Mexico may become a world top-5 exporter of medical devices

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By MEXICONOW Staff Report


Over the past decade, the medical device sector in Mexico has presented a major sustained growth, which has made the country a leader in the manufacture and assembly of medical technology worldwide.

The medical device manufacturing plants in Mexico have a broad selection of products from the simplest ones like rubber gloves to sophisticated devices used in life saving surgeries.

In 2014, the medical device industry located in Mexico exported US$7.7 billion. Instruments and equipment used in medicine, surgery, dentistry or veterinary sciences represent 76% of Mexican exports of medical devices. 

Mexico is the third worldwide exporter of syringes, needles, catheters and cannulas; the fifth of instruments and devices used in the medical, surgical or dental areas; it ranks sixth in exports of equipment and orthopedic devices, and is the seventh largest exporter of electro-diagnostic equipment, according to ProMexico data. (Exhibit 1)

The forecast for this industry in the upcoming 5 years is a 6.5% annual growth. In 2020, the industry forecast is US$15 billion in exports. Experts said these numbers can go up because the global economy has no direct impact on this industry since the demand of products is always high.

“Luckily for us, many countries are growing and paying attention to their population´s health. China is an example and many other countries are following its lead,” expressed Julio Chiu, President and CEO of the Seisa Group's companies, a catheter manufacturer.

Medical device manufacturing in Mexico is carried out by some of the biggest names in the industry. These include well-known global powerhouses such as Medtronic, Kimberly Clark, Boston Scientific, Johnson & Johnson, GE, Tyco, Siemens, Cardinal Healthcare, Becton Dickinson, 3M, and Stryker Incorporated.

According to recent research, to manufacture medical devices in Mexico lowers the cost 18 to 23% for these companies, compared to their native countries.

In Mexico, the medical device industry has 148,597 direct employees. At least 2,344 medical device businesses operate in Mexico and up to 700 are exporters.

Most of this industry is located in Mexico City, Estado de Mexico, Baja California, Jalisco, Guadalajara, Veracruz, Puebla, and Chihuahua, according to the National Institute of Statistics, Geography and Informatics (INEGI) data.

The biggest and oldest cluster is located in the Cali Baja Binational Mega – Region and includes research facilities located in San Diego, while Tijuana and Mexicali embrace at least 60 global - leader medical device manufacturers.

Pablo Davila, former president of the Mexican Association of Innovative Medical Devices Industries (AMID), said Mexico has the potential to go from the ninth to the fifth place on the medical devices manufacturing world ranking, especially now that the sanitary regulations have changed.

He explained the medical devices were regulated the same as the pharmaceutical industry; therefore, innovation was hard to achieve because when the device had the official approval it was obsolete for the industry.

The new regulation allows companies to import raw material and more than 2,200 medical devices without additional paperwork or customs authorization.

Innovation

Mexico is among the top ten countries in the world that export innovative medical devices; it is the leading exporter in Latin America and the leading supplier to the U.S. However, most of the research and development is not done at the Mexican facilities.

“We need to work together to attract more than manufacturing of medical devices. Mexico has the capacity to be a top nation on innovation, but first we must create strategic alliances with the private sector, the government, and the universities,” Davila said.


Over the years, medical device manufacturing in Mexico has progressed to include the production of sophisticated Class III devices. Class III devices have the most stringent controls and usually support or sustain human life, are of substantial importance in preventing impairment of human health, or present a potential unreasonable risk of illness or injury to the patient. Products that are manufactured medical device facilities in Mexico undergo the same scrutiny and compliance as is required for Class III devices in the U.S.

Even though the medical device companies established in Mexico have heavily invested in education for their workforce, most of them do not do their research, development and innovation on Mexican territory.

Gerardo de la Concha, Vice President of manufacturing operations in Medtronic Mexico, acknowledged in a recent forum that it will be a long time before the plant he manages can take on new challenges not only in process development, but also in product development, a task that involves up to 7 years of research and testing. Nowadays, Medtronic handles Research and Development in Europe and the U.S.

“In order for that to happen, Mexico would have to develop specialists in very specific areas, such as doctors with a full engineering education,” he expressed.

Chiu is more optimistic about this issue and he said suppliers can make a huge difference if they started to develop new technology and innovation in the field.

“We need to make sure all the companies established in Juarez are aware they can do more to develop new products, to promote a Research and Development center, and to develop sustainable products. If we can do that, we will have high – paying jobs in the region,” he expressed. “We do have the intellectual capacity. We have a lot of experience in manufacturing; therefore, our workforce is highly trained. But still, we need to invest more on education. We need our engineers to understand the sustainability and development concepts of what we do.”

A company trusting Mexico to do research and development is Flex. In the last quarter of 2015, this company celebrated the grand opening of its new medical device manufacturing facility and Center of Excellence in Tijuana, dedicated to the innovative development and manufacturing of medical devices.
Chiu is more optimistic about this issue and he said suppliers can make a huge difference if they started to develop new technology and innovation in the field.

Flex personnel explained the facility is dedicated exclusively to medical device manufacturing and is staffed with a highly skilled team, led by a seasoned management team from medical device manufacturing and engineering backgrounds.

Davila expressed education is a key element to attract more research and development companies in the medical device field; therefore, universities and the government must work with these big companies to adjust the curricula and give incentives for training.

In conclusion, Mexico manufactures world –class medical devices and this cluster is growing even faster than in other nations. Specialist in this field argue this is a positive trend, but more must be done to attract research and development companies to Mexican cities and create more high paying jobs.

In the meantime, the well-known global powerhouses in the medical device industry are concentrating their efforts improving the quality of their devices manufactured in Mexico, leading the country to be a top 5 exporter by 2020.