Post on 09-Apr-2018
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Medical technology in EuropeMedical technology in Europe
6th March 2009
John Wilkinson
Chief Executive - Eucomed
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2www.eucomed.orgwww.eucomed.org
OutlineOutline Overview of the Medical Technology Industry
What is it?
How big is it? What it isnt
What is Eucomed?
Impact of Medical Technology
Health system challenges
Contribution of Medical Technology
Please ask questions as they arise.
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Overview of the European MedicalOverview of the European Medical
Technology IndustryTechnology Industry
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Medical TechnologyMedical Technology
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European Medical Technology IndustryEuropean Medical Technology Industry Economic Contribution
Total sales of 63.6 billion in 2006
1/3 of global medical technology market (187 bn)
Second largest market behind the US
Employed 435,000 people across Europe
11,000 Companies, 80% of them SMEs
Scientific Contribution
Major user of R&D services
Up to 3.8 billion spent on R&D in 2006
Trade Contribution
Germany (14.0 bn), Ireland (6.6 bn), France (6.1 bn), and theUK (5.6 bn) are major exporters of medical technology
Germany, Ireland, the UK, Denmark, Sweden and Finland havetrade surpluses in medical technology
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Germany
27,8%
New EU Member
States**
5%
Other European
Countries*18,4%
Switzerland
2,3%
Spain
8,3%
United Kingdom
16,2%
France
13,8%
Italy
8,5%
The EuropeanThe European MedTechMedTech industry 2007industry 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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The EuropeanThe European MedTechMedTech industryindustry Nearly 11.000 manufacturers
80% are SMEs
Annual growth rate of ca 6%
EUR 5.8 bn reinvested in R&D
= 8% of total sales
Average life cycle of 18months
529,000 employees(EU+EFTA)
6.8% of total healthcareexpenditure (= 0.55% of GDP)
Total sales MedTec sales in Europe
of EUR 72.6 bn
= nearly 33% of world market share(EUR 219 bn)
For comparison:
USA = 98.0 Billion (45%)
Japan = 23.1 Billion (11%)
China = 3.7 Billion (2%)
Brazil = 3.0 Billion (1%)
Source: Eucomed
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European Medical Technology EmploymentEuropean Medical Technology EmploymentCountry of Employees % of European Total
Austria 6,000 1.4%
Belgium 5,500 1.3%
Czech Republic 12,760 2.9%
Denmark 14,000 3.2%
Finland 3,000 0.7%France 40,000 9.2%
Germany 110,000 25.3%
Greece 2,500 0.6%
Hungary 4,250 1.0%
Ireland 26,000 6.0%
Italy 29,815 6.9%
Netherlands 9,500 2.2%Norway 500 0.1%
Poland 8,700 2.0%
Portugal 3,200 0.7%
Romania 15,000 3.5%
Slovakia 2,198 0.5%
Slovenia 1,237 0.3%
Spain 25,400 5.8%
Sweden 15,000 3.5%
Switzerland 40,000 9.2%
United Kingdom 60,000 13.8%
Total Europe 434,560 100%
As many people work in themedical technology industry aslive in Liverpool or Toulouse
One out of every 500 employedEuropeans is employed in themedical technology industry
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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
FinlandCzech Republic
Norway
Portugal
Poland
DenmarkSweden
Austria
Ireland
Spain
United Kingdom
Italy
France
Germany
Millions
Total Exports
Total Imports
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Differences Between Drugs & DevicesDifferences Between Drugs & Devices Pharmaceuticals
Industry with longer history
Primarily large multinationals
Medical Devices
Relatively young industry
80% are small- and medium-
sized companies
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Differences Between Drugs & DevicesDifferences Between Drugs & Devices Pharmaceuticals
Limited number of products
Development by trial and
selection on the basis of quality,safety and efficacy
Therapeutic
Based on pharmacology,chemistry, biotechnology, and
genetic engineering Biologically active and effective
when absorbed by the body
Medical Devices
More than 10,000 products(different sizes, models, etc.)
Designed specifically to performcertain functions based onquality, safety and performance
Diagnostic, therapeutic,monitoring
Based on mechanical, electricaland/or materials engineering
Generally act by physical means
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Differences Between Drugs & DevicesDifferences Between Drugs & Devices Pharmaceuticals
Continuous innovation andsome improvements based on
new science and technology Innovation primarily the result
of laboratory work
Extensive product lifestyle andlong investment recovery period
Breakthrough drugs
Medical Devices
Continuous innovation anditerative improvements based
on new science, technology andavailable materials
Innovation primarily the resultof insights from clinicians
Short product lifestyle and
investment recovery period(~18 months)
New devices bring addedfunctions and clinical valuebased on incrementalimprovements
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Differences Between Drugs & DevicesDifferences Between Drugs & Devices Pharmaceuticals
Low distribution cost
No service or maintenance
Limited training required(compared to high-tech medicaldevices)
Medical Devices
High cost of distribution
Training and education essential
High cost of training andeducation
Extensive service requirements
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Differences Between Drugs & DevicesDifferences Between Drugs & Devices Pharmaceuticals
Randomized control trialssimple to perform
Efficacy and efficiency can beproven before going to market
Drugs either work or dontwork: efficacy and efficiencyeasy to prove
Medical Devices
Randomized control trialsdifficult to perform
Efficacy and efficiency difficultto prove before product is used
Medical devices are part ofwhole system and their efficacyrelies on the skills and
experience of the physician, thequality of the hospital, andother factors
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15www.eucomed.orgwww.eucomed.org
About EucomedAbout Eucomed
Represents the Europeanmedical technology industry
62 Corporate Members, 27National Association Members
Represents 4,500 companiesactive in the European medicaltechnology industry
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Impact of Medical Technology in EuropeImpact of Medical Technology in Europe
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Health Spending in 2005Health Spending in 2005
Percent of GDP Spent on Healthcare
0
2
4
6
8
10
12
14
16
18
China Brazil Europe Japan United States
PercentofGDP
Per Capita Health Spending
0
1,000
2,000
3,000
4,000
5,000
6,000
China Brazil Europe Japan United
States
Euro
Source: WHO (WHOIS database accessed 2/VI/08, Eucomed Medical Technology Brief, May 2007Europe refers to EU-27 plus Norway and Switzerland
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Per Capita Health Spending
0
1,000
2,000
3,000
4,000
5,000
6,000
Bulga
ria
Romania
Latvi
a
Slovakia
Polan
d
Lithu
ania
Estonia
CzechRe
publi
c
Hungary
Cyprus
Malta
Portu
gal
Gree
ceSp
ain
Slovenia
Finla
nd Italy
Unite
dKi
ngdom
Irelan
d
Belgi
um
Neth
erlan
ds
Austria
Germ
any
Swed
en
France
Denm
ark
Switz
erlan
d
Luxemb
ourg
Norway
Euro
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
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Health Spending in Europe in 2005: Percent of GDPHealth Spending in Europe in 2005: Percent of GDP
Percent of GDP Spent on Healthcare
0%
2%
4%
6%
8%
10%
12%
14%
Slovaki
a
Latvia
Estoni
a
Cypru
s
Lithuan
ia
Romani
a
CzechRe
public
Polan
d
Ireland
Finlan
d
Hungar
y
Spain
Bulgari
a
Luxembour
g
Unite
dKi
ngdomSloveni
a
Denmar
kItal
y
Netherland
s
Swede
nMalt
a
Austria
Norwa
y
Belgium
Greec
e
Portuga
l
German
y
Franc
e
Switz
erland
Europe Average = 8.7%
Source: Eucomed Medical Technology Brief, May 2007
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Global Medical Technology SpendingGlobal Medical Technology Spending
USA; 42%
Europe; 34%
Brazil; 1%
China; 2%
Italy; 4%
UK; 4%
Spain; 3%
Switzerland; 1%
Other Europe;
5%
New EU
Members; 2%
Japan; 10%
France; 5%
Germany; 11%
New EU Members = EST, LT, LV, PL, CZ, SK, HU, SI, MT, CY, RO, BGOther Europe = NL, BE, LU, IE, DK, GR, PT, AT, SE, FI, NO
Source: Eucomed Medical Technology Brief, May 2007
In 2005: 187 billion spent on medical technology worldwideOf this, 42% was in the US and 34% was in Europe
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Medical Technology Spending in 2005Medical Technology Spending in 2005
Percent of Total Healthcare Expenditure Spent on Medical Technology
5.5%
6.3%
0%
1%
2%
3%
4%
5%
6%
7%
USA Europe
Source: Eucomed Medical Technology Brief, May 2007
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Medical Technology Spending Per CapitaMedical Technology Spending Per Capita
Per Capita Spending on Medical Technology (2005)
271
128
0
50
100
150
200
250
300
USA Europe
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Medical Technology Spending in Europe in 2005Medical Technology Spending in Europe in 2005
Percent of Total Healthcare Expenditure spent on
Medical Technology
0%2%4%6%8%
10%12%14%16%
Luxembour
g
Belgiu
m
Roman
ia
Ireland
Austria
Finland
Unite
dKi
ngdom
Norwa
y
Cyprus
Switz
erlan
d
Greec
e
Portug
al
Swede
nItaly
Neth
erland
s
Denma
rk
France
Sloven
iaMal
ta
Bulgar
ia
Poland
Hunga
ry
CzechRe
publicSpa
in
German
y
Lithuan
ia
Latvia
Slovak
ia
Estonia
Europe Average = 6.3%
Source: Eucomed Medical Technology Brief, May 2007
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Declining Infant Mortality RateDeclining Infant Mortality Rate
Infant Mortality Rates per 1,000 Live Births
0
5
10
15
20
25
30
35
1964 1974 1984 1994 2004
Rateper1,0
00
LiveBirths
Europe United States Japan
Source: OECD Health Data 2007
83% Decline
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Increasing Life ExpectancyIncreasing Life Expectancy
Female Life Expectancy at Birth
60
62
64
66
68
70
72
74
76
78
80
82
84
1964 1974 1984 1994 2004
Life
Ye
ars
Europe United States Japan
Male Life Expectancy at Birth
60.0
62.0
64.0
66.0
68.0
70.0
72.0
74.0
76.0
78.0
80.0
82.0
84.0
1964 1974 1984 1994 2004
LifeYears
Europe United States Japan
Source: OECD Health Data 2007
Increase ofnearly 8
years
Increase ofnearly 7years
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Overall Better HealthOverall Better Health
Since 1986:
Overall death rate down 25%
Life expectancy from birth increased by 4.3 years
Life expectancy for those over 65 up by 12%
Mortality rates from acute myocardial infarction (heartattack) down by 50%
Mortality rates for cerebrovascular diseases (stroke) down by
44% Mortality rates for breast cancer (female) down by 18%
Source: OECD Health Data 2007
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Science base
Health Care System
Med
Tech
Pharma
ICT
European
MedicalResearch
Trade
benefits
Increased cost + value
Eliminated cost
ICT Pharma MedTech
TechnologyTechnologys virtuous circles virtuous circle
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CostCost--Effectiveness of Medical TechnologyEffectiveness of Medical Technology
Medical technology constitutesa relatively small share ofoverall healthcare expenditure
(6.3% in Europe in 2005)* While overall healthcare
expenditures have increased,the share of spending onmedical technology has
remained relatively constant** While expenditure on medical
technology has grownsignificantly over the previousdecades, it has grown at a rate
less than that of generalmedical care and pricesoverall**
0%
1%
2%
3%
4%
5%
6%
Medical
Technology
General
Medical
Care
Consumer
Prices
Annual Spending Increases (1989-
2004)**
Sources: *Eucomed Medical Technology Brief, May 2007**King, Roland and Gerald F. Donahoe, Estimates of Medical Device Spending in the United States. Advamed.
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CostCost--Effectiveness of Medical TechnologyEffectiveness of Medical Technology
Prof. Cutler: Although medicalspending has increased over time,the return on spending has beenhigh.
Furthermore: substantialimprovements in the quality of lifeduring this period, especially amongthe elderly.
For example: Between 1960 and 2000, life
expectancy for newborns increasedby 6.7 years
Lifetime medical spending (adjustedfor inflation) increased by USD69,000
Cost per year of life gained was USD19,900
Assuming a value of an additionalyear of life of USD 100,000, netbenefit on medical technologyspending is USD 80,100
Cost/Year
of Life
Gained
Net Benefit
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
U SD
Net Value of Medical Technology
Value/Year of
Life Gained=USD 70,000
Source: Cutler et al. The Value of Medical Technology Spending in the United States, 1960-2000. N Engl J Med 355:9. 31 August 2006.
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CostCost--Effectiveness of Medical TechnologyEffectiveness of Medical Technology
The same trend can beobserved in regard to specificdiseases/treatments
Heart Attacks: Change in treatment costs
between 1984 and 1998 = USD10,000
Outcome change = 1 yearincrease in life expectancy =
USD 70,000 Net benefit = USD 60,000
Low-birthweight babies Change in treatment costs
between 1950 and 1990 = USD40,000
Outcome change = 12 yearincrease in life expectancy =USD 240,000
Net benefit = USD 200,000
Cost/Year of
Life Gained
Net Benefit
0
20,000
40,000
60,000
80,000
USD
Net Value of Med. Tech: Heart Attacks
Cost/Year of
Life Gained
Net Benefit
0
50,000
100,000
150,000
200,000
250,000
USD
Net Value of Med. Tech: Low-Birthweight Babies
Source: Cutler, David M. and Mark McClellan. Is Technological Change in Medicine Worth It? Health Affairs. September/October 2001.
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CostCost--Effectiveness of Medical TechnologyEffectiveness of Medical Technology
This appears to be equally true in Europe
For acute myocardial infarction, progress in medical procedures inSpain has saved 5,326 lives since 1980
The real unit costs of treatment have increased from 2,143 in1980 to 4,500 in 2003
If this cost increase is applied to the 57,842 cases of acutemyocardial infarction in Spain in 2003, the advances in medicaltechnology have cost 26,140 per life saved
Based on common assumptions about the value of a life, progressin medical technology from 1980 to 2003 has been well worth it
Source: Lpez-Valcrcel, Beatriz & Jaime Pinilla. The Impact of Medical Technology on health: A Longitudinal Analysis of Ischemic Heart Disease. ISPOR, 2007.
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SummarySummary
Over the past decades, expenditure on both healthcare andmedical technology has increased significantly.
However, the proportion of healthcare expenditure spent on
medical technology is still relatively small, and has remainedmore or less constant.
Moreover, the costs of medical technology has increased moreslowly than healthcare costs overall and general prices in the
economy Over the past decades, great improvements in health among
the population have taken place
Economic analysis suggests that the benefits of medical
technology far outweigh its costs
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SummarySummary
BUT:
The level of understanding of the role of medicaltechnology is very low
Mechanisms for evaluating the contribution arevery limited
Health systems tend to focus on controlling costsof technology rather than maximising value andutility