When we talk about the healthcare system, it is natural to think of hospitals, clinics, healthcare professionals, prevention, and access to services. All of these constitute the heart of any health system and represent the very purpose of public policy in this field.
Yet, around that care network there is another component that is equally indispensable: the industry that develops, manufactures, and makes available the medicines, medical devices, equipment, digital solutions, and technology that make increasingly safe, timely, and efficient care possible.
Both dimensions are complementary. There can be no modern health system without an industry capable of innovating and supplying its needs, just as technological innovation only becomes meaningful when it responds to the challenges faced by patients, professionals, and health institutions.
From an economic standpoint, moreover, health represents one of the industrial ecosystems with the greatest capacity to generate investment, innovation, specialized employment, and regional development. According to data from the Inter-American Development Bank (IDB), Mexico has established itself as one of the most important economies in medical device manufacturing, with nearly 9,500 establishments tied to this sector, more than 150,000 specialized jobs, and operations from eight of the world’s ten leading companies.
Two Complementary Industries, Different Dynamics
Within the health sector, two major industries coexist: pharmaceuticals and medical devices. Although both pursue the same objective—improving people’s health—they respond to very different models of innovation, manufacturing, and commercialization.
The pharmaceutical industry accounts for approximately 70.5% of the national health market, with a value close to US$21.1 billion, while medical devices represent around 21.6%, reaching a market of approximately US$6 billion with a compound annual growth rate of close to 6.3%.
Beyond their size, the two industries create value in different ways. While pharmaceuticals base their competitiveness on molecular research, clinical development, and patents, medical devices rely on engineering, advanced manufacturing, electronics, software, and continuous innovation.
For Mexico, this difference represents a competitive advantage, since many of the capabilities developed in industries such as automotive, aerospace, electronics, and precision manufacturing can be naturally integrated into this value chain.
Why Pay Attention to Medical Devices?
Because few industries combine advanced manufacturing, technological innovation, international trade, and steadily growing global demand.
According to the IDB, global trade in medical devices amounts to US$254 billion, of which Mexico accounts for US$22 billion—equivalent to 8.66% of world exports. In addition, over the past decade Mexican exports grew at an annual rate of 9.1%, more than double the global average, and 64% of that output is destined for the United States.
These results position Mexico as one of the world’s leading manufacturers of medical technology. The next step is to strengthen domestic content, drive technological development, and expand the participation of Mexican suppliers in an industry that offers enormous opportunities for growth and value creation.
A Market With Different Rules
Understanding how this market works is as important as knowing its size.
In medicines, the public sector accounts for approximately 80% of the volume of units purchased, although it represents close to 30% of the market’s economic value. The private sector, by contrast, generates around 70% of the value with barely 20% of the volume.
With medical devices, the logic changes. Approximately 40% of purchases correspond to the public sector and 60% to the private sector, creating a different balance between the two segments.
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Added to this behavior is a third player: households, whose health spending drives demand for medicines, monitoring and rehabilitation devices, and other medical supplies—a trend that will continue to grow with population aging and the rise of chronic diseases.
This dynamic forces companies to adapt their commercial strategies. Serving a market dominated by public tenders is not the same as serving one in which service, innovation, and customer support are decisive factors.
Financial Structure Is Also Part of the Business
There is one aspect that rarely comes up when discussing investment opportunities in health, yet it can determine a company’s success or failure: cash flow.
Private hospitals typically operate with payment terms ranging from 60 to 120 days, while in the public sector these terms can extend from 90 to 180 days, depending on the institution and its administrative processes.
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More than an inconvenience, this reality requires designing different financial models. Working capital, factoring, credit lines, and financial planning cease to be complementary tools and become strategic elements of the business.
A company may have extraordinary technology, but if it is not prepared to withstand the market’s payment cycles, it will hardly be able to establish itself.
Technology Is Redefining the Industry
Innovation is part of the very essence of medical devices. The evolution of engineering, software, connectivity, and artificial intelligence is transforming the way diseases are prevented, diagnoses are made, and medical care is delivered.
This transformation no longer takes place solely within hospitals. Today, some smartwatches are considered medical devices because they can record an electrocardiogram, detect atrial fibrillation, or monitor physiological variables that support clinical decision-making. It is a clear example of how medical technology is becoming increasingly integrated into everyday life.
This evolution also broadens the opportunities for companies in software, electronics, automation, precision manufacturing, specialized materials, and other sectors that can join an increasingly technological and innovative value chain.
Mexico Faces a Historic Opportunity
This technological transformation coincides with a particularly favorable moment for Mexico.
The reconfiguration of global supply chains, the search for suppliers closer to consumer markets, the strengthening of regional production, and new industrial security strategies are leading numerous international companies to rethink where they locate their operations.
Mexico brings together conditions that few countries can offer simultaneously: a privileged geographic location, a broad network of free trade agreements, manufacturing experience, specialized technical talent, and close integration with the North American market.
Above all, however, it has a medical devices industry that has already proven its ability to compete globally. The challenge now is to leverage that position to increase technological development, strengthen domestic supply, and generate greater added value within the country.
From Manufacturing to Innovating
For decades, Mexico has demonstrated that it can manufacture medical devices to the highest international standards. Today, we are one of the world’s leading exporters and a strategic partner for the sector’s global companies. Yet, the next challenge is no longer simply to produce more, but to generate greater value within the country.
Historically, domestic medical devices manufacturing has depended largely on imported inputs. According to INEGI data, around 76.1% of the components used in manufacturing come from abroad, which has meant that domestic content stands at barely 24%. This model made it possible to establish Mexico as a manufacturing powerhouse; nevertheless, it also reveals the wide margin that exists to strengthen domestic supply and develop homegrown technological capabilities.
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It is precisely toward that objective that the new industrial policy strategies are aimed. Plan México sets clear targets for 2030: increase domestic medical devices manufacturing by at least 15%, raise the domestic content of inputs within global value chains by 15%, and ensure that 50% of public procurement comes from domestic production and suppliers. Along the same lines, the new criteria for government procurement encourage purchased goods to incorporate at least 65% domestic content, creating an unprecedented incentive for the development of Mexican suppliers.
These targets send a clear signal to the market: Mexico is seeking to strengthen its domestic integration, develop more of its own technology, and consolidate a more competitive supply chain. For Mexican companies, this represents new opportunities in engineering, specialized manufacturing, components, software, automation, and other high-value-added services.
Mexico has already proven that it can manufacture for the world. The next step is to innovate from Mexico, strengthen its domestic supply base, and generate greater value within the global medical devices value chain.
Look at the Health Sector With New Eyes
The health sector is frequently analyzed from the perspective of public spending or the challenges facing the health system. Yet, it also represents an industry with enormous potential to generate investment, innovation, and economic development.
Medical devices are the best example of that convergence between health and industry. For companies in advanced manufacturing, electronics, metalworking, engineering plastics, software, or automation, this sector offers opportunities ranging from the development of components and digital solutions to specialized supply for a constantly growing value chain.
Mexico already holds a privileged position in global medical devices manufacturing. The next step is to establish ourselves as a benchmark in innovation, technological development, and domestic supply. Achieving this will require more companies, investors, universities, and research centers to see the health sector not only as an essential service, but as one of the industrial engines with the greatest potential for the country’s development.
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