Global Market - Medical Devices

Peru is a fairly large country in the region. The population of the country is 34 million (compared to 11 mn in DR and 17.5 mn in Guatemala). This extreme western country in South America (please see the map) has thick jungles, beautiful Andean mountains, and also the world-famous Machu Picchu, “the lost city of the Incas”, in these mountains. The capital city is Lima. This country’s official language is Spanish.

The economy of Peru is the forty-seventh largest economy in the world based on total GDP. The country also has a high Human Development Index. Post-Covid, the economy was projected to grow at a rate of more than 9%!! Peru is the third largest economy in the region of South America (after Brazil, and Argentina). Interestingly, Peru boasts one of the highest average life expectancies in the region (77 years).

Like most of the other South American countries, Peru has signed several free trade agreements, including the one with China (China–Peru Free Trade Agreement), besides agreements with the United States, Japan, and the European Union. Readers know that these treaties cover almost all the countries that are the major players in the medical devices sector. One interesting and important point is that Peru imports more than 97 percent of its medical devices. This point adds to the attractiveness of the market.

Peru Highlights

• Very high import dependence for medical devices
• Regulatory Framework almost like the other counties
• A large Indian population involved in the healthcare market
• Larger market with better realization

Regulatory Framework and Product Classification

DIGEMID is the regulatory agency for Peru and their website (all contents in Spanish) is www.digemid.minsa.gob.pe/webDigemid/. This webpage has a facility for autotranslation and readers are encouraged to visit and study the webpage for more clarity. Law 29459 (Law of Pharmaceutical Products, Medical Devices, and Health Products) covers the regulatory framework. This Law 29459 describes the document requirements, application evaluation timelines, and surveillance obligations to apply for sanitary registration.

It is generally observed that in a geographical region, medical devices product classifications are almost similar. So, like DR and Guatemala, Peru also has four classes for medical devices.

• Class I : Low risk (and need general controls).

• Class II : Moderate risk (requiring controls during the manufacturing).

• Class III : High risk (and call for controls in design and manufacturing), and

• Class IV : Critical in terms of risk, and special controls in the design and throughout the manufacturing process.

An overseas manufacturer needs to obtain a sanitary registration for the importation, marketing, and distribution of medical equipment and devices in Peru.

Registration certificate is always issued in the name of a local importer or distribution partner since the rules do not allow foreign manufacturers to be the owners of product registrations. A clear legal contract/documentation between the parties is, therefore, recommended.

Peru Medical Devices Market

Different estimates by different market research agencies give the market size between 400 mn to 500 mn USD. The growth rate is estimated at about 6% per year. The readers will immediately realize that the market size is very high on a per-capita basis if compared with other countries in the region (as well as with India). Dependence on imports is very heavy, as stated in the beginning.

For medical devices, the Peruvian market has five buyer segments-

1. Public hospitals which serve 60% of the population. These hospitals fall under MINSA (local health ministry). Mostly, their buying is through open tenders
2. The national social security agency (El Salud). They attend to the rest of the 40% population.
3. The military
4. The police department
5. The private sector

The private sector is growing mainly because of the growing middle class with more disposable income. Because of longer life expectancy, the elderly population is also seen increasing. Such factors make the last segment attractive. Typically, a large distributor has teams that take care of each of these segments. However, the first two are quite important, though highly cost sensitive. The type of products also decides the segment selection for an exporter.

Opportunities and Challenges

A larger market size comparatively, because of the factors listed above, longer life expectancy resulting in the larger elderly population and increasing private market offer a good opportunity. Prioritization for digitization and telemedicine also provides a newer segment opportunity.

The registration process and steps are almost like that in the other counties in the region. An Indian exporter can prepare documents common for more than one country of the region. Like other countries, here also, the challenges could be language and distance.

A very large population of Indians residing in the country (mainly in Lima) can be a good support system. In the healthcare profession, there are many Indian operators. The author had an opportunity to meet many of them during a function of the recent festive season, and their enthusiasm as well as local contacts were found to be quite impressive. These people can be effective and reliable partners and can solve many challenges.