At 95 billion Euros the European medical technology market and industry is far from insignificant. Its impact on the lives of patients combined with the ability of health systems to operate efficiently dwarfs the value of the market while the industry has spawned hundreds of early stage companies year on year. Despite its size the medical technology market is less than 5% of total health spend and that figure appears to be declining.
The huge innovative strength of the industry is provided by over 20,000 companies operating in Europe, feeding off the creativity of a medical and scientific community which is both large and diverse. So you’d probably assume that the prospects for the industry are great? Well perhaps they are, however, the future may look slightly bleak if we do not galvanise our efforts to explain to the world who we are. The fragmentation that makes us great may also be our Achilles heel. Somehow we struggle to convince governments, policy makers, payers and hospital managers of Europe that we are on their side. These stakeholders remain convinced that we are the primary drivers of health inflation and must be constrained. This is despite much convincing evidence to the contrary.
As an industry we must align ourselves more visibly with the needs of our customers and move away from old models of operation which focus on selling ‘better mousetraps’ to clinicians. We need to migrate to generating and communicating evidence to the increasingly influential payers, hospital managers, policy makers and governments. Generating evidence to demonstrate that our industry is sufficiently aligned and understands what needs to be done is a job for industry as a whole. We should aim to avoid situations where individual companies mix competitive marketing communications with a more generic need to explain themselves to a sceptical audience, particularly one which may have been influenced by stakeholders keen to divert the bright lights of close scrutiny away from their own performance and role in the system.
Undoubtedly, the industry needs to pool its resources to make sure that we have the materials and evidence needed to convince a much broader stakeholder community. This will prove difficult in a time when business models have to adjust to a much more organised economic buyer and a much more competitive supply side. Quite frankly, it’d be easy then to put all of this off until the sun shines again. The trouble is that the sun may not reappear or at least not with the same intensity. Failure to communicate our value proposition threatens to drive erosion in the perceived value of innovation, consequently making fund raising to fuel innovative, new and much more valuable technologies ever more difficult.
Switching this pipeline off or reducing its flow threatens not just the lives of the entrepreneurs but also the larger companies that rely on trade acquisitions to fuel growth. More importantly, the innovation that has made millions of arthritic patients mobile, reduced hospital stay times by 50% in 20 years, allowed cardiac patients to work, cataract patients to see and countless other miracles, will slowly but surely dry up and this will be to the detriment of all of us. The time for coming together is now if we are to maintain the contribution to society that we have delivered over the last 50 years.
– John Wilkinson, Chief Executive, Eucomed