3 steps to successfully launching a medical device in Europe
01 AUTHORISATION Surmounting the first market hurdle – gaining authorisation to market a medical device in a particular territory – is pretty much universally seen as a faster, cheaper and easier process in the Europe Union than in the USA. Atlantic Therapeutics, a spin-out from Biomedical Research (BMR), has offices in Galway, London, and Salem in Germany and recently attracted €15m in venture capital to expand market reach for Innovo, a nonintrusive device to treat urinary incontinence by strengthening pelvic floor muscles.
The European regulatory process is an easier place to start, agrees Atlantic Therapeutics CEO Steve Atkinson. Moreover, European Union authorisation has helped open doors in the Middle East where Innovo is about to launch, due to the similarities between the EU and local regulatory regimes.
In Europe, every marketed medical device must carry a Conformité Européenne (CE) mark indicating that it conforms to relevant directives set forth in the EC Medical Device Directives. “Once your product is classified as a medical device and gets CE accreditation, it can be commercialised in any EU market,” advises Jean Charles Moczarski at Enterprise Ireland’s Paris office.
Non-implantable medical devices are considered low risk, meaning that manufacturers themselves can certify compliance and apply a CE mark; whereas higher risk devices must undergo an external review and may require clinical and/or nonclinical evidence to support approval.
The application can be filed in any member state and is reviewed by a ‘notified body’ authorised by that state’s competent authority. Currently, there are over 70 notified bodies operating in the EU; typically, these are for-profit, private companies.
In contrast, in the US, medical device approval is overseen by a single authority – the Federal Drugs Administration (FDA).
In a comparison of the two systems, published in 2016, Gail Van Norman noted: “Before approval of a medical device in the United States, a device must not only be shown to be safe, but efficacious. Medical devices approved in Europe need only to demonstrate safety and performance... They are not required to demonstrate clinical efficacy.”
Cork-based start-up PMD Solutions has developed RespiraSense as a continuous and accurate, discrete sensor that measures the mechanics of respiration to monitor general ward patients who are at risk of adverse events until discharge in hospitals. The device has been trialled in hospitals in Ireland, Europe and Asia.
Having selected Europe as an initial target market, CEO Myles Murray says: “It’s all about resources. SMEs need to be strategic about the territory they enter. The European CE pathway, although still rigorous, can be easier.”
If European industry and patient lobby groups have their way, this will remain the situation. However, it could be a case of watch this space. Proposed amendments to Europe’s medical device regulations, which would bring it closer to the US system, include involving the European Medical Agency in device regulation, tightening controls over notified bodies and requiring more rigorous clinical evidence.
02 REIMBURSEMENT Gaining authorisation to market a medical device in a particular territory is only part of the battle. A second obstacle involves getting on the ‘approved list’ for reimbursement, so that the customer – whether a hospital or patient – will be reimbursed by the relevant health insurer if they purchase the device.
SMEs often make the mistake of assuming that the data they have used to file for the CE mark will be sufficient to get them included on a territory’s list of products and services qualifying for reimbursement. However, according to Prof Alain Bernard, at École Centrale de Nantes in France, this is not always the case. In the era of value-based healthcare, companies need to prove that their product will deliver clinical, economic and, for patients, quality-of-life benefits. In this regard, success in one European market does not offer a free pass to the next one. Early on, companies should get to know how the various reimbursement schemes operate in intended target markets and consider what additional evidence might be required when setting up a clinical study. Specifically, they should analyse existing reimbursement arrangements for their product type or work on getting a new procedural coding.
The Haute Autorité de Santé assesses whether a product should be made eligible for reimbursement by France’s national health insurance, based on clinical trial evidence for patient benefits and added clinical value. If the benefits are determined to be sufficient, he medical device is registered on a list qualifying it for reimbursement. The manufacturer then negotiates a reimbursement with the public pricing committee, or CEPS as it’s known, based on the clinical value and how it compares to existing products or therapies.
Atlantic Therapeutics found the French market relatively easy to navigate into, since a product code already existed for devices of Innovo’s type, allowing for reimbursement for homecare use, Atkinson says. If Innovo is prescribed by a French doctor, the patient can simply call into a pharmacy with the reimbursement code to collect it.
The French medical device market is the second largest in Western Europe and the fifth largest in the world. Its formidable healthcare system has one of the highest spends in Europe, at $278.8bn in 2015, representing 11.6 per cent of GDP. Public health chalks up 78 per cent of the total spend, and the country is in the midst of a hospital investment programme.
Germany is the only larger market in Europe. Healthcare expenditure represents around 11 per cent GDP, and medtech was valued at €26 billion in 2014.
“The German healthcare market is unique because 90 per cent of it is public, dominated by statutory health insurance,” says Marco Kalms, CEO of Palms & Partner, a consultancy firm based in Berlin.
Kalms says entry into the hospital (inpatient) side of the market is easy, and even off-label use of devices is permitted. On the ambulatory (outpatient) side,everything is forbidden unless approved. The Federal Joint Committee (G-BA) ratifies new procedures for coverage by the statutory health insurers.
“For the ambulatory market, you need to approach the Federal Joint Committee (G-BA), the highest decision making body, to see if there is potential. They assess the clinical evidence and decide on how much to pay for it,” he explains.
“Once you have a CE mark, you can sell into the hospital market, using an existing code or apply for a new code to one of the healthcare technology assessment bodies of the Federal Ministry of Health (BMG),” Kalms explains.
Billing is based on the German Diagnosis Related Groups (G-DRG). The compensation amount is based on data continuously gathered from German clinics. On the hospital side, the InEK Institute determines price.
“The German public healthcare market is running a surplus, something in the order of €28bn to €30bn, which is very different from the UK, the US, or France,” says Kalms. “There is a reason for that. They are always looking for opportunities to save money, so with a reasonable price, a product can do well.”
However, it is not all about costs. “A misconception we see with a lot of clients is that having economic data will get you into the German market. The first data the health assessment technology bodies look at is clinical evidence and patient benefits. If there are proven sophisticated clinical studies, then you Having won business with medical device manufacturers based in Ireland, suppliers providing everything from design and prototyping through to subsupply, manufacture, packaging and ancillary services can also find potential markets in Europe.
While Ireland is the second largest exporter of medical devices in Europe, Germany is the largest, with particular strengths in diagnostic imaging, dental products and optical technologies. The area around Baden-Württemberg is one of the strongest for medical devices manufacturing. The largest producers are B.Braun, Fresenius and Siemens.
Italy has a well-developed medical device manufacturing base, with a market size of €7.5bn, comprising a small number of large companies (Sorin, Gambro, CID Vascular, etc.) and a large number of SMEs, mostly located near Modena in the Mirandola district.
France also has a well established medical device manufacturing industry, dominated have a chance on the market, even if the product is considerably more expensive. If you have poor clinical evidence, you have no chance.
“A common mistake is for companies to put their workload into getting FDA and CE approval. Once they have it, they say now for reimbursement. They should have already started on this.”
Atlantic Therapeutics’ Steve Atkinson agrees, explaining: “The reimbursement system in Germany depends on a network of insurers. Which insurer you are with determines how much you will get reimbursed. As a seller, you need to make sure your product is covered by each insurer, and you should get that done ahead of your launch in Germany. Otherwise, you are not going to get paid. Culturally, Germans are not used to paying for healthcare out of their own pockets.”
03 ROUTE TO MARKET Having surmounted two major obstacles, companies have to address the issue that faces almost any exporter – route to market. Small medtech companies are usually best advised to sign up distributors. But they also need to be aware of the role of group purchasing organisations or GPOs. These are entities intended to help healthcare providers realise savings and efficiencies by aggregating purchasing volume and using that to negotiate discounts with manufacturers and distributors.
In France’s public hospital system, for example, the Parisian Hospital Board is a central buying group, comprising 37 hospitals organised into 12 hospital groups with 23,000 treatment beds. Its annual budget is around €7bn.
In Germany, the leading group purchasing organisation is Prospitalia, with over 700 medical institutions and 135,000 hospital beds; 350 contracted suppliers; 500,000 listed items; and over €1bn in purchasing volume.
Internationally, the dominance of GPOs has been blamed for narrowing channels to market to the extent that developing an effective medtech product is, in itself, not enough for a company to reach its ultimate customer.
“Public buying groups are large, powerful players when it comes to negotiating procurement contracts. This can be a hindrance for smaller companies,” says Moczarski.
Therefore, Irish companies must also work hard to create market pull, targeting influential surgeons, clinicians and patient groups to champion their products.
Medica 2017 November 13 to 16 Enterprise Ireland will host an Ireland Pavilion at this leading global event for medical technologies L: Dusseldorf, Germany E: firstname.lastname@example.org