Why this is important to Wisconsin businesses: The Costa Rican government recognizes approval by the U.S. Food and Drug Administration, streamlining the path for U.S. exports into the market.
Costa Rica offers a steady and fast-growing market for medical equipment. This is due to an aging population, a system of high-quality universal health care, and a growing number of retirees from industrialized countries that spend part or all of the year in the country. Demand for medical equipment in Costa Rica is expected to grow as the public health care system, which represents 90 percent of the market, continues replacing obsolete equipment in virtually all categories.
As a prerequisite to exporting to Costa Rica, U.S. companies must register with the Ministry of Health. As part of the registration requirements, a foreign company must have a Costa Rican representative or distributor to legally represent its products.
The market size for medical equipment and supplies has grown steadily over the past several years. In 2015, the market size was $141 million. In 2016, it grew to $150 million, an increase of approximately 6.8 percent. In 2017, the market grew to $162 million, and for 2018, predictions call for growth to $175 million. The average annual growth rate for this period was an impressive 7.5 percent. The U.S. is the largest exporter of medical equipment to Costa Rica, with $76 million in 2017 and a projected $83 million in 2018. This volume represents a market share of approximately 45 to 50 percent of total Costa Rican medical equipment imports. Major competitors to the U.S. in medical equipment are Germany, China, Switzerland and Japan.
The Costa Rican Ministry of Health accepted a petition submitted by the U.S. Embassy in San Jose to recognize U.S. Food and Drug Administration (FDA) authorizations of medical devices to be sold in the U.S. market as permissible for sale in Costa Rica without additional evaluation by the Costa Rican government. This decision will benefit U.S. exporters of medical devices. Since medical devices shipped from the U.S. will no longer be required to undergo additional clinical trials or obtain additional documentation (except for a Certificate to Foreign Government, issued by the FDA, stating that the product is sold freely in the U.S. market and the plant follows approved manufacturing practices), U.S. exporters will enjoy lower cost to market and significantly faster time to market.
Registering a new product takes about four months once all documentation is submitted to the Ministry of Health. In the case of pharmaceuticals, it takes 12 to 18 months to register a product once documentation is submitted.
To date, more than 250 manufacturing companies, of which more than 70 are medical device producers, have established operations in Costa Rica. The country has emerged as a leading location globally, outside of Europe, for health technology investment, and ranks seventh globally in terms of the number of manufacturing projects, ahead of the Netherlands, Brazil and Mexico. Costa Rica is now the second-largest exporter of medical devices in Latin America and among the top seven suppliers to the U.S. market (source: CINDE).