CAJICA, Colombia – The tiny Central American country of Costa Rica continues to cement its position as Latin America’s med-tech powerhouse after experiencing double-digit growth in exports in the first two months of the year, according to data released by Procomer, the country's exports promotion agency.
“These numbers become more relevant when detailing that medical devices and precision equipment represent, for the third consecutive year, the country's main export, which had double-digit growth of 23%, thus representing 36% of the exports of the country,” the Costa Rican government said.
During January and February, Costa Rica´s med-tech exports accounted for 36% of all exports. The surge during the first two months of 2021 compared to the first two months of 2020, right before the COVID-19 pandemic hit, translate to an increase of about $138 million, according to Procomer.
“Costa Rica's leadership at the Latin American and global levels in exports of precision equipment and medical equipment is a reflection of the strategy of commercial opening and diversification of exports of many years,” Andrés Valenciano, Costa Rica’s minister of foreign trade, told BioWorld.
Costa Rica, with a population of about 5.1 million, is the second largest med-tech producer in Latin America after Mexico, which has a population of almost 130 million. In third place is another small Central American country, Dominical Republic. These three countries account for 95.5% of all med-tech exports from the region.
Costa Rica is the 14th largest med-tech exporter in the world, accounting for 2% of global exports in the space. Comparatively, Costa Rica exports roughly the same as Canada.
“The accumulated figure for the first two months of the year shows us that the country is heading towards a recovery in the export sector. Although we still have challenges ... the figures motivate us to redouble our efforts and bring this dynamism to all the productive sectors of the country,” said Valenciano.
The COVID-19 pandemic has proven to be a big driver of growth for Costa Rica’s med-tech exports, said Alicia Marin, a partner at RA Costa Rica, a life sciences and regulatory affairs consultancy.
“The magnitude of the growth of med-tech exports out of Costa Rica is due to many reasons ... the pandemic itself is and has been a source of awareness at the population level of the importance of taking up health issues and therefore increases consultations at the hospital level and also the interventions that this represents,” Marin told BioWorld.
“On the other hand, the pandemic has made hospitals and health sectors require a greater number of certain types of specialized equipment in the cardiac area and in the respiratory area, and the industry related with these manufactures is growing, and some of those manufacturers are installed here in our country,” she explained.
The Costa Rican government said the country controls 24% of all med-tech production in the region, is home to several original equipment manufacturers (OEMs) and about 70 med-tech companies.
“[Costa Rica] currently houses six of the 10 most important medical device companies, managing to generate, with a cut-off at the end of 2020, 38,248 jobs,” the government said. Of those, 8,000 are new jobs created over the past year.
Companies like Boston Scientific Corp., Edwards Lifesciences Corp., Philips NV and Abbott Laboratories have manufacturing operations in the country.
“These companies, in addition to their manufacturing operations, have found in Costa Rica the ideal conditions to bring their service operations, which helps us in this strategy of diversification of our exports and at the same time in the possibility of generating employment in different areas and different sectors, generating more opportunities for more Costa Ricans,” said Valenciano.
Valenciano said the med-tech industry is a good one for the country. It is knowledge-intensive and allows for the development and specialization of talent while generating high-value training.
Marin said the country offers important advantages, including a high educational level of the population.
“The majority of people and national Costa Ricans have a university degree and these industries are precisely looking for people who have this type of degree as well as the command of the English language, in order to be able to hold conversations or understand technical material issued by the headquarters of those multinational companies,” she said. “I think that the high technical educational level is of great importance for Costa Rica as well, and it is one of the reasons why Costa Rica is in the first places of the countries with important med-tech factories.”
Costa Rica’s main med-tech exports are led by diagnostics equipment, followed by therapeutic equipment and medical and surgical instruments.
A flexible regulatory framework helps.
“We have some laws that greatly protect the free zones where these industries are installed, which exempts them from certain regulatory requirements such as healthcare licenses issued by the Ministry of Health for those devices that are going to be exported and are not going to be sold here,” Marin said.
According to the United Nations Economic Commission for Latin America and the Caribbean, the region is in a good export position in med tech, in great part thanks to multinational companies “with the case of Mexico, Costa Rica and the Dominican Republic standing out.”
“If everything continues to be like this, with these streamlining of the government, with the high level of education, with investment in education that the country makes, with the advantages of free zones, with the exemption of some taxes, which is attractive for the companies, I think that what we have to expect is even greater growth for the med-tech sector,” said Marin.