Trends and segments for medical devices in the EU market

EU healthcare: stricter reimbursement policies

• Important changes have also taken place in the reimbursement policies of several EU Countries for medical products. As a result, the governments and insurance companies demand hard evidence of the product’s value or otherwise will not reimburse the medical device. In this respect, products that are easy to use, quality conscious, and price competitive and that benefit the consumer the most are most likely to have the best opportunities in the EU.

• Important factors that determine whether a new technology or medical product will apply for reimbursement depend on whether it will provide in the following needs :

• More treatments can be done in the same time;

• Shorter recovery time, less night overstays in hospital;

• Elimination of the need for other medical procedures;

• Early diagnosis that makes treatment less costly and more effective;

• Improved quality of life;

• Less pain and suffering for the patient

• Generally, insurance companies together with the medical specialist organisations decide whether a product will be covered by insurance.

• Medical devices that significantly increase efficiency and quality of life have good chances of being reimbursed. Although reimbursement policies differ from country to country in the EU, the fundamental dynamics of all reimbursement systems are the same.

• Therefore, if a set of questions is drawn up to assess the reimbursement potential for a product in the UK, the answers will do for Germany and Spain as well.

Production : innovation plays a leading role

• Innovation has played a key role in the medical device industry in recent years. Not only EU producer’s aim at increasing their turnover, they also try to meet the need for more efficient technologies at lower costs. Examples of innovations that have created new market opportunities include :

• Development of minimal invasive surgery by endoscopic techniques.

• Integration with existing IT-systems used by healthcare facilities.

• Application of nanotechnology to apply coatings.

• Replacement of traditional latex by low protein latex, medical grade plastics or silicone rubber.

• The impregnating of antimicrobial agents into medical devices.

• Another development is the increased integration of the medical technology and pharmaceutical sector. An example is a drug eluting stent. This is a combination of a tube inserted in the bloodstream (stent) and a medicine that is gradually emitted to the surrounding tissue to combat the narrowing of blood vessels.

Production: growing attention for green

• Over the last decade awareness of sustainability issues has grown among governments, industries and consumers.

• In the Netherlands, for example, a programme has been developed for sustainable purchasing by governmental organizations that includes several medical appliances. The EU, as well as national governments, has taken initiatives towards more stringent environmental legislation also for the medical industry.

• Since a few years, legislation regarding the waste and disposal of electronic products (WEEE) is also covering medical devices (also refer to ‘Compliance with EU buyer requirements for medical devices’ for more information on WEEE).

Production : industry structure and characteristics

• Local production represents about 60-80% of demand for medical devices in the EU. The balance is imported from countries outside the EU; mainly from developed countries such as the USA, Switzerland and Japan.

• Consolidation has been the key trend in the medical devices industry; the top five companies in the EU represent nearly 60% of the market.

• EU producers have been increasingly working together on a global scale in order to increase their competitiveness and to realize cost reduction.

• Despite the market power of the 5 largest producers, the EU counts a total of 11,000 medical device producers, 80% of them being small- to medium sized companies.

Small and large companies join forces

• A major characteristic of the EU industry is the cooperation between small medical devices producers and large multinationals. For example, sometimes small firms do not have the financial resources to get ‘proof data’ for their innovations.

• In such a case, an acquisition by a larger company with sufficient financial resources can be necessary to bring new products to market. Larger firms receive the benefit of the new technology and, therefore, maintain market share, while small firms can afford to continue to produce and get the financial resources of the large company to continue product development.

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