Mexico Medical Devices
The Mexican public health market is undergoing ongoing changes in the public procurement system and distribution structure, and the current value of the peso harms price competitiveness of U.S. products. Evolving rules governing international shipments of products related to COVID-19 response have created uncertainty for export approval and market entry in the short-term.
There are three different sub-sectors in Mexico’s healthcare sector: medical devices and supplies, healthcare services, and pharmaceutical/biopharmaceutical. Mexico’s import market for medical devices and supplies reached USD 4.9 billion in 2019 and the pharmaceutical import market was USD 2.5 billion in 2019. Neither of these estimates includes the import value for healthcare services.
The acquisition and distribution of medical devices has been severely affected by the COVID-19 sanitary emergency. The pandemic has also exacerbated COFEPRIS´ backlog in processing registrations, with over 14,000 pending approvals. Additionally, Undersecretary Lopez Gatell, who oversees the response program against the pandemic, is now the head of COFEPRIS (FDA equivalent), which is experiencing significant administrative changes that may further impact the organization’s effectiveness even more. In an effort to stop corruption practices, COFEPRIS along with the Health and Wellbeing National Institute (INSABI) made a deal with UNOPS, establishing a procurement platform that will allow companies from all over the world to compete as potential suppliers for the Mexican market.
Under current Mexican law, government purchasing rules provide preference to suppliers from countries with which Mexico has a free trade agreement. This benefited U.S. suppliers under NAFTA, and the new United States–Mexico–Canada Agreement (USMCA) provides additional benefits.
It is unclear how the Mexican Government will adapt its health sector changes to its trade treaty obligations. The USMCA entered into force on July 1, 2020, and with regards to the healthcare sector, the agreement contains significant improvements and modernized approaches to rules of origin and intellectual property issues. FEMA published a Temporary Final Rule in April restricting exports of five categories of medical products unless expressly approved by FEMA. On April 21, FEMA published an update listing ten exemptions from the TFR, including charitable donations by a non-profit, intracompany transfers, final shipments to Mexico and Canada, and shipments made by or on behalf of the U.S. Federal Government.
On August 10, the Temporary Final Rule was extended to December 31, 2020 and the list of covered medical products was updated to the following: (i) Surgical N95 Filtering Facepiece Respirators; (ii) PPE surgical masks; (iii) PPE nitrile gloves; and (iv) Level 3 and 4 Surgical Gowns (collectively, “TFR Covered Materials”).
For more information about the Mexican healthcare sector, please contact Marixell Garcia, Commercial Officer, CS Mexico City at: Marixell.Garcia@trade.gov