Medical Device Industry in Mexico: Supplier Integration

Mexico is the largest exporter of medical devices to the United States, the largest exporter of medical devices in Latin America, and the eighth largest medical device exporter in the world. Due to the circumstances created by the COVID-19 pandemic, it can further strengthen its position in the region and the world.

According to information from Medical Devices Section of the National Chamber of Commerce of the Mexican Pharmaceutical Industry (CANIFARMA,) Mexico is the leading exporter of medical devices to the United States; the world’s third-largest exporter of tubular suture needles; the fourth exporter of medical, surgical, dental and veterinary instruments and appliances; and the fourth largest exporter of medical furniture, syringes, catheters, cannulas, and other similar instruments.

Additionally, data from the report “The Medical Device Industry in Mexico”, produced by the global consulting firm KPMG, points out that, over the last several decades, the country has developed great potential in this manufacturing sector by being the largest exporter of medical devices in Latin America and the eighth in the world.

For its part, the Mexican Association of Innovative Industries of Medical Devices (AMID) noted that the medical device industry in Mexico is a national and international leader in employment, growth, global sales, and foreign direct investment.

Fernando Oliveros, President of AMID, added that the medical device industry in Mexico generates around 140,000 jobs in the country and also promotes the research and development of small and medium-sized businesses and companies that act as suppliers.

“Today, we need to fix our attention on finding solutions in each of the areas of opportunity in the medical device industry in Mexico that exist. The benefits of growth in the sector need to expand completely to encompass all links in the industry’s value chain,” Oliveros said.

Supplier opportunities to the medical device industry in Mexico

According to Miguel Angel Félix, Treasurer of the Baja California Medical Device Cluster and General Manager of Quality Mexico Assemblies, in this regional industry cluster member companies work together under a collaborative scheme with the goal of making the region more competitive.

“The medical device industry in Baja California closed 2019 with a growth of about 9%.  This figure represented nearly double the growth of manufacturing nationwide. In the region, there are about 76 manufacturing companies, which account for about 50% of the medical device industry in Mexico. Also, 2019 closed with just over 71,000 direct jobs in the region,” according to Félix.

Another peculiarity of the medical device sector of the region is that between 70 and 80% of what is manufactured is finished product, unlike other sectors or clusters that make sub-assemblies. All of this production is for export sales.

In this sense, it is important to take into account that the buying potential in the region is $1.7 billion: “It is a large market, but unfortunately the integration of domestic suppliers in the medical devices industry in Mexico is limited to an average of 3% to5% of the value of production”.

The Mexican labor market would benefit greatly from having domestic suppliers to medical device manufacturers in the region participate in the industry’s production.   They can be integrated into the medical device sector’s export supply chain so that domestic suppliers would have a significant opportunity to diversify their markets.

According to Miguel Angel Félix,” The sector cluster is developing strategic plans and one of the strategies that we have in the cluster is the development of suppliers. We try to help them to be certified in certain standards that are required; additionally, we also have the practice of holding meetings on the premises of companies that are in the region. This gives the cluster member companies that attend the opportunity to engage in networking with one another. It’s a regular activity that we promote that helps a lot.”

Felix also added that his also organization holds workshops throughout the year for the entire industry, but particularly for Mexican medical device industry suppliers to integrate and learn what regulations are applied in the sector.

In the case of the metalworking companies, Felix points out that parts, tooling, moldings, and mold maintenance for the machines are in demand.

“In a smaller proportion, the sector also requires some metal components; although demand for these components is relatively low because of the number of requirements they must meet. Finally, there are also demands for automation and packaging materials in the Mexican medical device industry,” he said.

On the characteristics that suppliers in the metalworking sector must-have, the specialist noted that the basics require that companies are certified in ISO 9001 2015.

“For the industry, there is a very specific ISO standard that is 13485; However, even if they are not certified in that standard, if their quality management system is robust enough to meet some of the most critical regulatory requirements, they can start working as suppliers in the sector,” he said.

He added that it will also depend on the type of work required because in some cases tolerances of 10 thousandths are required, as well as some heat treatment operations that are specific to the needs of the industry.

In the case of the metalworking sector, the Felix detailed that parts, tooling, molds, and mold maintenance for the machines are required in the Mexican medical device industry.

In this sense, Rafael Ontiveros, Director of Engineering of Hemaq, noted that his company has supplied several types of equipment for the medical device sector in Mexico: “We have supported doctors who do medical element analysis to see how a device is behaving in the human body.  For example, we have supported the manufacture of prototypes for the part of the hip in which the sphere of the femur enters.  We have had especially good results”.

“We have also made hip implants and parts of the knee with full 5-axis machines that allow us to make tool compensation in projections and decrease the error in the length of the tool to enter cavities and/or make the spherical surfaces of the knee parts or femur hollow,” he said.

He also noted that the capability to do this type of machining is available in the Mexican medical device industry: “We as machine tool suppliers are open to do this type of testing or machining and to support development so that the customer can do this type of manufacturing in the country.”

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