are regulated under the Medicine Law that entered into force in April 2012. Products need to be registered at the National Medicine Directorate (DNM). The registration requirements are available at the DNM website: www.medicamentos.gob.sv. In the case of medical devices, some products are excluded from the registration process. For a current list of excluded products please visit: https://www.medicamentos.gob.sv/index.php/es/secciones-m/insumos-medicos-menu/248-listado-de-productos-exonerados-del-registro-sanitario-como-insumos-medicos-2018
In addition, ionizing radiation devices or equipment require an import permit from the Radiation Protection Directorate at the Ministry of Health.
New and used medical equipment can be imported into El Salvador and needs to be registered at the DNM; however, used or refurbished equipment cannot be older than 10 years from the date of manufacture. U.S. exporters should be advised that a Good Manufacturer Certificate (GMC) is required when exporting new, used, or refurbished equipment to El Salvador.
Reimbursement
There is no reimbursement process in El Salvador. Public hospitals and clinics operated by the Ministry of Health are free to the population.
The Salvadoran Social Security Institute (ISSS) offers health insurance and health services to Salvadorans who have a formal job. Contributions to the ISSS are based on the employee’s salary – the employee pays 3%, and the employer 7.5%. However, most of the population works in the informal economy with no access to the ISSS system, and therefore depends on the public hospitals for health services.
Some private companies offer private insurance to their employees as a work benefit, where employee and employer pay a certain percentage of the annual fee to an insurance company
Barriers
The importation of medical equipment is not restricted, and no tariffs are applied except for the 13% value-added tax.
Procurement & Tenders
Government tenders are posted in the procurement official website: www.comprasal.gob.sv.
Trade Events
There are no large local trade shows in the healthcare industry.
Frequently Asked Questions
1. Do I need to register my products to export to El Salvador?
Yes, medical devices need to be registered at the National Medicine Directorate (DNM) (www.medicamentos.gob.sv). A U.S. exporter needs to identify a legal representative to start the process at the DNM.
2. Where do the public entities publish their tenders?
The public-sector institutions, including the Ministry of Health and Salvadoran Social Security Institute (ISSS), publish their tenders at the government procurement website COMPRASAL (www.comprasal.gob.sv).
3. If my product has a U.S. Food and Drug Administration (FDA) certification, would that be accepted in El Salvador?
Yes. An FDA certification will be part of the documentation a company needs to submit for the registration of the product in El Salvador.
U.S. Commercial Service Contact Information
Name: Lidia Sosa
Position: Senior Commercial Specialist
Email: lidia.sosa@trade.gov
Phone: +503 2501-3211
