Tuesday 25 January 2022

Medical device companies in the free zone may sell in local market

Decree will facilitate, for example, multinationals to place products made in Costa Rica in the Caja Costarricense de Seguro Social and in private hospitals

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QCOSTARICA – The current 70 multinationals in the medical device sector installed in Costa Rica will be able to sell products in the country, particularly to the Caja Costarricense de Seguro Social (CCSS) and to private hospitals.

The 70 companies in the sector or conglomerate of medical devices now have an agile system to place their products in the local market. Edwards (pictured), for example, manufactures heart valves in Cartago.

This option is opened with a decree that facilitates the process for these companies in the zona franca (free zone) to place products manufactured in the country, in the local market. The possibility was specified by modifying article 81 of the Ley de Régimen de Zonas Francas (Regulation to the Free Trade Zone Law), the Government reported on Monday.

Before the change, free zone multinationals can sell in the local market, but through a long and tedious process to nationalize the goods, which makes it unattractive to do so. For that reason, practically all the firms ruled out marketing their products in Costa Rica.

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This long process was created because free zone companies enjoy tax incentives and, therefore, the intention was to avoid unfair competition with companies that do not have those benefits.

Isaías González, general director of ICU Medical and representative of the companies, explained that the manufacturers preferred, until now, to export their products, for example to Nicaragua, and return them to Costa Rica, due to the cumbersome process.

He described the procedure as unusual, although he considered that when the free zone law was written there was no idea of ​​the increase now achieved by the conglomerates of medical devices in Costa Rica.

However, the impact of the pandemic prompted a specific change in the medical device sector, in order for the Costa Rican health system to take advantage of products manufactured in the country, the statement issued by the Casa Presidencial highlighted. The decree must now be published in La Gaceta for it to take effect.

According to the government report, this change does not modify the tax incentives contained in the law and establishes that the consignee is the distributor or the buyer of the products. This enables a broader umbrella to carry out the nationalization process in the TICA system (Tecnología de Información para el Control Aduanero).

Read more: Electric Cars Tax Benefits Extended

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In addition, the distributor or buyer may request an exemption before the Ministry of Finance to apply the nationalization, as authorized by law.

From Casa Presidencial

At the end of 2019, it was estimated that 436 different medical devices and equipment were exported from Costa Rica for use by patients around the world. The companies here manufacture products for sectors such as neuromodulation, dental, cardiovascular and vascular, surgical devices, ostomy, neuroendovascular, optical, aesthetic, endoscopy, women’s health care, orthopedics, and sports medicine.

Specific products include heart valves, breast implants, needles and catheters, platinum coils for aneurysm care, prostheses and implants, women’s health devices, handles for the removal of polyps and contact lenses, According to information provided, in December 2019, by the Costa Rican Coalition of Development Initiatives (CINDE).

CINDE CEO Jorge Sequeira said the initiative was born thanks to medical device companies to link and strengthen the Costa Rican health sector. “Therefore, it is a great benefit for the treatment of CCSS patients and private hospitals in the country,” he added.

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He added that the effort was made through a joint effort of the ministries of Foreign Trade (Comex) and Finance (through the General Customs Directorate), the Foreign Trade Promoter (Procomer) and CINDE.

“This is an achievement that makes us happy as a sector and that ends several years of struggle. This change modifies the incongruity that made it impossible for the Fund or any hospital to enjoy the world-class product that is generated in the country. Our interest as a sector has always been to collaborate with the national health system and that it represents an enormous cost facility for them,” said González.

According to the government statement, from now on, the task of multinationals will be to open channels with the CCSS and private hospitals so that they can use the quality and innovative product that is produced in the country.

“Costa Rica is a leader in innovation, we are manufacturers of medical devices with state-of-the-art technology and the highest quality with worldwide recognition. It is essential that our health system take advantage of these products, which in addition to guaranteeing the population their right to health, encourages more companies to continue betting on the human capital that is developed in our country,” said the President of Costa Rica, Carlos Alvarado, when signing the decree on Monday.


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