An Expert's View about Medical, Health and Cosmetics Products in Mexico

Posted on: 31 Dec 2012

Monterrey is known as Mexico’s “Health City” because of its advanced medical infrastructure, and because it offers high quality-specialized medical services with the support of well-respected prestigious institutions and a platform of health professionals. In spite of the present security issues, Monterrey has been facing during the last three years; it continues to be known as a medical tourism center. However, the economic crisis that has affected the U.S. and Europe has decreased the expected growth rate for the next several years in this sector. According to El Financiero, an important financial newspaper, the value of the tourism health market is considered to be $122 million per year. However, it is expected that the increase for next years will be lower than previous years.
Monterrey continues to be a good market for state-of-the-art medical equipment and specialized devices. That trend will continue with the increase in the quantity of hospitals, research centers and other medical centers.
According to National Institute of Statistics and Geography (INEGI) Nuevo Leon’s public health sector maintains 3,025 beds, 120 surgical rooms, and 75 delivery rooms. The private sector has 1,609 beds, 175 surgical rooms and 154 delivery rooms. (INEGI)
Recently, due to its manufacturing capabilities, Mexico has become the main supplier of medical devices for the most important market in the world, which is the U.S.

Market Demand
The Mexican population is covered by public sector medical organizations, which includes Mexican Institute of Social Security (IMSS), Safety and Social Services Institute for the State Workers (ISSTE), Secretary of Health (SSA), Petróleos Mexicanos (PEMEX – the Mexican state-owned petroleum company), Secretariat of National Defense (SEDENA), the Navy (SEMAR), and the social health protection system called Seguro Popular. Seguro Popular was launched in 2003 and the program was designed to provide health insurance coverage for those in Mexico that were not covered by another health program. According to Business Monitor publication, due to the ongoing success of Seguro Popular and increased population growth prospects, government healthcare spending in Mexico is expected to rise from US$70.2 billion in 2011 to US$108.8 billion by 2016, representing a compound annual growth rate of 8.6% in local currency terms and 9.2% in U.S. dollar terms. Furthermore, public sector spending is forecast to rise from US$35.7 billion in 2011 to US$59.5 billion by 2016, accounting for 55% of total spending in the healthcare sector. The spending boost follows the government’s plan to provide universal healthcare coverage to the Mexican population by the end of 2015.
Obesity and diabetes are health problems that continue to grow. In terms of obesity problems in children, Mexico is third place at worldwide level and Monterrey is first among cities in Mexico. Dr. Agustin Lara, from the Mexican Secretariat of Health, and Director of the health program for elderly and adult people, states that the obesity represents a major expenditure by health programs which may be on an average equivalent to ten times the budget allocated to the social programs known as “Oportunidades” (a health program offered by the IMSS to rural areas), and “ Liconsa”, (federal nutritional program that sells food and milk to the very low income people), which together amount to 11.6% from the total health expenditure in Mexico. In monetary terms, it is around US$25 billion. The need to reduce this problem can be a source of opportunity in sales of equipment and medication.
Monterrey continues with an aggressive expansion in its hospital infrastructure, clinics and research centers. In the last few years, several private and public hospitals have been built in the area. The total investment of the three large private hospitals built in Monterrey (Zambrano Hellion, Doctor’s Hospital and Hospitaria) during the last two years was $450 million.. Centro Medico Zambrano Hellion was an ITESM’s ( Monterrey Institute of Technology and Higher Education, one of the most prestigious universities in Mexico) project with an investment of approximately $200 million and the Doctor’s Hospital’s project was developed by the Oca Hospital, and it is considered the largest hospital in Latin America. Both hospitals are highly specialized facilities. Hospitaria is another private hospital built this year in Monterrey with an investment of approximately $50 million. It is the first green hospital financed by the IFC-World bank and it is a new concept which may have good potential to be implemented in other areas of Monterrey as well as in other states of Mexico. In its first phase, Hospitaria includes a hospital of 50 beds, 60 doctor’s offices, specialty clinics and medical stores; the building has seven stories, seven surgical rooms, and 14 units for intensive care. The second phase will include a hotel of 120 rooms for patients and their relatives.
A private hospital project known as Ginequito (women’s gynecological hospital) continues with its expansion plans, adding 20,000 square meters to its present facilities. The plan includes installing a gastric endoscopy and colonoscopy suite, remodeling of 12 rooms, and increase the medical equipment in the area of ambulatory surgery and in the emergency area installing three observation modules. Also they are building six stories to install an emergency and shock-trauma center, and 60 doctors’ offices. This represents an investment of approximately US$6 million.
The Nuevo Leon state government plans to build three new hospitals, which two of them will be in the nearby municipalities, (one will be in the north zone and other in Montemorelos, Nuevo Leon,) and a highly specialized one in Monterrey.

Market Data
The medical cluster called Monterrey Healthcare City continues development and it includes the most prestigious and high-tech private hospitals such as San Jose-Tec, Christus Mugerza, Oca, CIMA, Centro Ginecologico y Obstetricia de Monterrey known as Ginequito, and Clinica Vitro. The first four are certified by the International Joint Commission (IJC), and two of the new hospitals that were built in the last two years, The Doctors Hospital and Zambrano Hellion Hospital are applying for this certification.
According to a report from PROMEXICO, (ProMexico is the Mexican Government institution in charge of strengthening Mexico's participation in the international market) the production of medical devices in Mexico was valued at $5.06 billion in 2009 and employs more than 99,500 people. The medical devices sector is comprised of developers, manufacturers and distributors of material and devices for medical or health care use; equipment or instrument for medical, surgical, and ontological use, splints, prosthetic, respiratory therapy and X-ray machines, surgical, dental or veterinary furnishing, among others. This industry is comprised mainly of small and medium enterprises, and although it has showed a success in the manufacturing and assembling process, it is still relatively young. It has potential to develop more advanced technological projects, with sophisticated high level in the production possibilities. During the last decade, Mexico has become one of the leaders for the manufacture and assembling of medical apparatus at worldwide level. Presently, Mexico is the fifth exporter of medical devices in the world and the second largest market in Latin America and the most important supplier for the U.S. market, which is the largest market in the world.)
According to INEGI in Mexico, this sector has more than 2,000 economic units of which approximately 400 companies are exporters; most of them are dedicated to the manufacturing and assembly. Among the major manufacturing states of medical devices are Nuevo Leon, Baja California, Chihuahua, Distrito Federal, Jalisco, Sonora, Morelos, Tamaulipas and the state of Mexico.

Read the full market research report

Posted: 31 December 2012

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