a view from europe 5 may 2009 john wilkinson chief executive
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2www.eucomed.orgwww.eucomed.org
ContentsContents
► Some facts about the sector in Europe
► How Europe works
► The financial crisis – How will it affect us in Europe
► What is going on in Europe– Trends– Regulation– Politics
4www.eucomed.orgwww.eucomed.org
The European medical technology industryThe European medical technology industry
► Nearly 11.000 manufacturers
► 80% are SMEs
► Annual growth rate of ca 6%
► 8% of total sales reinvested in R&D
(= EUR 5.8 billion)
► Average life cycle of 18 months
► 529,000 employees (EU+EFTA)
► 6.8% of total healthcare expenditure
► (= 0.55% of GDP)
► Total sales EUR 72.6 billion
= nearly 33% of world market share (EUR 219
billion)
► Trade
– Germany (€14.0 bn), Ireland (€6.6 bn), France (€6.1
bn), and the UK (€5.6 bn) are major exporters of
medical technology
– Germany, Ireland, the UK, Denmark, Sweden and
Finland have trade surpluses in medical technology
► As a comparison (in billion EUR):
– USA = 98.0 (45%)
– Japan = 23.1 (11%)
– China = 3.7 (2%)
– Brazil = 3.0 (1%)
Source: Eucomed
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Germany27,8%
New EU Member States**
5%
Other European Countries*
18,4%
Switzerland2,3%
Spain8,3%
United Kingdom16,2%
France13,8%
Italy8,5%
The European medical technology industry 2007The European medical technology industry 2007
Percent of Total European Medical Technology Sales (€72.6 bn)
* Finland, Sweden, Denmark, Norway, Netherlands, Belgium, Luxembourg, Portugal, Austria, Greece, Ireland
** Estonia, Latvia, Lithuania, Poland, Czech Republic, Slovakia, Hungary, Slovenia, Malta, Cyprus, Bulgaria, Romania
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European Medical Technology Imports & ExportsEuropean Medical Technology Imports & Exports
€0 €2,000 €4,000 €6,000 €8,000 €10,000 €12,000 €14,000 €16,000
Slovakia
Finland
Czech Republic
Norway
Portugal
Poland
Denmark
Sweden
Austria
Ireland
Spain
United Kingdom
Italy
France
Germany
Millions
Total Exports
Total Imports
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Source: OECD Health data 2006
6,98,2
7,08,2
6,55,7
6,4 6,4 6,4
2,02,8
1,2
4,8
3,0
1,1
2,3
2,22,4
2,31,5
3,1
3,62,8
3,6
4,0
3,5
8,5
2,4
USA Germany UK France Italy Spain Averageother EU
Japan Australia China Rep ofKorea
India Brazil Mexico
Public expenditure % of GDP Private expenditure % of GDP
15,4
10,6
8,1
10,5
8,78,1
8,77,9
9,5
5,6 5,6 4,8
8,8
6,5
Ration of GDP SpendingRation of GDP Spending
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8.60%8.0%
6.50% 6.37% 6.10%5.50% 5.3% 4.80%
Germany Japan France NorthEuropeanaverage
Spain USA Portugal UK
Source: OECD Health data 2006
Percentage of total healthcare spending Percentage of total healthcare spending allocated to medical technologiesallocated to medical technologies
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Health Spending in Europe in 2005: Percent of Health Spending in Europe in 2005: Percent of GDPGDP
Percent of GDP Spent on Healthcare
0%
2%
4%
6%
8%
10%
12%
14%
Slova
kia
Latvi
a
Estoni
a
Cypru
s
Lith
uani
a
Roman
ia
Czech
Rep
ublic
Polan
d
Irela
nd
Finlan
d
Hunga
ry
Spain
Bulga
ria
Luxe
mbo
urg
Unite
d King
dom
Slove
nia
Denm
ark
Italy
Nethe
rland
s
Sweden
Mal
ta
Austri
a
Norway
Belgiu
m
Gre
ece
Portu
gal
Ger
man
y
Franc
e
Switzer
land
Europe Average = 8.7%
Source: Eucomed Medical Technology Brief, May 2007
10www.eucomed.orgwww.eucomed.org
Per Capita Health Spending
0
1,000
2,000
3,000
4,000
5,000
6,000
Bulga
ria
Roman
ia
Latv
ia
Slova
kia
Polan
d
Lith
uani
a
Estoni
a
Czech
Rep
ublic
Hunga
ry
Cypru
sM
alta
Portu
gal
Gre
ece
Spain
Slove
nia
Finlan
dIta
ly
Unite
d Kin
gdom
Irela
nd
Belgiu
m
Nethe
rland
s
Austri
a
Ger
man
y
Sweden
Franc
e
Denm
ark
Switzer
land
Luxe
mbo
urg
Norway
Eu
ro
Health Spending in Europe in 2005: Per CapitaHealth Spending in Europe in 2005: Per Capita
Europe Average = €2,073
Source: Eucomed Medical Technology Brief, May 2007
12www.eucomed.orgwww.eucomed.org
SubsidiaritySubsidiarity
► The “subsidiarity principle” means that EU decisions must be taken as closely
as possible to the citizen.
i.e. the Union does not take action (except on matters for which it alone is responsible)
unless EU action is more effective than action taken at national, regional or local level.
► The concept of subsidiarity has both a legal (EU Treaty) and a political
dimension.
As a result, there are varying views as to its legal and political consequences.
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Subsidiarity and HealthSubsidiarity and Health
► Article 152(5) of the EC Treaty states that the Community has to respect the
‘responsibilities of the Member States for the organisation and delivery of
health services and medical care’.
► In combination with Article 152(4)(c) of the EC Treaty, action in the field of
public health is not allowed under the EC Treaty.
► On the other hand, where the Commission has the competence to regulate, it
should strive for a high level of public health protection according to
Article 152(1) of the EC Treaty (e.g. in the Medical Device Directives and Cross
Border Healthcare).
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EU CommissionEU CommissionP O L I C I E S E X T E R N A L R E L A T I O N S
Agriculture and Rural Development
Competition
Economic and Financial Affairs (ECFIN)
Education and Culture
Employment, Social Affairs and Equal Opportunities
Energy and Transport
Enterprise and Industry (ENTR)
Environment (ENVI)
Executive Agencies
Maritime Affairs and Fisheries
Health and Consumers (SANCO)
Information Society and Media
Internal Market and Services (MARKT)
Joint Research Centre
Justice, Freedom and Security
Regional Policy
Research (RTD)
Taxation and Customs Union
Development
Enlargement
EuropeAid - Co-operation Office
External Relations
Humanitarian Aid
Trade (TRADE)
G E N E R A L S E R V I C E S
Communication
European Anti-Fraud Office
Eurostat
Publications Office
Secretariat General
I N T E R N A L S E R V I C E S
Bureau of European Policy Advisers
Informatics
European Commission Data Protection Officer
Infrastructures and Logistics - Brussels
Infrastructures and Logistics - Luxembourg
Internal Audit Service
Interpretation
Legal Service
Office For Administration And Payment Of Individual Entitlements
Personnel and Administration
Translation
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New technologies – a cost driver?New technologies – a cost driver?
“We all know that new technologies save lives,
increase patient safety and greatly improve
healthcare.
But they can be very costly. We must therefore ensure
that technology and medical devices are properly
evaluated and used in the most effective way.“
Androulla Vassiliou, EU Health Commissioner12 February 2009 Speech at European Policy Centre, Brussels
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So what is stopping us?So what is stopping us?
► Barriers to information: Reliable and transparent information on available
healthcare facilities and treatments should be made accessible to patients
► Barriers of access & procurement: Silo budgeting and cost containment still
main drivers for decision-making
► Barriers of structure: One size fits all for >100,000 products?
► Barriers of human resource: Most European countries have a shortage in
healthcare personnel (quality and quantity)
► However industry needs to improve communication of ‘value’
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How will financial crisis affect business in How will financial crisis affect business in Europe?Europe?
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Economic downturn is accentuating changes in Economic downturn is accentuating changes in treatmenttreatmentpractices and reduction in healthcare practices and reduction in healthcare consumptionconsumption► Percent who say they or family member have done the following in the past
year because of cost
Source:Kaiser Family Foundation Kaiser Health Tracking Poll – Election 2008 (10/8-13 | 4/3-13); McKinsey CF/PMP joint venture
SIMILAR TRENDS SHOWING IN EUROPE
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Mixed impactMixed impact
Short-term impact limited:
- High public sector provision- Capital spending hit first
Debt Mountain will mean:
► Public spending under pressure
► Years of cost cutting exercises
► Danger that crude cost saving exercises will prevail
► Innovation constrained or seen as answer?
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What is going on in Europe?What is going on in Europe?
► Erosion of ‘Subsidiarity’ of Health
► Cross-Border healthcare (patients rights) directive
► Patient safety initiative
► Late payments directive
► Free movement of labour
► Steady increase in regulation
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RegulationRegulation
Medical Devices Directives► Recast Consultation► Suspended but not gone away► Over-reaction to needed modifications of the management of the system
Pthalates/PVC► Directive 2007/47/EC Annex I, Essential Requirement 7.5 related to phthalates
classified as CMR 1 & 2 (comes into force March 2010)► Risk assessment, labelling, justification
ReachDEHP, DBP and BBP on priority list of substances for Authorization
– Use in medical devices would need special approval– ECHA consultation on this list was open until April 14– Our focus: exempt DEHP from the need for authorization
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Does the patients‘ rights directive have the Does the patients‘ rights directive have the answer?answer?
► Legal certainty on patients‘ mobility,
effective liability and insurance, simple
redress
► Equal access to high quality and cost-
effective health technology innovation
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BUTBUT
► Still huge variation in resources across EU
– Absolute
and
– Distribution of those resources (x2 number of MD’s in Italy versus
UK)
► Huge variation in reimbursement systems
► Varying mix of public/private sector involvement
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New Parliament/New Commission 2010New Parliament/New Commission 2010
Unknown new priorities but likely to include:
► Security (includes energy)
► Environment
► Financial stability
► ? Health
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What role for the EU going forward?What role for the EU going forward?
► Reduce barriers and red tape for patients and industry alike
► Invest commitment, time and leadership in the medical innovation sector -
innovations are critical to sustain Europe's economic and social systems and to
remain competitive
► Promote long-term investment that will lead to considerable savings for
national health security systems as well as strong EU exports
► Safeguard incentives for industry to invest in R&D
Industry perspective but what will happen?
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