6th January 2012

Chairman of Medilink UK discusses the healthcare systems of the US, Europe and the UK

If the US is looking to Europe – should we?

Tony Davis, through the UKTI Blog. Posted: 05 Jan 2012 06:50 AM PST

Your typical UKTI Mission to the US is usually a chance to step forward in time – learn from their new ideas, best practice and bring back valuable innovations and market insights to the UK. But with the fear and uncertainty regarding the global economy, our recent Mission to AdvaMed was different.

A key theme of AdvaMed was jobs, and specifically how the medical device industry will provide jobs to assist in the economic crisis in the US. They understand that it is industry which has the power and capability to save lives and provide the quality jobs needed for economic recovery, but the challenges and pressures facing America’s businesses are incredibly similar to the ones we are feeling here in the UK. A lack of support, rising costs and anti-risk approach to procurement is making it very difficult for companies to survive, invest and grow.

But while there are some similarities, contrasts in policy are making the markets very different. While the UK’s industry waits to find out what the Government’s health and social care bill will mean for NHS suppliers dealing with local consortia, the US health system reforms have had the opposite effect, by removing power from clinicians and patients and giving it to HTA (Health Technology Assessment)administrators. This is creating ananti-innovation spirit which is borne out in HTA decisions to clamp down on new market entrants and providers are moving back to the least-cost options. This will have the effect of limiting choice for patients.

There’s a very real fear that in the hands of administrators, the regulations for medical devicesare becoming more and more stringent. This is already creating a huge push by industry to ensure the politicians understand why medical devices are different to pharmaceuticals and why they should be treated differently. More stringent regulations will create a massive evidence load and the need for efficacy proof will increase the cost of innovation, just as healthcare providers push the prices of products and services down.

In this environment, it’s going to become impossible for SMEs to compete, and they will become unsustainable. With confusion around reimbursement, increasing tax on medical devices and the cost and time to trial innovative products, fewer SMEs will bring products directly to market, and instead want to partner with larger, established players. Interestingly, Europe, though not necessarily the UK, is considered very attractive for US firms to launch new products as they perceive the regulatory environment to be much more industry-friendly than in the US. Many firms were saying it costs half as much, and takes half as long to get a product to market.

Perhaps this is the lesson that comes from the US as we go into 2012. Invest in Europe’s healthcare market, fight for industry-friendly legislation and provide small businesses with relevant, specialist support that enables them to overcome the many hurdles that will face them. As Chair of Medilink UK, that seems like a mandate to me.