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Medical devices are a key part of to the International Diabetes Federation (IDF), 11.4% of the US population has diabetes and approximately a quarter of this patient group are undiagnosed. Meanwhile, the number of new cases of cancer in the US is forecast to increase from 1.6mn in 2012 to 2.1mn in 2025, according to Globocan.modern healthcare, and medical equipment manufacturers are crucial players within the healthcare system value chain, working especially closely with
universities, research institutions, clinics, hospitals and pharmaceutical companies.
According to a recent report by Markets to the International Diabetes Federation (IDF), 11.4% of the US population has diabetes and approximately a quarter of this patient group are undiagnosed. Meanwhile, the number of new cases of cancer in the US is forecast to increase from 1.6mn in 2012 to 2.1mn in 2025, according to Globocan.& Markets, the global refurbished medical devices market is expected to reach USD 11.91 billion by 2021, at CAGR of 12.7% from 2016 to 2021.
Within the product categories, the medical imaging equipment segment was estimated to hold the largest share of
the refurbished medical equipment market in 2016.
According to a blog post by TforG.com (an IQVIA company) titled Sustainable Medtech: An overview of the Refurbished Medical Equipment Market, a key factor to the refurbished medical device market is the matter of regulation.
Ironically, according to the blog, many of the lower income nations categorically inhibit the entry of refurbished or used products, through stringent or impeding regulations. Meanwhile, many high-income nations - who have the most advanced medical equipment already - are also setting forth regulatory frameworks to optimize the entry of refurbished products.
The blog continues: “Arguably, the lesser developed nations perhaps do not have the administrative and technical resources to ensure a quality control system and therefore avoid the market altogether. Nonetheless, the fact that refurbished equipment can be 100% equivalent to its identical un-used version, yet at a price 20-60% lower than the original price, make it the optimal solution to underdeveloped, under-resourced national healthcare
TforG.com identifies the following as key factors and drivers shaping the refurbished
TforG.com also highlights certain challenges to the prevalence and global growth of refurbished medtech markets:
US market dominance
According to a report by Fitch to a blog post by TforG.com (an IQVIA company) titled Sustainable Medtech: An overview of the Refurbished Medical Equipment Market, a key factor to the refurbished medical device market is the matter of regulation.Solutions, the US will remain the world's largest market for medical devices, accounting for around two-fifths of the global market Fitch Solutions forecast and project that the medical device market will register a 2017-2022 CAGR of 5.1%, which will take the value to USD198.5billion.
However, US medical device exporters will be faced with a tougher environment in 2019 as global trade is affected by a slowdown in the US economy and ongoing tensions over tariffs. This gives rise to the refurbished medical device market in which North America dominates the global market, due to the high incidence of various diseases, such as cardiovascular disease and cancer, which is a favorable regulatory scenario for the use and sale of refurbished devices.
The USA is currently home to many of the largest refurbishing companies:
Who regulates the refurbished medical devices market in the US?
The FDA's Center for Devices and Radiological Health (CDRH) is responsible for regulating firms who manufacture, repackage, relabel, and/or import medical devices sold in the US. In addition, CDRH regulates radiation-emitting electronic products (medical and non-medical) such as lasers, x-ray systems, ultrasound equipment, microwave ovens and color televisions.
An overview of current Latin American markets and regulations for refurbished product importation:
Argentina. Refurbished products (produced in country of origin or in Argentina) require technical assessment certificate approved by Argentine Embassy or Argentine Consulate in export country, or certificate from original manufacturer
According to US Department of Commerce’s Export.gov, until 1994, Argentina prohibited the importation of used or refurbished medical equipment. Restrictions on imports of used medical equipment are established by Resolution 909/94, Annex II and III of Resolution 748/95, and by Resolution 235/99.
This legislation stipulates the following:
1) Refurbished goods must be accompanied by a certificate issued by the originalmanufacturer, or by a technical assessment certificate, authenticated by the Commercial Section of the Argentine Embassy or local Consulate.
2) Refurbishment may be done in Argentina by the importer, provided he is the end user. These goods may not be resold.
3) The foreign vendor must ensure the availability of after-sales service and spare parts, provide user’s manuals, and have an agent based in Argentina to implement servicing required.
4) Used equipment may not be older than ten years.
Taxation and Duties
Because Argentina belongs to the Latin America trade bloc, Mercosur, all imported medical devices are taxed according to the Mercosur Common External Tariff (AEC). This tariff designates the tax rate, which may range from 0% to 16%. In the case of importing refurbished medical devices, the tax rate ranges from 0% to 24%. When a product is purchased, there is a value-added tax (VAT) equal to 10.5% for new medical devices and 21% for all used or refurbished devices. VAT values are dependent on Cost, Insurance, and Freight (CIF) value.
Brazil. Refurbishment allowed domestically only
Export.gov highlights that Brazilian regulations are strict in relation to pre-owned medical products. Products must be refurbished by OEM, using original spare parts and having the same performance and guarantee as new equipment. Resellers of used equipment have very limited market access in Brazil.
Chile. Little restrictions
According to IAMERS, importation of used/refurbished medical equipment is allowed, however, market potential is limited and maintenance and technical service may be an issue.
Colombia. Various requirements, stringent regulations
Ecuador. Warranty obligated, and only allowed for private sector procurement
Importation is only allowed in private clinics and hospitals, estimated to occupy 30% of the market. Any used equipment must be refurbished and have at least a one year warranty, according to IAMERS.
Guatemala. No restrictions. FDA or CE certifications preferred
Mexico. End-users can import without restrictions. Resalers are restricted
According to IAMERS, Mexico has a strong market for refurbished medical equipment when it is accompanied by a warranty and technical support.
Peru. Limited imports allowed, only by physicians for their own use
IAMERS highlights that no importation of used and refurbished medical equipment is allowed. Only physicians requiring equipment for their own use will be permitted to import one type of equipment per year.
Uruguay. Registration required with a local company and approval by MoH. Technical documentation of refurbishment required
IAMERS confirms that imports of refurbished medical equipment are authorised in Uruguay. All medical equipment, new, refurbished and/or recycled need to be registered by a local company and approved by the Ministry of Public Health prior to importation. Refurbished equipment needs to have a Technical/Refurbishing Protocol (full contact information of the company which refurbished the equipment must be provided).
Venezuela. Only allowed in private sector
According to the IAMERS, importation is allowed, but Government organisations, who are one of the major buyers, are not allowed to purchase them.
What are the major factors driving growth in the refurbished medical equipment market in LatAm and North America?
“As a seller of capital equipment, we provide refurbished radiation oncology and diagnostic imaging equipment throughout the Americas. Cost of equipment is the key factor driving the growth of refurbished equipment in both North and South America." - John V. Vano, President, Radio Oncology Systems
“For Soma Technology, one of the biggest drivers driving growth in the refurbished medical market place is the large consolidation among the IDNs and the excessive cost of the new devices being brought to the market by the large OEM. For Soma, when you buy from a large reputable source that is ISO 13485:2016 certified you get the best of both worlds. You get the latest refurbished equipment with the same parts and labour warranty and aftermarket support at a fraction of the cost."- Peter Leonidas, President & CEO, Soma Technology, Inc.
"The top two factors driving growth in the refurbished medical equipment are heightened awareness and consumer confidence. Internet marketing, social media, and word-of-mouth referrals combine to drive awareness of the many benefits of refurbished equipment."- Kary L. VanArsdale, Ed.D., Director of International Sales, Avante Health Solutions