The Medical devices (MD) industry is expected to return to previous growth trends in 2021 (2,7% per year in the US, according to Ibis). This depends partly on global conditions, and also on how manufacturers face other sector-specific challenges:
1. Key regulatory standards:
The Regulation (EU) 2017/745 controls medical devices sold in the EU (its full compliance has been delayed until May 2021) and the Unique Device Identification System -UDI- is a US legislation requiring medical devices to be uniquely trackable. In line with new UDI rules set out in the EU regulations above, its enforcement has been delayed for some devices until 2022. Robust quality management systems and serial number tracking of MD through the entire manufacturing processes will therefore be key abilities.
2. Combating counterfeiting: 10% of MD are substandard or falsified in low and middle-income countries, according to WHO in 2018. The buyer’s trust is diminished when outright fraudulent products are presented under their branding, which can represent serious threats to manufacturers. A compromised supply chain can lead to faulty end products and legal vulnerabilities. WHO has assessed multiple solutions: batch and serial number tracking of MD, bar code ID, data matrix codes (Q-codes) and RFID tags.
3. High distribution costs: according to StarFish Medical, distribution costs routinely account for more than 50% of all margin for medical manufacturers. This also affects procurement, with the task of sourcing reliable, compliant and traceable medical components; typically soaking up a further 25% of margin.
If MD manufacturers are able to manage these risks in their supply chain and overcome these challenges, they will continue to expand as world demand for quality medical products and technology grows.
Source: Unleashed Business Tips Date: October 28-2020
Effects on Costa Rica exports
In order to overcome these challenges, world manufacturers need to count on reliable and experienced suppliers in the MD industry, such as Costa Rican partners. The country is the second exporter of MD in Latin America (TradeMap, 2019) and hosts 5 of the top 10 MD manufacturers in the world (MPO and CINDE, 2020).
Costa Rican exports of MD accounted for USD 3.683 million in 2020 (CAGR 2016-2020: 11%), mostly exported to the US (63%), but also to the EU (23%) and Asia (10%). Last January, these exports showed a 49% y-o-y growth.
Strong investments of these global companies have fostered the establishment of suppliers and a life-sciences ecosystem. The country is characterized by world-class standards in contract manufacturing, sterilization, mandrels and wires (for example surface grinding and deburring), special finishing, moulding, special coatings, cleanroom services and supplies, precision machining and tooling, extrusion, packaging solutions, printed materials and other supporting services (for example calibration and microbiology tests).
These high standards merge with logistic advantages, due to the ideal geographic location, and preferential access to 2/3 parts of the world’s GDP through free trade agreements, including the USA, EU, China, South Korea and Singapore to make Costa Rica an ideal partner for nearshoring.
If you are interested in knowing more about Costa Rican world quality know-how and standards for your MD supply chain, let us know at firstname.lastname@example.org.
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