Healthcare Resource Guide - Panama

Panama

Country Stats

Capital: Panama City
Population: 4.4 million (2022)
GDP: USD $76.5 billion (2022)
Currency: US Dollar
Language: Spanish

Healthcare - Panama

Explore healthcare export opportunities and the regulatory environment in Panama.

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Executive Summary

Panama’s strategic location as a bridge between the Pacific Ocean and the Caribbean Sea has made it a maritime and air transportation hub. It is also an international trading, banking, and services center and carries the strength of the U.S. Dollar as local currency. During the last two administrations, the government has made significant investment in the public health sector, in construction of state-of-the-art general and specialized hospitals, but there are still deficiencies in providing adequate care to the population. The public sector represents more than 60% of the medical equipment and supplies market. The private health sector is very modern, offering high quality service, with major private hospitals affiliated with prestigious international hospitals.

Covid-19 has seriously impacted the country’s economy and it is projected that it will take more than a year to return to pre-pandemic growth levels. As Covid-19 declines, Panama plans to implement preventive measures, including vaccination campaigns, an increase in the availability of diagnostic tests, and the strengthening of inventory of Covid-19 drugs.

The health market is expected to grow at a rate of 10% over the next three years. That growth is anticipated to be fueled by the construction of new public hospitals and replacement of outdated equipment in existing facilities. Private hospitals are also upgrading their infrastructure and equipment, and this will help to promote medical tourism.

As there is no local production of medical equipment, the market relies entirely on imports, most of them coming from the U.S. (over 50% market share). Due to recognized quality, reliability, and familiarity, U.S. medical equipment is preferred and enjoys a strong reputation among Panamanian medical personnel.

Panama has no significant barriers to health-related products, supplies, or services. Foreign companies will find a friendly business environment in Panama, with a high acceptance for U.S. culture and products. Many Panamanian doctors have been trained in U.S. universities and hospitals and therefore are familiar and knowledgeable with U.S. medical and health products.

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Market Entry

While every country has its problems, Panama has an open economy and provides a friendly business environment. For selling to the public sector, every U.S. company must be registered in Panama as a Panamanian corporation which is relatively easy to accomplish. The owners or shareholders don´t need to be Panamanian and selling to the private sector is less cumbersome as there are no restrictions to engage in international trade.

Another way to enter the market is through a local agent or distributor. There are plenty of Panamanian companies that are qualified, with experience and reputation, to represent U.S companies.

Product registration with Panamanian health authorities is required and this process is addressed in the Registration Process section of this report.
The local market is highly competitive. There are over 50 companies representing and distributing medical equipment with well-trained staffs. The sSales promotion process is done through trade shows, medical conferences, and direct visits to clinics, hospitals, and individual physicians. The Panamanian medical distributors and end-users frequently attend U.S. medical trade shows and are eager to participate in training programs offered by manufacturers.

Apart from having competitive prices, product reliability, reputation, and training are important factors that are considered by prospective distributors or representatives.
The major private hospitals are associated with U.S. hospitals or maintain certifications from U.S. health organizations. Practicing medicine is restricted to Panamanian citizens, except in cases when there is shortage of local doctors in certain specializations. The leading doctors in Panama usually belong to professional associations in the U.S. and to local associations in their respective specialties.

As mentioned, the U.S. dollar is legal tender in Panama and the country has a well-developed international banking center, with over 100 banks that can provide commercial financing. Payment options vary from open accounts to prepayment methods.

The following link provides information on offering terms with export credit insurance: https://www.trade.gov/trade-finance-guide-quick-reference-us-exporters.

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Current Market Trends

Covid-19 changed the scope of the medical market in Panama. The pandemic period required massive resources to be devoted to vaccine procurement, Covid-19 treatment, and the acquisition of equipment. As the disease seems to be more under control in the early months of 2022, the emphasis on Covid-19 should shift from building or increasing hospital facilities and buying equipment to providing vaccines, securing drugs, Covid-19 medicines and implementing preventive medicines and supplies.

Panama is currently discussing a new health service model by which the Caja del Seguro Social (CSS) and the Ministry of Health, the two most important health services providers (which represent over 60% of the market) will consolidate and become a single organization. While this is still in planning, when implemented, the new organization will become the prominent player in Panama´s health market.

In the private sector, Panama’s hospitals are modern and provide excellent services with state-of-the-art facilities, updated equipment, and well-trained doctors. Many of them were trained in their specialties from U.S. hospitals and universities. The local insurance companies provide competitive coverage with many options available to different income levels. Panama is in the early stages of becoming a medical tourism destination due to the quality of its hospitals, geographical location, and language abilities (English is widely spoken in the country).

Services provided by U.S. suppliers include medical treatment in U.S. hospitals (especially in Houston and Miami), training for Panamanian doctors in various U.S. states, technical training for use of U.S. equipment, and consulting services for the public sector. Estimates indicate that Panamanians spend about $10 million annually on medical services in the United States.

The U.S. is expected to continue being the major supplier of medical equipment, education, supplies, and related products to Panama. It is also the main provider of healthcare services. The competition is however increasing from European countries, Japan, China, and Korea.

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Best Prospects

All-Covid-19 related products and supplies, including vaccines (Pfizer, Astra Zeneca, and Johnson & Johnson, mainly), diagnostic kits of all kinds, Covid-19 treatment, and medicines related to Coronavirus and respiratory diseases.
Diagnostic Equipment: There is a positive outlook for diagnostic equipment, including radiology, ultrasound, CAT, and angiographic equipment.
Cancer Treatment medicines: Chemotherapy drugs are in high demand in Panama due to the high number of cancer cases.
Hospital and clinic disposable supplies, including face masks, gloves, syringes, needles, and all types of infection-protective clothes.
Cardiovascular Equipment: Demand for cardiovascular equipment is expected to remain strong. This includes electro- and echocardiographs, defibrillators, and blood testing equipment.
Intensive Care Equipment: Hospitals in Panama provide modern intensive care services, and there is a consistent demand for monitoring and emergency room equipment and respirators.
Surgical Equipment: This includes anesthetic, blood-circulation, and operating room equipment.
Laboratory Equipment: This includes chromatography equipment and clinical chemistry, hematology, and histology analyzers.

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Market Size

Total Market Size - Local Production, Exports and Imports

	2018	2019	2020	2021 (estimated)
Total Market Size	157	172	186	208
Total Local Production	0	0	0	0
Total Exports	0	0	0	0
Total Imports	157	172	186	208
Imports from the U.S.	105	108	112	123

Note: The above statistics are unofficial estimates.

Market Size - Health Spending and Demographics

Health spending
…as percent of GDP	7.27 % of GDP (2020)
Hospital, Procedures, Healthcare Professionals
Number of Hospitals	63
… Public	49
…Private	14
Number of Hospital Beds	9,830
…of which in specialized clinics and rehabilitation centers	26
Physicians	6,513
…which pediatricians	612
Dentists	1,246
Demographics
Population	4.4 million
Life expectancy men/women	Male: 78.7 years Female: 81.5 years (2020)
Infant mortality	Total: 14.3 deaths/1,000 live births Male: 15.5 deaths/1,000 live births Female: 13.0 deaths/1,000 live births (2020)
Percent of population older than 65	16.8%
Annual Deaths	5.9 deaths/1,000 population

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Main Competitors

The health sector in Panama is a very competitive as a lot of countries are trying to enter and obtain a share of the market.

In general, European countries are the main competitors for U.S. providers of healthcare equipment and services. Spain has been active in the medical services sector and several Spanish companies have participated in bids for hospital construction and administration, as well as for the procurement of medical equipment. Due to availability of export credits from the Spanish government, these companies have been able to secure several projects for hospital construction and to sell substantial amounts of equipment in Panama City and the interior of the country.

French, German, and Italian companies are also important competitors in medical equipment and China and Japan are strong competitors in medical supplies.
Colombia, Brazil, and Venezuela are also competitors in specific areas such as ophthalmologic treatment (Colombia), medical supplies (Brazil), and non-sophisticated medical equipment (Venezuela).

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Current Demand

Panama’s demand for medical equipment and supplies is estimated to grow by at least 10% over the next three years. In 2021, there were 62 hospitals (including second- and third-level public hospitals and excluding private hospitals with less than 30 beds): 48 public and 14 privates, with a total of 9,630 beds (11% in private hospitals). The largest facilities are in the Panama City metropolitan area, which covers close to 50% of the country’s population.

The Public Sector is Panama´s most important user of health-oriented products and services and therefore, drives the local demand. The Ministry of Health and the Caja del Seguro Social (CSS - Social Security Fund) together represent more than 60% of the local market. As mentioned, most expenses related to the health sector are financed by the government but in some specific cases (e.g., hospital construction, Covid-19 related programs) Panama has received financing from multilateral development organizations.

The Caja del Seguro Social (CSS) is always updating its services to make them more efficient and cost-effective. Affiliation with the Social Security System is mandatory for all Panamanian workers to receive health services and retiring benefits in any sector. There are approximately 670,000 workers affiliated with the CSS and a total of three million individuals covered by the CSS health system. This amounts to almost 75% of the country’s total population of 4.18 million. The CSS is currently engaged in building a modern medical infrastructure valued at approximately $1 billion USD. This is a huge project called The City of Health and is generating a significant demand. Additionally, there are a few projects for the construction and modernization of hospitals and clinics at all levels in different areas of the country.

The Ministry of Health has implemented a new model of hospital management in which groups of private individuals or boards (patronatos) are responsible for the administration of hospital services and resources.

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Registration Process

Until June of 2019, Medical devices in Panama were subject to inspection and compliance under the Health Research and Technological Development Department and the Medical Devices Regulation and Monitoring Section of the Ministry of Health.

Law 90 of December 26, 2017, and Decree No. 83 of April 26, 2019, established new procedures the registration of medical devices in Panama. The law created a new organization, The National Directorate for Medical Devices, under the Ministry of Health, to greater regulate the market.

The law requires licenses for all importers of medical equipment. It also created and established the technical standards for registering a medical device, as well as the requirements for businesses to engage in the sales and distribution of medical equipment.

Additionally, the law created a registry for medical devices, as well as guidelines for operating, and controlling medical devices, and for collaboration with foreign health entities. Once a medical device has met all requirements, the Directorate will issue a certificate of compliance that will allow the device to be marketed in Panama. Spare parts and supplies will not require product registration if they are acquired from the original supplier of the equipment (OEM).

For selling to the government a Technical Criterion must be obtained based on a Product Fact Sheet. Once the Technical Criterion has been approved the device is then eligible for purchase. The organizations with authority to issue Technical Criterion are the Ministry of Health (MINSA) and the Social Security Organization (CSS).
It should be noted that as of April 2022, Law 90 has not been implemented regarding the private sector requirements due to personnel shortage and technical limitations. Therefore, purchases by private sector organizations are not yet required to have product registration. However, medical devices must have meet U.S. standards (FDA) or European regulations and have ISO Certification. There is no date yet for private sector application of the law.

For additional information you can contact the following office:

Direccion Nacional de Dispositivos Medicos (National Directorate for Medical Devices)
Contact; Roosevelt Batista, Director
E-mail: to.gonzalez@minsa.gob.pa
Tel.011-512-9584
www.minsa.gob.pa

Regarding drugs and medicines, there are no recent changes in regulations and all products are required to registrater with the following office of the Ministry of Health:

Direccion de Farmacias y Drogas
Contact: Elvia Lau, Director
Tel. 011-507-512-9162
www.minsa.gob.pa

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Reimbursement

Panama has a strong health insurance sector.as stated above. Many employees are affiliated with private health insurance programs, most of them sponsored by their employers as part of benefit packages. Another government organization, the Ministry of Health, provides health services to the population not affiliated with the Caja de Seguro Social (CSS). Workers having access to private insurance still must be affiliated with the CSS.

The Social Security System and the Ministry of Health operate their own hospitals and healthcare networks and are located in most of the important urban areas in the country.

Sometimes, because of excessive demand, the unavailability of specialized equipment, or the types of services or physical space, government hospitals contract health services with the private sector hospitals and clinics and are then reimbursed for the costs incurred. No reimbursement problems have been reported in the past.

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Barriers

Panama has no significant trade barriers to foreign medical products or companies, in fact, Panama is considered to have one of the most open economies in the region.

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Procurement & Tenders

By law, all government tenders in Panama must be posted in the official government procurement website – Panama Compra. The link to the website is below:
https://www.panamacompra.gob.pa

All interested companies wishing to participate in future government tenders must be registered as an official provider by filling out an application posted in the above website.
The General Directorate of Public Contracting (Direccion General de Contrataciones Publicas) is the government organization in charge of public contracting in Panama.
Contact information as follows:

Direccion General de Contrataciones Publicas)
Contact: Raphael Fuentes, General Director
E-mail: info@dgcp.gob.pa
Tel: (507) 515-1500
Web Site: http://www.dgcp.gob.pa/

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Government & Association Links

Web Resources:

Ministry of Health: http://minsa.gob.pa/
Caja de Seguro Social: http://w3.css.gob.pa/
American Chamber of Commerce in Panama: https://www.panamcham.com/es
Panama Chamber of Commerce: https://www.panacamara.com/
Expocomer (Commercial Trade Show): https://www.expocomer.com/
Expo Medica Panama (Commercial Trade Show): https://www.panacamara.com/expomedica/

Government Links:

Caja de Seguro Social (CSS) (Social Security Fund)
Contact: Dr. Enrique Lau Cortes, General Director
Address: Clayton, Panama City, Panama.
Tel: (507) 513-1065
Fax: (507) 503-2112
E-mail: ssotillo@css.gob.pa
Web Site: http://www.minsa.gob.pa/

Ministerio de Salud (MINSA) (Ministry of Health)
Contact: Dr. Luis Francisco Sucre, Minister of Health
Address: Ancon, Panama
Tel: (507) 512-9201
Fax: (507) 512-9382
E-mail: ministro@minsa.gob.pa
Web Site: http://www.minsa.gob.pa/

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U.S. Commercial Service Contact Information

Name: Diana Lozano
Position: Commercial Specialist
Email: diana.lozano@trade.gov
Phone: (507)317-5242

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