Editors’ Note: This blog is part 2 of a series on the MEAT value-based procurement project, an initiative that advocates towards a shift from price-based procurement of medical technology towards value-based procurement. It does so by defining a Most Economically Advantageous Tendering (MEAT) framework that includes the value of medical technologies, services and solutions in procurement processes across Europe. Read part 1 and part 3. If you would like to contribute please contact the MedTech Views editorial team at [email protected].
Earlier this year you could read about a new partnership between MedTech Europe and BCG where the aim was to define a framework for Most Economically Advantageous Tendering (MEAT) for the medical technology industry. Since then a few months have passed by, and I was really happy to see the first results of this partnership during the gathering of procurement officials in Lisbon end of September.
The new MEAT framework presents a new way of thinking towards what the future should look like: a new era where the main role of procurement is to secure best value for money, and not only focus on the lowest possible price. During the last few years, extra pressure has arised due to crunching budgets, and at the same time procurement practices have not been very successful in taking into account the benefit of innovation in medical technology. Lower price does not automatically lead to lower cost, and several innovations have proven to lead to lower overall costs despite higher purchase price.
Medical technology innovation will not stop. However, we can –at best- only expect to have the same levels of funding in the future. Therefore, if we want a different outcome, we have to act differently.
Having a new methodology for procurement processes is definitely a must, but will that alone solve the problem? Who should drive this change, and how to make it happen? The immediate answer could easily be that procurers should take the lead and change the rules of the game – but is it really that simple? I do not think so. Medical technology innovation is driven by the industry. Demonstrating objectively that new innovations add value, and that new products, services, or ways of working are not only something “nice to have” is clearly an issue the industry has to address. There is an emerging need to start collecting more and more data, analyse them, define proper outcome measures and assess how added value can be proven. We also need to educate stakeholders on what can be covered by which technologies, which technologies are comparable, and how to move away from conducting procurement processes based on “what was procured last time” to ”what is really needed”.
Besides procurers and industry, policy makers also have a significant role to play. If the regulatory framework does not support this transition, regardless of all other efforts we put in defining a new MEAT framework, this initiative is most likely to fail, leaving behind a lot of losers, but no winners.
The time to act is now. The new EU Procurement Directive clearly recommends moving away from price-only tenders, so it seems there would no better timing to do it. This is why all of us – industry, procurers and policy makers – have to start acting today and re-think our approach to procurement to change the way we “used to work”. Only then will we be able to make a difference, and make value-based procurement a reality for all.