Guest Column | August 20, 2021

Argentina's Thriving Medical Device Market Amid An Economic Plunge

By Julio G. Martinez-Clark, CEO, bioaccess

web3_iStock-1257479032

At present, there are more than 10,000 medical devices in the world.1 Countries must uphold patient safety as a priority and guarantee access to high-quality, safe, and effective medical devices.2,3 The medical device market in Latin America keeps growing at a significant annual rate. Latin American and Caribbean countries import more than 90 percent of the medical devices they need since local production supplies less than 10 percent of their total needs.

Argentina is the second largest country by area in Latin America after Brazil. With an approximate population of 49 million people, it is the fourth most highly populated country of the region4 and the third biggest economy, outdone only by Brazil and Mexico, with a gross national product (GNP) of approximately $450 billion. The per capita income of Argentina is $22,140 a year, representing one of the highest in Latin America.5

This article aims to describe the Argentine healthcare system and the capacity of its hospital network. Additionally, it analyzes the organizational, functional, and regulatory characteristics of the Argentinian regulatory framework for medical devices and its relationship with the Mercado Común del Sur (Common Market of the South, Mercosur). Lastly, it concludes with the business opportunities and challenges that the Argentine device market currently represents, considering its macroeconomic and social conditions.

Argentina’s Healthcare System

The Argentinian healthcare system has three sub-systems: public, social security, and private. The public sector comprises the national and provincial ministries, and the network of public hospitals and health centers that offer free healthcare to whoever asks for it, essentially people not eligible for social security and unable to pay for it. Fiscal revenue funds the public healthcare sub-system, and it receives periodic payments from the social security sub-system to provide services to its affiliates.

The social security sub-system is mandatory and centers around “obras sociales” (group health plans, OS), ensuring and providing healthcare services to workers and their families. Contributions from workers and their employers fund most OS, and they operate through contracts with private providers.

The private sub-system comprises healthcare professionals and healthcare facilities treating higher-income patients, beneficiaries of OS, and private insurance holders. This sub-system also includes voluntary insurance companies known as “pre-paid medicine” insurers. Through insurance premiums, individuals, families, and employers fund pre-paid medicine insurers.7 Argentina’s public hospitals comprise 51 percent (approximately 2,300) of its hospitals, making it fifth among Latin American countries with the most public hospitals. The ratio of hospital beds is 5.0 beds per 1,000 inhabitants, which exceeds even the mean value for the Organization for Economic Cooperation and Development (OECD) countries, which is 4.7. Also, the proportion of doctors in Argentina is one of the highest worldwide, with 4.2 per 1,000 inhabitants, exceeding the mean value for the OECD of 3.5 and European countries such as Germany (4.0), Spain, and the United Kingdom (3.0). 8

Medical Device Regulatory Framework

The Pan American Health Organization (PAHO) ranks Argentina’s National Food, Drug, and Medical Technology Administration (ANMAT) as a level four regulatory authority, meaning that it is comparable to the US FDA. ANMAT is responsible for monitoring and guaranteeing the drugs, foods, and medical devices are effective, safe, and of high quality. ANMAT regulates the authorization, registration, regulation, monitoring, and fiscal aspects of medical devices throughout the national territory9 using a risk-based classification system similar to that used in the European Union and Canada. ANMAT uses a risk-based classification in which it categorizes medical devices into four classes according to their potential risk: Class I - lowest risk; Class II - moderate risk; Class III – high risk; and Class IV - very high risk. Any foreign manufacturer wishing to market medical devices in Argentina must designate a local representative responsible for submitting the documents requested for the registration process.

In line with applicable regulations in force for registering a medical device, the manufacturer must have a local office or distributor registered with the Argentine Ministry of Health to comply with best manufacturing practices (BPM). For Class III and IV medical devices, manufacturers must submit clinical trial results demonstrating the safety and efficacy of the device. ANMAT has a time frame of 110 working days to assess the documentation and issue the corresponding authorization; for Class I and II medical devices, ANMAT has 15 working days to evaluate and approve. Registration of a medical device remains valid for five years, and manufacturers can renew it 30 days before it expires. Amendments to the ANMAT registration certificate for Class III and IV products have a simple inscription mechanism through a compliance declaration, with answers provided within 15 working days. Manufacturers must also provide a complete history of the device’s prior marketing in other countries.10

Since Argentina belongs to the Mercado Común del Sur (Mercosur) – the trade block made up of Argentina, Brazil, Paraguay, and Uruguay – all imported medical devices are taxed in line with the Mercosur Common External Tariff (CET). The tax rate ranges from 0 to 16 percent. In the case of importing reconditioned medical devices, the tax rate ranges from 0 to 24 percent.10

ANMAT has two post-marketing control programs:11    

  • A technovigilance program that monitors notifications of adverse effects
  • A national monitoring program for falsified or adulterated products

Economic And Business Outlook

The impact of the COVID-19 pandemic has been significant in Argentina.12,13,14,15,16 In 2020, the country witnessed a 9.9 percent drop in its gross national product, the biggest fall in 10 years. Still, in 2021 the domestic economy shows significant macroeconomic imbalances: annual inflation was a whopping 36 percent in 2020, despite government price controls.6 Despite high inflation and a bad economy, in 2020 Argentinian hospitals increased their purchases of essential and highly specialized medical equipment. The increases in purchases of specialized medical equipment in 2020 compared with 2019 were:17

  • Hemodialysis machines: +15.1 percent
  • Magnetic resonance machines: +14.9 percent
  • Linear accelerators: +10.7 percent
  • Angiography devices: +8.2 percent
  • Gamma cameras: +6.2 percent
  • Fluoroscopy devices: +5.1 percent
  • C arms: +3.5 percent

The increases in purchases of essential medical equipment in Argentine hospitals for the same 2019–2020 time frame were:17

  • Patient monitoring systems: +16.8 percent
  • Infusion pumps: +6.8 percent
  • Anesthesiology devices: +6.5 percent
  • Ventilators: +4.9 percent
  • Ultrasound machines: +4.9 percent
  • Electrocardiography monitors: +2.5 percent

It is interesting to see that in 2020, several categories of expensive medical equipment increased in Argentina compared with 2019, particularly in a year when surgical procedures requiring these devices were canceled or postponed due to COVID-19. Projections for 2023 indicate increases in the compound annual growth rate (CAGR) for the following specialized medical equipment:17   

  • Hemodialysis machines: +11 percent
  • Magnetic resonance machines: +11 percent
  • Linear accelerators: +9 percent
  • Angiography devices: +9 percent
  • Gamma cameras: +15 percent)
  • Fluoroscopy devices: +27 percent
  • C arms: +7 percent

Conclusion

Argentina is a country with a mixed healthcare system, with state-regulated public and private healthcare service providers. Its medical device market offers excellent business opportunities because Argentina imports virtually all the medical products it needs. Despite strict currency controls, high inflation, and low foreign investment,18 the current high demand for imported essential and specialized medical equipment, a reasonable regulatory approval timeline, the high level of academic training of Argentine healthcare professionals, and the country’s remarkable hospital capacity make Argentina an attractive destination for medical device manufacturers looking to expand their footprint in Latin America.  

References

1.        Organización Panamericana de la Salud. Regulación de dispositivos médicos [Internet]. 2021 [cited 2021 May 17]. Available from: https://www3.paho.org/hq/index.php?option=com_content&view=article&id=3418:2010-medical-devices-regulation&Itemid=41722&lang=es

2.        Comisión Económica para América Latina y el Caribe (CEPAL. Las restricciones a la exportación de productos médicos dificultan los esfuerzos por contener la enfermedad por coronavirus (COVID-19) en América Latina y el Caribe [Internet]. 2020. Available from: https://repositorio.cepal.org/bitstream/handle/11362/45510/1/S2000309_es.pdf

3.        Organización Panamericana de la salud. Dispositivos médicos [Internet]. 2021 [cited 2021 May 17]. Available from: https://www.paho.org/es/temas/dispositivos-medicos

4.        Datos macro. Argentina: Economía y demografía [Internet]. 2021 [cited 2021 May 17]. Available from: https://datosmacro.expansion.com/paises/argentina

5.        Statista. Producto interno bruto por país en América Latina y el Caribe en 2020 [Internet]. 2020. Available from: https://es.statista.com/estadisticas/1065726/pib-por-paises-america-latina-y-caribe/

6.        The World Bank. The World Bank in Argentina [Internet]. 2021. Available from: https://www.worldbank.org/en/country/argentina/overview

7.        Belló M, Becerril-Montekio VM. Sistema de salud de Argentina. Salud Publica Mex [Internet]. 2011;53:96–109. Available from: http://www.scielo.org.mx/scielo.php?script=sci_arttext&pid=S0036-36342011000800006

8.        Corpart G. Latinoamérica es uno de los mercados hospitalarios más robustos del mundo. Global health intelligence [Internet]. 2018; Available from: https://globalhealthintelligence.com/es/analisis-de-ghi/latinoamerica-es-uno-de-los-mercados-hospitalarios-mas-robustos-del-mundo/

9.        Anmat, Ministerio de salud de Argentina. ANMAT elegida por OMS como sede para concluir el desarrollo de la herramienta de evaluación de sistemas regulatorios [Internet]. 2018. Available from: http://www.anmat.gov.ar/comunicados/ANMAT_sede_evaluacion_OMS.pdf

10.      RegDesk. An Overview of Medical Device Regulations in Argentina [Internet]. 2019. Available from: https://www.regdesk.co/an-overview-of-medical-device-regulations-in-argentina/

11.      Coordinador de la Comisión de Tecnología Médica de la Sección de Farmacéuticos. Productos médicos: normativas sobre habilitaciones, registro y trazabilidad [Internet]. 2021 [cited 2021 May 18]. Available from: http://www.cofybcf.org.ar/noticia_anterior.php?n=1805

12.      Ortiz-Barrios M, Gul M, López-Meza P, Yucesan M, Navarro-Jiménez E. Evaluation of hospital disaster preparedness by a multi-criteria decision-making approach: The case of Turkish hospitals. Int J Disaster Risk Reduct [Internet]. 2020 Jul;101748. Available from: https://linkinghub.elsevier.com/retrieve/pii/S221242092030354X doi: 10.1016/j.ijdrr.2020.101748

13.      Clemente-Suárez VJ, Navarro-Jiménez E, Jimenez M, Hormeño-Holgado A, Martinez-Gonzalez MB, Benitez-Agudelo JC, et al. Impact of COVID-19 Pandemic in Public Mental Health: An Extensive Narrative Review. Sustainability [Internet]. 2021 Mar 15;13(6):3221. Available from: https://www.mdpi.com/2071-1050/13/6/3221 doi: 10.3390/su13063221

14.      Clemente-Suárez VJ, Hormeno-Holgado AJ, Jiménez M, Agudelo JCB, Jiménez EN, Perez-Palencia N, et al. Dynamics of Population Immunity Due to the Herd Effect in the COVID-19 Pandemic. Vaccines [Internet]. 2020 May; Available from: https://www.mdpi.com/2076-393X/8/2/236 doi: 10.3390/vaccines8020236

15.      Romo A, Ojeda-Galaviz C. It Takes More than Two to Tango with COVID-19: Analyzing Argentina’s Early Pandemic Response (Jan 2020–April 2020). Int J Environ Res Public Health [Internet]. 2020 Dec 24;18(1):73. Available from: https://www.mdpi.com/1660-4601/18/1/73 doi: 10.3390/ijerph18010073

16.      Bolaño-Ortiz TR, Puliafito SE, Berná-Peña LL, Pascual-Flores RM, Urquiza J, Camargo-Caicedo Y. Atmospheric Emission Changes and Their Economic Impacts during the COVID-19 Pandemic Lockdown in Argentina. Sustainability [Internet]. 2020 Oct 19;12(20):8661. Available from: https://www.mdpi.com/2071-1050/12/20/8661 doi: 10.3390/su12208661

17.      Corpart G. En Argentina en 2020, se dispararon las cantidades de equipos médicos especializados [Internet]. 2021 [cited 2021 May 17]. Available from: https://globalhealthintelligence.com/es/analisis-de-ghi/en-argentina-en-2020-se-dispararon-las-cantidades-de-equipos-medicos-especializados/

18.      Otaola J, Bianchi W. Argentina economic plunge eases in fourth quarter; recession marks third year. Reuters [Internet]. 2021; Available from: https://www.reuters.com/article/us-argentina-economy-gdp-idUSKBN2BF1DT

About The Author:

JulioJulio G. Martinez-Clark is co-founder and CEO of bioaccess, a market access consultancy that works with medical device companies to help them do early-feasibility clinical trials and commercialize their innovations in Latin America. Julio is also the host of the LATAM Medtech Leaders podcast: A weekly conversation with Medtech leaders who have succeeded in Latin America. He serves as an advisory board member for Stetson University's Leading Disruptive Innovation program. He has a bachelor's degree in electronics engineering and a master's degree in business administration.