How will Brexit affect Europe’s medical device industry?

After the United Kingdom’s vote to leave the European Union, uncertainty has become the norm. Erik Vollebregt, a founding partner of life sciences law firm Axon (Amsterdam), writes on his medicaldeviceslegal website that medical device companies are asking him “what this means for CE marks for medical devices and for the process of the [new medical device and in vitro diagnostics regulations] as well as medical device law and policy in the EU, in general.”

Source: plasticstoday

It’s unlikely that the so-called Brexit will have any impact on the new medical device and in vitro diagnostics regulations (expected to be adopted by the European Council and Parliament this year). “The EU will certainly not suspend the project because of the Brexit because the texts were established following the normal legislative procedure. The texts will enter into force in the EU as planned and may also take effect even in the UK, up until the date on when the UK formally disengages from EU law,” writes Vollebregt.

The United Kingdom still has to trigger Article 50 of the Lisbon Treaty, formally starting the process of withdrawal from the European Union. Until that happens, nothing changes. Even when the UK government pulls the trigger, “the law calls for a two-year process, and the adoption of the new medical device and IVD regulations will be well underway at that point.”

The main question across the globe is what type of relationship the United Kingdom will have with the European Union after it pulls out: one possible outcome is the signing of a mutual recognition agreement along the lines of the treaty that Switzerland has with the EU. “That agreement allows Switzerland to have notified bodies and provides for mutual recognition of the CE mark,” notes Vollebregt.

For the time being, until the final breakup, “British legislation remains fully aligned with European rules and CE marked products can move freely across the Channel.”

No one really knows where this uncertainty is heading – causing a lot of headaches throughout the global manufacturing, business and financial communities.

Arab Health and Brazilian Health Devices: Numbers and Results

Arab Health happened in January 26-29, 2015. 42 Brazilian companies participated at the event supported by the project named Brazilian Health Devices, which is promoted by the Brazilian Industry Association of Medical Equipment, Dental, Hospital and Laboratory (ABIMO) and Brazilian Agency for Export and Investment Promotion (Apex-Brasil).

            According to ABIMO, Arab Health is now known to be the second biggest healthcare trade fair in the world and the biggest in the Middle East. There were more than 4 thousand exhibitors, 120 thousand guests from more than 150 countries. The bottom line is Brazilian companies were not doing business exclusively with the Middle East, since the fair has become a global networking venue. The companies are expecting a US$ 21 million in business as a result of the fair.

References: http://www.abimo.org.br/modules/news/article.php?article_id=529

According to the Industry, the FDA has remarkably improved

PricewaterhouseCoopers (PwC) released a report last month showing the healthcare industry’s perception of the Food and Drug Administration (FDA). Following what was heard and seen during the annual conference of AdvaMed last October, the report demonstrated that 78% of the life science industry executives believe that "the FDA has improved the quality and frequency of its communication in the past two years." Entitled "FDA and Industry: A recipe for collaborating in the New Health Economy," the report interviewed 100 senior executives from the healthcare industry.

The FDA improved in several ways. The great majority of the executives responded that the agency provided actionable feedbacks and offered more "applicable guidance, rules and regulations”. Another interesting point showed by the report is the direct correlation between participating in meetings with the FDA at key moments during clinical development or before submitting an application and how good the relationship is between the agency and the healthcare companies.

References: http://www.mddionline.com/blog/devicetalk/its-official-industry-finds-fda-greatly-improved-1-26-15

Important Key Points to Keep in Mind about Consumerisation Strategies

During the BIOMEDevice San Jose 2014, Andrew Atwell, principal at Samsung Open Innovation Center, stated his concerns about consumerization issues in the healthcare sector. According to him, there are four key trends that medical devices companies should keep in mind.

First of all, and following other sectors: free data. Not only gathering health information, but sharing it between devices. These data, however, must provide and  convert it into relevant actionable information. Another important fact pointed out by Andrew Atwell is the importance of releasing the information in real time. According to him, in medical labs there are still many paper-based results that are manually entered by a lab tech. “The doctors should be able to see the data immediately at a patient’s bedside or on the golf course,” Atwell said. Doing so, patients would properly follow protocols after leaving hospitals and it would prevent readmissions. The last concern stated by Atwell was about usability. “The traditional form factor of many medical devices has been frustrating for many users.” Both patients and doctors are demanding medical devices and systems that engage users.

References: http://www.qmed.com/mpmn/medtechpulse/4-consumerization-strategies-medtech-need-learn-fast

Middle East and North Africa: Potential Target Markets

Consisting from Mauritania to Pakistan, from Egypt to Iran, these countries have been making huge efforts in order to increase both level and coverage of healthcare, regulate the sector, making it easier to operate and guarantee quality of products to the patients. Despite financial limitations and/or geopolitical instability, the overall trend is positive and sustainable political breakthroughs. Over the last two years, a continued effort to establish regulatory systems in additional countries is steering confidence in the sector.

The value of the medical devices market in Middle East and North Africa is estimated around US$ 4 billion and it’s growing by 5% per year. This heterogeneous market comprises approximately 650 million people with a cumulative GDP of more than US$ 5.2 trillion.

Mecomed is the Middle East and North Africa medical devices and diagnostics trade association.  Established in March 2007, they aim to build and improve the industry image and perception; help in substantially reducing non-compliant business practices; enhance access to key stakeholders; collaborate in critical projects with common interests. For more details, visit www.menamedtechforum.com.

References: http://medtechviews.eu/article/middle-east-and-north-africa-markets-hold-huge-potential-medical-technology-industry

Risk and Challenges of Healthcare Systems Internationalization

Medical device manufacturers have identified “emerging markets” as their principal source of revenue growth in the coming years. However, during the last Economist’s Health Forum in Boston, major academics and industry’s players discussed the risks and challenges associated with rising demands in these countries.

The discussion explored a growing concern that the healthcare model in the United States and Europe isn’t sustainable or even necessary to meet the healthcare needs in many cultures. These nations will need to create a “more of an outpatient-oriented and prevention-oriented delivery system” that will require behavioral changes by physicians and patients.

“(...) replicating a hospital-based system in less-developed nations requires not only new infrastructure, but wholesale change in the behavior and practice of patients and physicians. (...) also demand a financial investment that even Western nations are having difficulty paying(...)” Peter Berman, a professor at Harvard University’s School of Public Health

Victor Joseph Dzau, MD, president of the Institute of Medicine brought an academic, clinical, and corporate perspective. He stated that every culture is different and needs specific solutions. “You won’t succeed unless you are really on the ground and really understand the culture”. Device companies must create local solutions to local problems in order to succeed.

References: http://www.mddionline.com/article/%E2%80%98globalization-not-americanization%E2%80%99-when-it-comes-healthcare-09-22-2014

2014: So far, a great year for the MedTech Industry in the USA

      According to the MedTech Half-Year Review, issued by EPVantage, 2014 has been telling an optimistic story for the medical device sector.

     Some points of this report have to be mentioned: merger and acquisitions stands at US$27.2 billion, compared to US$19 billion of 2013. The report also notes that the value of M&A in 2013 was close to being the lowest in a decade. More merger and acquisitions are to be announced until the end of 2014/beginning of 2015. During the first six months of 2014, medtech venture capital investments stand at US$1.9 billion, less than half of the US$3.9 billion raised in all of 2013. But second quarter of venture capital investment was up 33% from the first quarter of the year, so the expectations are still high. FDA approvals are also moving very fast. For PMAs, the average review time was 18.4 months compared to the average of 35.9 months in 2013.

References:http://www.mddionline.com/article/5-points-showing-why-medtech-having-great-2014-so-far

Second World Health Organisation’s Global Forum on Medical Devices

The Second World Health Organisation’s Global Forum on Medical Devices took place in Geneva on November 22-24th and gathered together the academia, international organisations, industry and NGOs. While one of the WHO’s strategic objectives is “to ensure improved access, quality and use of medical devices”, during this event the organisation emphasized how important it is to align medical device innovation with the public health need. According to the WHO, there is a mismatch between these two spheres.

      After hearing the stakeholders’ opinion, five insights were listed to help the industry work towards resolving the mismatch: 4 ‘A’s define the agenda to improve access to appropriate medical devices (Availability, Accessibility, Appropriateness, and Affordability); Diagnostics industry contributes to low resource settings beyond Corporate Social Responsibility activities; Bring research and manufacturing to low resource settings; Young entrepreneurs have a good grasp of localisation; Mobile is the way to go.

       To know more about the event, go to  www.who.int/medical_devices/2nd_gfmd/en/ 

References: http://www.medtecheurope.org/blogposts/195/40/blog/2013/12/02/5-WHO-Insights-into-conquering-the-medtech-mismatch

Medtech Companies: Prepare for an Innovation Makeover

A report from PricewaterhouseCoopers’ (PwC) Health Research Institute concludes that Medtech companies must change the way they innovate. In a new economy that rewards better care, innovation is the key if they want to keep adding value to its customer.

The report indicates new alternatives for medtech companies to innovate and become more competitive, outside traditional research and development. The report also shows a survey made with medtech executives, with questions about their innovation activities. PwC analyst suggest a innovation makeover for medtech companies, because customers (either hospitals, accountable care organizations or individual customers) now demand more in financial, convenience and health terms.

“Medtech companies must focus more on service and business model innovations that meet new industry demands rather than on incremental product improvements.”

Besides, the report suggests three ways for medtech companies to innovate: operate as a “lean startup”, new innovation metrics and get closer to the patient.

References: http://www.mpo-mag.com/contents/view_breaking-news/2013-10-24/report-medtech-firms-must-change-approach-to-innovation/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%253A+MPOBreakingNews+%2528Medical+Product+Outsourcing+Breaking+News%2529

Emerging Markets: Brazil and the Medical Device Industry

Since the 2008 crisis that took place mainly in the United States and Europe, it’s been said a lot about the opportunities in emerging countries. But one shall be careful when analyzing these markets and try to evaluate its potential as objectively as possible.

        When it comes about Brazil and the medical device industry, some challenges one may face when trying to approach this market. Some of them are the bureaucracy, strong regulatory system added to long timelines and delays, high taxes and a structure that varies according to the product which makes hard to know in advance how much the price will be for the final customer.

        However, when you overcome the language and the cultural barriers, it is all worthwhile because Brazil is a huge market, with more than 190 million people, a large public healthcare system which represents 4.1% of its GDP, a US$4 billion in imports and US$700 million in exports of medical devices.

References: http://www.emdt.co.uk/article/medical-devices-brazil-oportunity?cid=nl.emdt03

Brazilian Healthcare Market 2012: a retrospective

    As an innovative industry, the Brazilian healthcare industry exports to more than 180 countries and generates around 100 thousand jobs in the national territory. The sector is considered an important component in the Brazilian economy. And so, it is important to analyze its updated market numbers.

   ABIMO is the Brazilian Healthcare, Medical and Dental Equipment Industry Association. It releases healthcare market numbers every year. One can access some of the 2012 statistics in ABIMO’s official webpage. There are information about the healthcare national production value, productivity, investment, international trade, national production and demand, Brazilian taxes, etc. Some indicators draw more attention than others. The “healthcare national production value” is one of them, as it reached almost R$5 billion (more than US$2.17 billion) last year. “Investments” is as well an important indicator and it represented more than R$300 million (more than US$130 million) in 2012.

    Unfortunately, the Brazilian healthcare industry must be careful about the numbers of international trade (imports surpassed exports) and the national production only represents 38,9% of the national demand.

References: http://www.abimo.org.br/modules/content/content.php?page=dados-economicos

Medical Device Firms and Its Challenges

As the medical device industry faces some significant market threats these days, like slow-growing market and strong regulatory system, it became necessary to be vigilant for signs and understand when changes are needed. Executives should pay attention to at least four signs that indicate that their companies need to adapt. Frost & Sullivan's Venkat Rajan, principal analyst, who leads the firm's analysis of the medical device sector, discusses what those are.

The first sign is “Utter Lack of Product Differentiation” which means that customers see medical device products as commodities and it leads to customers’ indifference to the product. The second sign is “Profit Model Under Pressure”, this means that the profit margin declines year by year and to assure its market presence companies are facing significant internal cost-cutting. The third sign is “Market Disruptors on the Horizon”, this sign has to do with fast technology development which means that a product becomes obsolete quickly and, sometimes, its substitute proves to be better, faster and cheaper. Finally, the fourth sign is “Internal Infrastructure Deteriorating”, this means that the company’s workforce usually is slow to adapt or innovate and its strategy normally is focused on maintaining its market presence instead of expansion.

References: http://www.mddionline.com/article/four-signs-medtech-firm-needs-reinvent-its-business-model

Medtech Global Market 2011-2018

As the world lives a crisis season, economic and financial advice has become one of the most important analysis. Result Healthcare intends to guide healthcare companies providing these kind of advice and one of these attempts is the “What’s hot and key trends in Medtech in 2013[1]”.

The report indicates a growth in the medtech global market at 4.4% until 2018. It also predicts that the pharmaceutical sector will grow at only 2.5% and the in vitro diagnostics will be largest medtech segment, with some important sub-segment areas as robotic-assisted surgery and mobile health.

Some of the main conclusions of this report can be seen in the tables below:

So, one can say that there are reasons for medtech companies to be optimistic about the future.

References: http://medicaldesign.com/business/medtech-be-440b-market-2018-says-report

---

[1]  To check on the report, go to http://www.resultshealthcare.com/media/105652/medtech_2013.pdf

Obtaining Funds in the Medical Device Industry

           As the supply of venture dollars is rapidly shrinking, the task of seeking funds is becoming even more difficult. More importantly than seeking, is the effort of being able to obtain the fund. The annual IBF MedTech Investing Conference, that took place in Minneapolis last week, provided some tips on how to fulfill this task.

         These tips to obtain fund in the medical device industry can be simplified in three C’s: cost, clinical outcomes and CMS (Centers for Medicare and Medicaid Services - reimbursement). Cost is referred to if the new technology/product can remove expenses from the system. The second C, clinical outcomes, is referred to if patients are doing better with the new technology. Investors want to see clinical evidence and proof that the new product is superior than the treatments already available on the market. And finally, the third C, CMS, is about reimbursement. Investors want to know if the Centers of Medicaid and Medicare will cover the procedure. It is common sense that there is a special highlight for cost, though.

         Despite of being challenging, companies that can demonstrate their command of the three C’s are more likely to obtain funds.

References: http://www.mddionline.com/article/three-cs-can-get-your-next-venture-funded

Medical Device Providers Adopting Sustainable Actions

As outsourcing seems to be a strategic measure that is getting more and more common worldwide, including when it comes to the medical device industry, suppliers are becoming an extension to the brand. So anything that the partner does, reflect on the company’s image and on the sales of end product. Hence, medical device manufacturers are asking suppliers to make their operations more sustainable.

There are several alternatives to become more socially responsible. Since adopting measures to take care of the environment such as plants, animals, air or water; to try making the office a better place to work. Unlike what one might think, that can help a company financially.  Some recycling or waste reduction projects  might decrease unnecessary expenses.

Earth Planet and the next generations appreciate these measures companies are adopting (or trying to)  today. Even if it is a marketing strategy or finance one, becoming socially responsible is aligned with society’s expectations.

References:http://www.mddionline.com/article/suppliers-make-sustainability-efforts

Senate Votes to Repeal New Medical Device Tax

The Affordable Care Act, signed into law back in 2010, includes a 2,3% that will be charged on the total revenue of a medical device company, regardless of whether the company generates profit or not. It was meant to start this year and due to the polemic that it has raised among the medical device industry and in Congress, a repeal amendment was proposed.

On Thursday, March 21^st, the US Senate voted a 79-20 tally to repeal the medical device tax. The voting was bipartisan; it included 33 democrats against the tax. The amendment proposed is called Medical Device Access and Innovation Protection Act, introduced by both a Republican and Democrat Senators. The reasons for such a support to the amendment are due to a concern of losses in profits, job creation and R&D investments. The opponents to the repeal claim that the new tax will raise a $30 billion in 10 years and it will be funding the Affordable Care Act.

References: http://www.mddionline.com/article/medical-device-tax-jeopardy-after-senate-votes-repeal

Breaking into Emerging Markets

As the crisis of 2008 continues to effect the growth of developed countries like USA, European Union and Japan, it seems like the key to boost business all over the world is knowing how to approach emerging markets.

However, this step requires a special strategy. Since there are clearly differences between developed and developing economies, one must take into consideration these facts when deciding to formulate a strategy.  One frequently mentioned advice is not to approach emerging markets alone. Local partnership is recommended because the national partner has the know-how of the market, key-suppliers, regulatory environment, etc.

Another advice concerns to pricing. Local firms are used to lower labor cost so the final price is low. Pricing the product properly is essential to successful sales in these kinds of markets.

“ (…)it's imperative for device firms to recognize that cheaper does not mean lower quality.”

By Arundhati Parmar, Senior Editor, MD+DI

References: http://www.mddionline.com/article/going-it-alone-poor-strategy-trying-break-emerging-markets-0

Outsourcing as the key to Competitiveness

As the industry suffers from uncertainty pressures, the trend to remain competitive is turning to outsource. A Study surveyed MD+DI’s readership about outsourcing in the medical device sector ranked a list of concerning issues for the next 5 years. Regulatory hurdles, intellectual property, R&D and device tax were the most mentioned.  

The majority of the respondents agreed that outsourcing is an answer to save costs and time. For the next five years, most of them are looking for increasing the numbers of contract service. Besides manufacturing service, companies are interested in legal and regulatory services as well as R&D and design capabilities.

US-based service providers are the most common when outsourcing a project, however Russia and Latin America are the regions that the respondents most expect to expand outsourcing activity in the coming years.

Biokyra Pesquisa e Desenvolvimento is a Brazilian medical device company that may become one of the providers to the US industry when it decides to expand its contract service to Latin America.

References: http://www.mddionline.com/article/5-years-medtech-firms-will-outsource-design-legal-and-regulatory-services-over-manufacturing

Innovation in the Medical Device Sector

The concept of Innovation is always linked to the idea of creativity, novelty, technology. Nevertheless, it doesn’t restrict itself to gigantic transformations in expensive technologies. Innovation is usually seen when the problem is identified and better or new methods are created to solve it or to improve a daily process.

In the medical device industry, this preconception is frequently made. Even in this sector, innovation does not necessarily involve large investments but, most importantly, it involves the comprehension of the patient’s needs and its fulfillment to save his life or to improve his quality of life.

Unlike the consumer space where there are no barriers to different ideas, the medical device sector deals with regulatory systems, which dictate the requirements that the industry must meet. Obviously, the regulatory system is concerned about setting high standards for the safety of the patient, but sometimes it can inhibit innovative ideas.

References: http://www.mddionline.com/article/medtech-innovation-doesnt-have-be-expensive

Another Attempt to Globalize the Medical Device Industry

When it comes to a globalized economy, one obstacle always bothers the free trade: the regulatory systems of the countries. To stimulate the global economy and favor the free international trade, it is important to think of a way to converge rules and so, the free movement of goods will not become a slow bureaucratic process. As for a harmonized regulatory system for medical devices, the task is even harder because it also deals with national health laws.

This was the concern when in 1992 the European Union (EU), the United States, Canada, Japan and Australia gathered together to establish a method to harmonize the regulations on medical device. The voluntary group was called Global Harmonization Task Force (GHTF) and brought together representatives from medical device regulatory agencies and the regulated industry from its founding members.

Almost 20 years later, the new economic scenario called for new representatives. So, “to build on the strong foundation work of the GHTF and to accelerate international medical device regulatory harmonization and convergence”, the International Medical Device Regulators Forum (IMDRF) was conceived in February 2011, replacing the GHTF. Besides the original 5 founding members of the GHTF, it included Brazil to the discussion of future directions in forming an international harmonized and convergent regulatory system for medical devices.

The membership of China and Russia are currently being confirmed and the new Forum, including the 6 official members, China and the WHO (World Health Organization, an observer member), met in Ottawa in October 2011 to establish strategic topics for its operation.

Trying to standardize rules among the GHTF member countries was a big challenge, now with the creation of the IMDRF and new members added, the debate becomes even harder. Despite the adversity, the future results might turn out to be stronger and more creative once it takes into consideration different points of view. There is still a long way of hard work to build a harmonized and convergent regulatory system, which provides solutions to all the five countries and EU’s concerns. We hope the members create an environment of dialog to accelerate the harmonization and convergence of their regulatory systems, so that we could have a real “international medical device regulatory system”.

References: http://www.imdrf.org/