Action MedTech – Key Measures for Growing the Medical ......Action MedTech – Key Measures for...

December 2007

Royal Institute of Technology

Karolinska Institutet

Karolinska University Hospital

Action MedTech – Key Measures for Growing the Medical Device Industry in Sweden

For a digital version of this report (PDF), please visit www.ctmh.se

Table of contents

Introduction

1. Executive summary

2. About this report

3. The medical device industry is a large and increasingly important contributor to a modern economy

4. Sweden’s medical device industry has a proud history, but the bar for success is rising and Sweden largely relies on aged inventions

5. Building a successful medical device industry requires purposeful collaboration between several stakeholders

6. Measured against international best practice, the Swedish environment for medical devices has important shortcomings

7. Each stakeholder needs to take action to ensure a strong future for the industry

Appendix

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Partners and sponsors to the project

• Carl Bennet AB• CapMan• Chalmers University of Technology• Elekta AB• Gambro AB• Göteborg University• Innovationsbron• Karolinska Institutet (KI)• Karolinska University Hospital• Royal Institute of Technology (KTH)• Sahlgrenska Academy• VINNOVA

Project steering groupLars-Åke Brodin (Royal Institute of Technology)Bertil Guve, chairman (Royal Institute of Technology/Centre for Technology in Medicine and Health)Lars Kihlström (Karolinska University Hospital)Bo Norrman (Karolinska Institutet)Carl Johan Sundberg (Karolinska Institutet)

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ThemedicaldeviceindustryisaveryimportantindustryforSweden–onthebasisofitscontributiontogrossdomesticproduct(GDP)andemployment.Theindustry’sinnovationsalsoelevatethelevelofhealthcareprovidedinSwedenandtherestoftheworld.

AsthreeofthemedicaldevicestakeholdersinSweden,weseegreatbenefitsinaclosercollaborationbetweenourownorganizationsandothers(e.g.,companies,government,finan-ciers,andindustry-networkorganizations).Primarybenefitsfromourperspectivewouldbeastrengthenedinnovationenvironmentandbetterhealthcare.

OverthelastfewyearsintheStockholmregionwehavemadeaneffortthroughthecreationofCentreforTechnologyinMedicineandHealth(CTMH)toidentifyandinitiateresearch,educationalprogramsandindustrialcollaborationfordevelopmentandimprovementofclinicalapplicationsandprocessesinhealthcare.Presentedinthisreportisacaseforfurtherstrengtheningoureffortsand,throughcollaborationwithotherstakeholders,increasingmedicaldeviceinnovationinSweden.Keycharacteristicsofourfuturecollaborationinthisareaarehighambition,focusandaction.

EventhoughweasinitiatorsofthisreportviewthisfromaStockholmperspectivewewouldliketostressthenationalrelevanceofthisreport.

Wewanttothankthesteeringgroup(Lars-ÅkeBrodin(RoyalInstituteofTechnology),BertilGuve(RoyalInstituteofTechnology/CTMH),LarsKihlström(KarolinskaUniversityHospital),BoNorrman(KarolinskaInstitutet),andCarlJohanSundberg(KarolinskaInstitutet))andalltheindividualswhohavecontributedtothiseffortthroughfunding,workshops,interviewsandguidance.Welookfor-wardtoanexcitingjourneytogetherandtobuildingonthemomentumcreatedduringthecreationofthisreport.

PeterGudmundson,President of the Royal Institute of Technology

BirgirJakobsson,CEO of Karolinska University Hospital

HarrietWallberg-Henriksson,President of Karolinska Institutet

5December,2007

Introduction


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Executive summary

1Themedicaldeviceindustryislargeandfastgrowing,withveryattractivebenefitstoamoderneconomy.GlobalsalesamounttooverUSD200billionandcontinuedstronggrowthisexpectedtobedrivenbytheagingofthepopu-lation,theincreasedburdenoflife-stylerelateddiseases,productinnovation,growingwealthindevelopednationsandtheexpectedexpansionofhealthcareinunder-developedmarkets.Fromanationalperspective,astrongmedicaldeviceindustryisasourceofcompetitiveadvantageasitsupportsdistinctiveacademicenvironmentsandcreateshighincome,knowledge-intensivejobs.Moreimportantly,theindustrycontributestotheimprovementofhealththroughouttheworldthroughnewhealthcaresolutions.

Swedenhasaproudhistoryinmedicaldevices,basedongroundbreakinginnovationslikethegammaknife,dentalimplants,theimplantablepacemaker,andthedialysismach-ine.Theseandotherinnovationshavehelpedbuildleadingcompanies,aswellasanindustrythathasbeenastrongcontributortotheSwedisheconomy.From1999to2005,themedicaldeviceindustryinSwedenachievedconsistentGDPcontributiongrowthof10%peryeardrivenbyemployeegrowthof4%peryearandanoverallproductivityimprove-mentfarabovemostotherindustries.

Butthebarforsuccessintheglobalmedicaldevicearenaisrising,andSwedenisstillrelying,forthebulkofitsmedicaldevicerevenues,oninnovationsthatare30to50yearsold.Morecomplexinnovation,morestringentregulation,andincreasingcostpressureinthehealthcaresystemcontributetoamorechallengingenvironmentfordevicecompanies.Asthechallengetobringproductstomarketandtoachievetruedifferentiationincreases,andasthecustomerlandscapegrowsevenmorecomplexanddemanding,thequestioniswhetherSwedencankeeppacewiththebestintheindustry.WillSwedenseethecreationofnewgloballeadersandwillexis-tingleadersstrengthentheirpositionsthroughestablishingnew,attractivegrowthplatforms?

WhiletheSwedishindustrycontinuestoperformwell,therearesignsthatSwedenmaybelosingsomeofthedistinctive-nessithasachievedinthepast.Lookingacrossthemedicaldeviceindustrytoday,anumberofobservationsgivecauseforconcern.ItappearsthatSwedenisstartingtolosesomeofitsstrengthintherelevantresearchcommunities,andisstrugglingtoturngoodideasintoproductsandcompanies.ThesmallandmediumsizedSwedishcompaniesholdrela-tivelylimitedpotentialtogeneratenewgloballeaders.And,whileSwedenhassomelarge,globalcompanies,itseemstobeunabletomaximizethevalueofthesecompanieswhenitcomestobuildingstrongnetworksandinnovationclustersinthecountry.Overall,thelargecompaniesareactiveinmoreslowlygrowingsegmentsofthemedicaldevicemarket,andinsomecasesthereisariskofcontrolandownershipbe-cominglessSwedish.

Whatcanbedonebetter?Measuredagainstinternationalbestpracticecases,thecurrentenvironmentformedicaldeviceinnovationandcommercializationinSwedenhasimportantshortcomings.Ananalysisofinternationalsuccesscasesshowsthatbuildingastrongmedicaldeviceindustryrequiresstrongfocus,realcollaborationandlong-termcom-mitmentfromseveralkeystakeholders:academicinstitutions,leadinghospitals,government,financiers,networkorganiza-tionsandcompanies.Thereisnosingleformulaforsuccess,butdrawingonthesecases,fourcriticalenablersstandout:1)strongandalignedincentives2)worldclasscapabilities,3)activeindustrycollaborationandnetworks,and4)adequatefundingforresearchandearlycommercialization.Inaddi-tion,theexistenceorcreationofastrongandsophisticatedlocalhomemarkethasplayedanimportantrole.

TheincentivesysteminSwedendoesnotprovideenoughimpetusforphysiciansanduniversitiestodoenoughappliedresearchandcommercializeideas.Itistypicallyconsideredmoreacademicallyrewardingtoconductbasicmedicalresearchthanappliedresearch,andcommercializationof


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researchoutputdoesnotprovidecareerbenefitsinthesamewayasinsomeothercountries,suchastheUS.Thistrans-latesintoaninsufficientlyentrepreneurialculture.Intermsofcapabilities,theshortageismainlyrelatedtocustomer-driveninnovationandcommercializationskillslikeinternationalmarketingandsalesandreimbursementmanagement.ThereisalsoageneralscarcityofconnectivityandnetworksinSwedentofacilitatecollaborationprojects,accessthehealth-caresystem,conductcross-disciplinaryR&Dandsupportcommercialization.Itisnoteworthyhowlittlethestakehol-dersknowabouteachother’sagendas,needsandassets.Ashortageoffundinghasalsoplayedarole,especiallythelimitedavailabilityofmedicaltechnology-specificresearchandproductdevelopmentfundingandearlyseedcapital.

Theseissuesarecomplex,andwhilemanyofthemhavebeenthesubjectofpastscrutiny,relativelylittleactionhasbeentaken.However,muchofwhatneedstobedonedoesnotrequiregrandreforms,andiswithinthereachandinfluenceofthekeystakeholders.Foreachstakeholder,aclearsetofactionsarerecommended.

Technical and medical universitiesneedto

1. Emphasizemedicaltechnologyinnovationandmake itahighpriorityontheirstrategicagendas,developcon- cretestrategicplanswithpriorityresearchareas,appoint medicaltechnologytaskforcestodeliveronthestrategic planandsecurefundingforresearchandcollaboration2. Mapandmarkettheirresearchcapabilitiestowardsthe industryandotheracademicinstitutionsanddevelop intellectualproperty(IP)sharingmodelstosimplifycol- laborationbetweenstakeholders3. Developmedicaltechnologyknowledgeplatforms,e.g., jointprofessorships,seminarsonhealthcareneeds, awardsformedicaltechnologyinnovationbasedoncross- disciplinarycollaboration4. Developandlaunchmedicaltechnologyeducational programsofrelevancetotheindustry5. Encourageandsupportresearchstafftofocusonmedi- caltechnologyresearchandproductdevelopment throughamedicaltechnology-targetedresearchfund6. Encourageandsupportcommercializationofresearch outputthroughhigh-qualitybusinessprogramsand incubators

University hospitals and county councilsneedto

1. Worktogethertoensurethatmedicaltechnologyinno- vationisahighpriorityontheirstrategicagendas, developconcretestrategicplanswithpriorityresearch areas,appointmedicaltechnologytaskforcestodeliver onthestrategicplanandsecurefundingforresearchand collaboration2. Increasecollaboration(productdevelopment,clinical researchandtesting,advisoryboards)with,andoutreach to,academiaandindustryandbetransparentabout clinicalproblemsinneedofmedicaltechnologysolutions3. Encouragehospitalstafftofocusonmedicaltechnology research,commercializationandclinicaltestingby includingcollaborationexperienceascriteriaforappoint- ingpositionswithinthehospital,makingfundingavail- able,creatingprestigiousinnovationawardsandmaking universities’businessprogramsavailableforhospitalstaff4. Ensurethathealtheconomicprioritiesaresetwithin countycouncilsandcommunicatedthroughouttheorga- nization

Companiesneedto

1. Identifyareasforinnovationsthatcanbesourced–and needtobesourced–fromoutsidethecompany2. Proactivelyreachouttoacademiaanduniversityhospitals inSwedentoexplorewhattheyhavetoofferinrelation totheseareas3. Buildbusinessorientedconnectionswithsmalland midsizedcompaniestoshareknowledgeinsalesandmar- keting,regulatoryandreimbursementissues4. EngageinaSwedish“focuscluster”

Governmentshouldconsider

1. Makingavailableasignificantmedicaltechnology- focusedclusterfundandmakeinvestmentssubjectto clearcommerciallyviableinvestmentcriteria2. Allocatingfundsforappiedmedicaltechnologyresearch withaneeds-drivenfocusforwhichindividualresearchers canapply3. Intentivizingacademicinstitutionstomotivateandsup- portresearchersincommercializationby,forexample, providingadditionalfundingforcommercialization,and reviewinganoptiontoincludeanadditionalregulated taskforuniversities(i.e.,commercializationofresearch output)


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Althoughachievable,thesumoftheseactionsrepresentsasignificantchallenge.Tomovequicklytoaction,itissug-gestedthatstakeholdersshouldfindanumberoffocusareas(“focusclusters”)forinnovationandcommercializationwherethereisnaturalenergytobuildon.Theseshouldbeareasthatrepresentsignificantunmetcustomerneedandfitwiththecapabilitiesoftheacademicinstitutions,andwherethereisanexistingandmotivatedlargecompanywhichiswillingtocommitandinvest.Candidatesforsuchfocusareascouldbeelderlycare,aspecificcancersegment,e-healthorpatientaids.TheambitionlevelforSwedishleadershipshouldbesetveryhighinordertofocustheagendasofallkeystakehol-

ders.Stronglocalnetworksneedtobebuilttoorchestratethedevelopmentandresourcesettingofthesefocusclusters.Thesenetworkscaneitherbebasedonexistingones,liketheCentreforTechnologyinMedicineandHealth(CTMH)ortheyneedtobebuilttosuitthespecificneedsofeachcluster.

***Swedenhasastrongfoundationtobuildoninthemedicaldeviceindustry,butachievingtheambitousgoalslaidoutinthisreportwillrequirealevelofcollaborationandcollectiveenergythatisstarklydifferentfromtoday.Furtheranalysisisoflimitedvalue,andactionisoftheessence.


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About this report

2Inrecentyears,medicaltechnologyinSwedenhasattractedmoreinterestfrompoliticians,venturecapitalists,themediaandotherinstitutionsthanbefore.Inearlyspring2007,theRoyalInstituteofTechnology(KTH)inStockholminvitedrepresentativesoftheSwedishmedicaltechnologyindustry,KarolinskaInstitutet(KI)andKarolinskaUniversityHospitalintodialogue.TheaimwastodiscussthechallengesandpotentialoftheSwedishmedicaltechnologyenvironment.Morespecifically,attentionwaspaidtotheconditionsneces-sarytocreateanefficientinnovationprocessthatincludestheindustry,theuniversitiesandthehealthcaresystem.Asaresultofthisdiscussion,KTHtooktheinitiativetocreatetheprerequisitesforamajornationalstudyonthesubject.Duringthespringof2007thevicepresidentcommissionedtotheCentreforTechnologyinMedicineandHealth,CTMH,(ownedbyKTH,KIandtheStockholmCountyCouncil)to

leadthestudy.Asteeringgroupwascreatedwithrepresen-tativesfromKTH(SchoolforTechnologyandHealth),KI(UnitforBioEntrepreneurship)andKarolinskaUniversityHospital(FoUU,DepartmentforResearch,DevelopmentandEducation).Thegroupgatheredfinanciersandpartnerstothestudyandlaunchedthestudyinthesummerof2007.

Thescopeoftheworkhasbeentoidentifyandigniteactionrelevanttoimprovingthepossibilitiesandtheclimateformedicaltechnologyindustry,researchandhealthcareinSweden.Asthereportanditsrecommendationsshow,thereareseveralactionsthatcanandneedtobetakenbytheinsti-tutionsandcompanies.Notallsolutionsarecomplex.Andthereisaneedforactingwithasenseofurgency.

Backgroundtothereport............................................................................................................................................................................................................................


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ThemajorfocusofthisreporthasbeentoprovideaholisticreviewoftheSwedishmedicaldeviceindustrybydrawingonexperiencesfromtheformerandcurrentsituation,andnatio-nalandinternationalindustry.Themainquestionsaddressedinthereportare

• HowhastheSwedishmedicaldeviceindustryperformed overthelastfivetofifteenyears?• Whatarebestpracticeexamplesforcreatingastrong medicaldeviceindustry?• Whatlessonscanbelearnedfromtheseexamples?• WhatshouldSwedishstakeholdersdotosecurethe futuresuccessoftheindustry?

ManyexcellentreportshavebeenwrittenoverthelastfewyearsonhowSwedencanimproveitspharmaceutical/bio-

technology/medicaltechnologyindustryandresearch.Thisreportdiffersfromotherreportsinthreeways

• First,itisfocusedsolelyonmedicaldevicesanddiag- nostics(fordefinitionpleaseseeappendix)• Second,itconcludesthattheexistingindustryisactually performingbetterthanmanyreportshavehighlightedas thereisapositivetrendinGDPcontribution,number ofemployees,productivity,andexports.Yetthereport doeshighlightthatthebarforsuccessintheindustryis goingupandthatSwedenlackssomekeyconditions, indicatingthatactionisneeded• Third,therecommendationsarefocusedoncollaboration andwhateachstakeholdercandotocontributerather thansolelyrelyingongovernmentintervention

Commentsonfocusandcontent..................................................................................................................................................................................

Thesteeringgroupfortheprojecthasconsistedofrepresen-tativesfromKTH,KIandKarolinskaUniversityHospital:Lars-ÅkeBrodin(KTH),BertilGuve,chairman(KTH/CTMH),LarsKihlström(KarolinskaUniversityHospital),BoNorrman(KI),andCarlJohanSundberg(KI).Theste-eringgrouphasreportedtothedeputypresidentofKTH,MargaretaNorellBergendahl.

McKinsey&Company,aninternationalmanagementcon-sultingfirm,hassupportedthesteeringgroupintasksoffactgatheringandanalysisby

• Conductingapproximately50interviewswithkeystake- holders(CEOsofmedicaldevicecompanies,hospital CEOs,presidentsofuniversities,researchers,etc.)• Conducting4workshopswithover40stakeholderrepre- sentatives• Interviewinginternationalmedicaldeviceexpertsto understandinternationalcases

TheultimateobjectivehasbeentomapoutthecurrentstateoftheSwedishmedicaldeviceindustryandoutlinerecom-mendationsforthefuture.

Modusoperandi...............................................................................................................................................................................................................................................................................

ForquestionsregardingthisreportpleasecontactBertilGuveattheCentreforTechnologyinMedicineandHealth(CTMH;KTH-KI-SLL).Foradigitalversionofthisreport(PDF)pleasevisitwww.ctmh.se

Contact................................................................................................................................................................................................................................................................................................................................


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The medical device industry is a large and increasingly important contributor to a modern economy

3The medical device industry has seen strong growth in recent years, and has delivered innovations over the last �0 years that have improved the health and welfare of millions of people throughout the world.

The global medical device industry – an explosion in innovation

Note: See appendix for explanation of abbreviations and definitions

Source: Interviews with medical device industry representatives

1980 – 90s

1950s

1960s1970s

• External Defibrillator• Intra-ocular lens• Haemodialysis

• X-ray Angiography• External Pacing• Fixed rate implanted pacer• Charnley Intramedular hip• Heart/lung bypass

• Solid state X-ray• Mechanical Heart Valve• Intra-Aortic ballon pump• IPPV ventilators• Artificial heart implant• Fiber optic endoscopy• CABG procedure

• High quality Ultrasound• CT• PTCA• Diagnostic Electrophysiology• Trans-cut. nerve stimulator• Hollow fibre dialysis• PTFE vascular grafts• Pulse oximetry• Skin staplers• Radial Keratotomy

• Digital Subtraction Angiography• MRI• Nasal ventilation for sleep apnea• Bone stimulation• Implanted defibrillators• Epilepsy ‘pacers’• Coronary stenting• Radioablation• Endoscopic surgery• Intravenous oxygen therapy• Tissue growth factors• Drug eluting stents• Xeno-transplantation• Artificial bone

1940s

EXAMPLES


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TheglobalmarketformedicaldevicestodayismorethanUSD200billionandisestimatedtogrowbyapproximately7%peryear1.Itemploys800,000individualsthroughouttheworld2(whereofapproximately10,000areinSweden).WhiletheUSishometothelargestshareoftheindustry,anumberofothercountries(e.g.,Germany,SwitzerlandandJapan)accountforasignificantshare,includingSweden3.Inaddi-tion,themedicaldeviceindustryhasdeliveredmoreshareholdervaluethanmanyotherindustriesoverthelast15years4.

Themedicaldeviceindustryisprojectedtocontinuetoachievestronggrowthandtobeacatalystforsubstantialjobcreation.Twomainfactorsfueltheindustry’sgrowth.First,theongoingdemographicshift,withanagingpopulationindevelopedcountries,islikelytoleadtoincreaseddemandforhealthcareandhealthcare-relatedproductsandservices.Second,thereisagrowingimportanceoflifestyle-relateddiseases(weight-relatedconditions,type2diabetes,heartattacks,etc.),whichinmanycasesincreasethedemandforbothpharmaceuticalsandmedicaldevices.Inadditiontothesetwofactors,increasingwealthindevelopednationsdrivesdemandforadvancedhealthcare,withtrendsshiftingtowardsgrowingimportanceofadvanceddiagnostics(e.g.,imagingtechnologies)andminimallyinvasivetechnologies.

Inthefuture,expansionofhealthcareinunder-developedmarketsisalsolikelytogrowthemedicaldevicemarket5.

Thereareseveralimportantbenefitsofthemedicaldeviceindustry.Inaglobalizedlabormarket,inwhichlow-skilledworkisincreasinglysubjecttooffshoring,countrieswillfindthatacomplexanddemandingindustrylikemedicaldevicescanbeanimportantsourceofcompetitiveadvantage.Theindustrycanalsoserveasasupportingmechanismforathrivingacademicenvironmentaswellascreateattractivehighincomejobs.Furthermore,thereisarippleeffect,witheveryjobintheindustrysupportingseveralotherbusines-sesinadjacentindustriesandtherebycreatingadditionaljobopenings.TheMilkenInstitute,anAmericanindependenteconomicthinktank,suggestsinastudyoftheSanDiegoareathateachjobinthemedicaldeviceindustrycreates1.5additionaljobsinotherindustries6.Applyingthisfactortotheoverallindustry,over2millionjobsaresupportedbythemedicaldeviceindustryglobally.

However,asbeneficialasthesecontributionstotheoveralleconomymayseem,themostobviousandmostimportantbenefitofthemedicaldeviceindustryisthatitsaveslivesandhelpscureandtreatdiseases.

Global annual growth in total return to shareholders* by industryCAGR 1��1–200�, percent

* Not adjusted for inflation

Source: Datastream

8

4

7

8

9

10

10

15Biotech

Medical devices

Telecom

Automotive

Total global market

Consumer goods

Pharmaceuticals

Pulp and paper

1 Opportunitiesinglobalmedicaldevicesanddiagnostics,HealthResearchInternational,2006

2 USCensusBureauannualsurveyofmanufacturers;Eurostatannualdetailedenterprisestatistics;MHLW


4 Datastream


6 America’sBiotechandLifeScienceClusters:SanDiego’sPositionandEconomicContributions,MilkenInstitute2004


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Examples of remaining opportunities for breakthrough innovations

Note: See appendix for explanation of abbreviations and definitions

Source: Interviews with medical device industry representatives

Wound Management• Growth factors• Tissue engineering

In Vitro Diagnostics• Diabetes (glucose testing)• Molecular diagnostics

Neurology/Neurosurgery• Neurostimulation• Central nervous system (CNS) function monitors• See also under “vascular surgery”

Cardiology - medical• Biodegradable drug eluting stents • Cell therapy• Percutaneous valves

Vascular surgery• Vulnerable plaque • Transvascular drug delivery

Operating room support • Visualization• Robotics• Information

Urology surgery• Benign Prostatic Hyperplasia (BPH)• Incontinence• Brachytherapy

Obstetrics/Gynecology• Fertility• Endometrial ablation• Female incontinence

Orthopedic surgery• Disk/spine repair• Soft tissue repair• Accelerated fracture healing• Artificial bone

Emergingbreakthrough

areas

InSweden,anumberofstakeholderswouldbenefitfromthecontinuedsuccessofastrengthenedmedicaldeviceindustry7

Universitieswouldgaina)areasontodevelopworldclassskillsincoreareas,b)potentiallylargerbudgetsfromprofit-sharingwithfocusclusters8,aswellasc)additionalresearchfundingthroughincreasedcollaborationwithindustry.

County councils and university hospitalsmightgainadditionalfundsthroughcollaborationwithindustryonproductdeve-lopmentinitiativesandclinicaltesting.Theseinstitutionswouldalsobenefitfromamoreinnovativeenvironment,whichcouldleadtoearliertreatment(throughincreasedinvolvementinclinicaltrials)andbetter,morecost-efficienthealthcare.Healthtechnologywouldbeaddedaspartoftheregionaldevelopmentengine.Aconsciousmedicaltechno-logydevelopingenvironmentcouldhelptostimulateacon-tinuingqualityimprovementculture,whichbenefitspatientsimmediately.Swedishhospitalscouldfurtherstrengthentheirbrandasbeingasourceofkeyinnovations.Inaddi-tion,throughincreasedfocusonhigh-qualityneeds-drivenresearch,directorsofclinicaldepartmentswouldbeabletoattractclinicianswithsuperiorskillsinresearch.

Companies (domestic and foreign)wouldhaveanopportu-nitytoa)sourcetheinnovationandcoreworld-classskillsatSweden’suniversitiesandhospitals,b)testanddevelopproducts,andconductclinicaltesting,inamoreaccessibleandhigh-qualitycareenvironment,andc)developcloserrelationshipstoresearchers,cliniciansandothercompaniesthatwouldfacilitatetheirdevelopmentandgrowthaswellassecureeasieraccesstonewmanagementtalent.

Theeffectisthatthegovernmentwouldenjoynotonlyahigherdomesticemploymentinwell-payingjobs(whichwillstimulatefurtherjobcreationandgeneratemoretaxrevenue)butalsoanimprovedresearchenvironment,whichwouldbenefitrelatedindustriesandacademicfields.

Thefinalstakeholdergroup,investors,wouldalsoprofitviaa)newinvestmentopportunitiesinmedicaltechnologyaswellasotherindustriesandb)occasionstostrengthenexistingport-foliocompaniesthroughastrongermedicaltechnologynetwork.

Giventhesebenefits,thedevelopmentofastrongandvibrantmedicaldeviceindustryshouldbeactivelyencouragedbycountries,companies,academia,investors,thehealthcaresys-temandprivatecitizens.

7 Interviewsandworkshopspursuedduringthiseffort

8 Medicaldeviceclustersfocusedonsub-segments,e.g.,elderlycare,drivenjointlybykeystakeholders(forfurtherdescription,seechapter7)

NOT EXHAUSTIVE


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Sweden’s medical device industry has a proud history, but the bar for success is rising and Sweden largely relies on aged innovations

�Historically, the Swedish economy has benefited from the

strength of the Swedish medical device industry. However,

many of the innovations that represent the backbone of the

industry today date back 30 to �0 years, which raises the

question of whether Sweden can sustain and strengthen its

position through a continued stream of innovation. The bar for

success is rising and there are signs that Sweden is starting

to lose some of the distinctiveness it has enjoyed in the past.

TheSwedishmedicaldeviceindustryisalarge(SEK60bil-lion)andhighlyconsolidatedsector(fivecompaniesrepresentapproximately75%ofrevenues9)–onewhichhasachievedconsiderablesuccessthroughouttheworld.WhileSwedenaccountsforlessthan1%oftheglobalmarketformedical

devices,theSwedishmedicaldevicecompanies10accountforapproximately4%oftheglobalmarketrevenues11.AndinanindustrydominatedbyUSplayers,Swedenhastwocompa-nies(GambroandGetinge)ontheglobaltop-50list12.

9 ReviewofmedicaldeviceanddiagnosticcompaniesinSwedenbasedondatafromStatisticsSweden,Odin,SwedishcompaniesRegistrationOffice,VINNOVA,SwedishMedtechand interviews.RevenuedatafromannualreportsorOdin

10DefinitionofSwedishcompaniesinthisreport:CompaniesownedbyaSwedishcitizenoraSwedishcompany,companieslistedontheSwedishstockexchangeandcompaniesoriginating fromandwithoperationsinSwedenandthatcurrentlyareownedbyany(domesticorforeign)privateequityfirm

11Opportunitiesinglobalmedicaldevicesanddiagnostics,HealthResearchInternational,2006;TheWorldMedicalMarketReport,EpsicomBusinessIntelligence,2005

12Opportunitiesinglobalmedicaldevicesanddiagnostics,HealthResearchInternational,2006

Swedenhasaproudhistory...............................................................................................................................................................................................................


1�

Annual sales of Swedish companies by company and by industry segmentSales from latest available year (200� or 200�); 100% = SEK ~�0 billion

Note: Based on 31� identified companies (identified from Swedish industry, SNI codes 33.101, �3.103, 2�.�2, 3�.�3, �1.��, �1.��1, interviews, trade organizations,

VINNOVA, and patent publications). Financials from latest available year (200�-200�)

* Data from 200�. Revenues from Gambro Healthcare US that were divested in 200� excluded. Revenues from remaining Gambro Healthcare (non-US clinics)

that were divested in 200� included (accounting for 13% of total revenues in 200�)

** Assuming �0% of AstraTech’s revenues are in urology and renal and 30% are in dental

Source: Statistics Sweden; Swedish Companies Registration Office; Odin; VINNOVA; Swedish Medtech; Interviews

7%

26% Urology & Renal

Surgical tables, lights andfixed systems

13% Dental

Energy-basedtechnologies

Infection control 7%

Surgicaldressings,drapes

Patient aids 4%

Wound care 4%

Blood processingand therapyproducts 4%

Other 14%

8% 12%

26% Gambro*

23% Getinge

12%MölnlyckeHealthcare

NobelBiocare 9%

Elekta 7%

Astra Tech 5%

Phadia 3%Permobil 2%

Other 13%

Sales by company Sales by segment**

Top 50 global medical device and diagnostics companies, 2006Revenues in USD billions

* Data from 200� (includes non-US dialysis clinics)

Source: Company filings -

20.21. J&J MD&D (US)

16.62. GE Healthcare (US)

12.73. Fresenius (GE)

12.34. Medtronic (US)

10.35. Siemens Medical (GE)

9.66. Tyco Healthcare (US)

9.37. Fuji Medical Systems (JP)

8.58. Philips Medical (NL)

8.39. Baxter (US)

7.810. Boston Scientific (US)

7.011. Roche Diagnostics (CH)

5.812. Becton Dickinson (US)

5.413. Stryker (US)

4.914. Alcon (CH)

4.215. B. Braun (GE)

4.016. 3M (US)

4.017. Abbott Labs (US)

3.518. Zimmer (US)

3.319. St. Jude Medical (US)

2.820. Smith & Nephew (UK)

2.621. Olympus (JP)

2.522. Beckman Coulter (US)

2.523. Eastman Kodak (US)

2.524. Terumo (JP)

2.325. Synthes (CH)

2.226. Schering AG (GE)

28. Gambro* (SE)

1.339. Kimberly Clark (US)

2.127. Biomet (US)

2.028. CR Bard (US)

1.929. Bayer Diagnostics (GE)

1.930. Dade Behring (US)

1.831. Cardinal Health (US)

2.0

1.833. Getinge (SE)

1.634. Varian Medical Systems (US)

1.635. Dräger Medical (GE)

1.536. Toshiba Medical (JP)

1.537. Guidant (US)

1.538. Invacare (US)

1.340. Biomerieux (FR)

1.341. Hill-Rom (US)

1.042. Respironics (US)

1.043. Hitachi Medical (JP)

1.044. Edwards Lifesciences (US)

0.945. Hospira (US)

0.546. Coloplast (DK)

0.547. Bristol Myers Squibb (US)

0.548. Dentsply (US)

0.549. Hartmann Group (GE)

0.450. Bracco Diagnostics (IT)

( ) = Nationality

ESTIMATE


1�

Themedicaldeviceindustryhashistoricallyperformedbet-terthanmanyotherindustrialsectorsinSweden(e.g.,tele-com,automotive,andpulpandpaper)inGDPcontributiongrowth,whichwasapproximately10%CAGR131999to2005(comparedto-6to5%forpharmaceuticals,automotiveandpulpandpaper).

Thishasbeendrivenbyanemployeegrowth,whichwasapproxroximately4%CAGR(comparedto-3%to2%fortheotherindustries)andstrongproductivityimprovementsof

CAGR11%14overthesameperiod.Currentlyapproximately10,000peopleareemployedinSwedeninthemedicaldeviceindustry15ofwhichalargeshareisemployedbythetopfiveSwedishcompaniesandlargeglobalcompanieswithopera-tionsinSweden.

Inaddition,theSwedishmedicaldeviceindustry’snetexportshavebeenfairlystablecomparedtomanyothercountriesandhavebeenexperiencingaslightoverallincrease.

Note: Value add as share of GDP. Sample of companies included in respective industry: Pharmaceuticals: AstraZeneca, Pfizer, Recip; Automotive:

Volvo, Scania, SAAB automobile; Pulp & Paper: StoraEnso, SCA, Billerud; Telecom: Ericsson, Flextronix, Powerwave technologies

* 1��–2003, numbers past 2003 are not disclosed by Statistics Sweden. Industry sector’s negative contribution to GDP in 2001 driven by

large losses by several players in the industry.

Source: Statistics Sweden

-0.2

0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

2.2

1999 2000 2001 2002 2003 2004 2005

Year

Industry share of Gross Domestic Product (GDP)Percent

Pulp & paper

Automotive

Pharmaceuticals

Medical devicesand diagnostics

Telecom

5.4%

-4.3%

-6.1%

9.7%

-26.9%*

CAGR 1999–2005

GDP contribution growth of Swedish medical device industry compared to other industries

13SeeappendixforexplanationofCAGR

14StatisticsSweden

15StatisticsSweden

ESTIMATE


1�

Note: Sample of companies included in respective industry: Pharmaceuticals: AstraZeneca, Pfizer, & Recip; Automotive: Volvo, Scania, SAAB automobile;

Pulp & Paper: StoraEnso, SCA, & Billerud; Telecom: Ericsson, Flextronix, & Powerwave technologies


0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

55,000

1999 2000 2001 2002 2003 2004 2005

Year

Medical devicesand diagnostics

Pharmaceuticals

Automotive

Pulp & paper

Telecom

Number of employees in Sweden by industry

1.6%

-0.7%

-2.6%

3.5%

-8.5%

CAGR 1999–2005

Employee growth of Swedish medical device industry compared to other industries

93

145 160

49

Getinge AB

~200

~40~760b ~1,000Gambro

474Nobel Biocare

~100

~25

121

~300MölnlyckeHealthcare

71

52

28200Elekta

R&D

Marketing & sales

Manufacturing

Other

22733

750 251 1,306

~175

100

165

250~815dSt Jude Medical

20

70

1250c450

380 470Becton Dickinson

Johnson & Johnson

Medtronic

1,700GE Healthcare

~15430 120

Swedisha companies Foreign companies

128

66257eSiemens Medical

Solutions

63

Selection of Swedish and foreign medical device companies in Sweden by employee number and typeData as of November 200�

Note: a As defined in this report (see reference 10)

b Both manufacturing and other

c Both manufacturing, marketing & sales and other

d Two different companies

e Including 3�–�0 people in Finland

Source: Swedish Medtech; Interviews with company representatives; Corporate web sites; Annual reports

ESTIMATE

ESTIMATE


1�

* Not including sub suppliers

** 1��–2003, numbers past 2003 are not disclosed by Statistics Sweden

Source: Statistics Sweden; Swedish National Accounts

-20

0

20

40

60

80

100

120

140

160

180

200

Year

20042002

Medical devices

Automotive

Pulp & paper

Telecom

Sweden total

2000

Pharmaceuticals

Productivity, value add/hours workedIndex, 100 =1999

CAGR 1999–2005

11.1%

4.0%

10.3%

1.8%

-3.3%*

-17.5%**

Productivity of Swedish medical device industry compared to other industries and average

16UNComtradedatabaseSource: United Nations Comtrade database

0

500

-2,000

-1,500

-1,000

-500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1990 92 94 96 98 2000 02 04 2006

Sweden

Germany

Ireland

Japan

Netherlands

UK

US

Year

Net exports of medical instrumentsUSD millions

Swedish net exports of medical instruments compared to other countries

ESTIMATE


Source: United Nations Comtrade database

0

50

100

150

200

250

300

350

400

1990 92 94 96 98 2000 02 04

Year

2006

CAGR 90–06:2.8%

Net exports of medical instruments, SwedenUSD millions

Swedish net exports of medical instruments

Swedenhasasetofstronganduniqueprerequisites......................................................................

Interviewswithcompanyrepresentativesandworkshopsper-formedtosupportthiseffortrevealthatthelong-termcom-petitivenessoftheSwedishmedicaldeviceindustryhasbeenenabledbytwoprimaryfactors

• Highqualityhealthcaresystem.Swedenhasareputation forrigorousevidence-basedhealthcareresultingina healthypopulation.Ithasalsomeantthatmanycompa- nieswishtoleveragethe“approvedinSweden,usedby Swedes”brandasitincorporatesinternationally-renowned medicalresearcherswhostrivetoimprovemedicalcare. Thebrandalsorepresentsawell-educated,socio-econo- micallystablepopulation,withhightrustintheirhealth- caresystem,andagreaterwillingnesstoparticipatein clinicaltrialsthaninmanyothercountries• Anetworkoflarge,coordinateddiseasedatabasesthat captureinputfromextensive“patientregisters16”.These databasesareuniqueinternationallyandprovidenotonly agoodtoolformeasuringoutcomesofdevicesbeing testedbutalsomayindicateanareaofunmetneed (orroomforproductdevelopment)ifthereareareaswith pooroutcomes

Otherreports17havecitedadditionalfactorsbenefitingSweden’smedicaldeviceindustry.Thesefactorsinclude:

• Strongindustrytradition,withgoodengineers• Government-initiatedinstitutionsfocusedonearlystage commercializationfunding• Competentandefficientregulatoryauthorities,whoare knownforbeingefficientintheirapprovalprocess, leadingtoshorterleadtimesthaninsomeother Europeancountries• Teacher’sexemption18thatgivesresearchersandscientists atacademicinstitutionsapersonalincentivetocom- mercializefindings,sincetheyown100%oftheintellec- tualpropertyofanyfindings

ThequestioniswhetherSwedencankeepupthisstrongperformance.Theindustrytodaystillrelies,forthebulkofitsrevenues,oninnovationsthatare30to50yearsold(e.g.,thegammaknife,dentalimplantsandthedialysismachine).Inordertoensurecontinuedsuccess,acontinuedstreamofinnovationandglobalcommercializationisrequired.

16ManagedbySocialstyrelsen,www.socialstyrelsen.se

17E.g.,MedicinförSverige!Nyttlivienframtidsbransch,SNSförlag,2007

18Teacher’sexemption,seeappendix

20 Action MedTech – Key Measures for Growing the Medical Device Industry in Sweden

21

Overthepastfewdecades,theglobalmedicaltechnologyindustryhasdevelopedintoamuchmorechallengingenvi-ronment.

Rising bar to achieve product differentiationTherearemanymoreproductsonthemarkettodaycompa-redto30yearsago.Competitionforgroundbreakingideasisfierceandnewimprovementsarefightingforattention.Growthisincreasinglydrivenbyimprovementinexistingproducts,andasaresult,theclinicalandeconomicdifferenti-ationbetweenproductshaslessened.Manycompanies’R&Ddepartmentsarefocusedondevelopmentofintegratedsys-temsandsolutions,notsimplyproductsalone.Forexample,Kineticsdoesnotjustoffera“WoundV.A.C.”19productbutalsoprovideswoundcarenursestotrainhospitalsandhomecarenursesonitsuse,aswellasreimbursementspecialiststoassistwithbilling.Intoday’senvironment,foracompanytohaveacompetitiveadvantagewiththesemorecomplexoff-eringsitmustdependonheaviermarketingandsalesefforts,thusincreasingthecostofdoingbusiness.

Longer regulatory approval timesIntheEuropeanUnion,regulatorydemandsonmedicaldeviceshaveintensifiedduetotheintroductionoftheCEmarking20inthe1990s.WhiletheCEmarkingsimplifiestheoverallregulatoryprocessinEuropebyeliminatingtheneedfordevicestobecertifiedbyeverycountry,ithasledtostricterregulationsinseveralcountries.Theneteffectisthatahigherinvestmentisrequiredbeforenewproductsgeneraterevenues.

More complex customer landscapeWhilephysicianpreferenceisstillanimportantdecidingfactorforpurchasingmedicaltechnology,payors(e.g.,in-surancecompanies),providers(e.g.,hospitals)andpatientsareincreasinglyimportantcustomers.Hence,anexpandedandimprovedmarketingeffortthatcommunicatesproduct/therapybenefits,andmakescomplexclinicaloutcomedataunderstandabletothisdiversegroup,isrequired.Forexample,Johnson&Johnsondirectlymarketsitshipreplace-mentstopatientsintelevisionadsintheUnitedStates21.

Increasing regulatory demands, especially for combination pharma/device productsToday’sadvancedproductsoftencombinedevicecapabilitieswithpharmaceuticalcharacteristics(e.g.,drug-elutingstentsthattreatheartdisease).Thesecombinationproductsrequireamoreadvancedregulatoryapprovalthatincludesnotify-ingbodiesthatareabletoensuresafetyofboththedevicecomponent(traditionalCEmark)andthedrugportion(tra-ditionalEMEA22)withadvicefromrelevantpharmaceuticalauthorities.Manytimes,thedevicecompaniesarenotoffe-ringanewdrugbutareofferinganewdeliveryroute(drugisdeliveredbythedeviceasopposedto,forexample,orally)andthesafetyofthisnewroutemustbeassessed.AcombinationproducttypicallywillhaveanunpredictableroadaheadforregulatoryapprovalintheEU.Comparedwithpuredevices,moresophisticatedin-houseclinicalandregulatoryskillsarerequiredtotacklethecombinedpharmaceuticalapprovalpro-cess.Theresultislongertimelines.

Cost pressureTheincreasedcostpressureonhealthcaresystemschallengesthemedicaldeviceindustry.Hospitalsfacecostandmarginpressurefromdecliningreimbursementlevels,whilepayorsareconcernedaboutrisinghealthcarecostsgeneratedfromincreasedutilizationoftechnologyandincreasinglyrequireevidenceofhealth-economicbenefitsbeforepayingfornewerproducts.Financially-motivatedphysicians(viaphysicianownershipandprofitsharing)mayturnawayfrompremiumbrandsandalsodemandimprovedeconomicevidencebeforetheyagreetousecertainproducts.Hence,devicecompaniesareforcedtodelivercompellingeconomicdataaswellasclinicaldatatohospitals,payors,andphysicians,especiallyfornew,high-priceproductsandprocedures.Hospitalsalsogeneratepressureinanotherway:hospitalgroupsareforminglargerandincreasinglymoreskilledpurchasingorganizations.Asaresult,devicecompanieswillneedtobuildorenhancein-housecontractingcapabilitiestodirectlynegotiateandcontractwithbuyinggroupsandhospitals.Clearpricingstra-tegies,simplebutrobustcontracttemplates,andcommercialcapabilitiesofthesalesforcewillthusbecomeincreasinglyimportantfordrivingpricing/contractingdecisions.

Thebarforsuccessisrising:globaltrends..............................................................................................................................

19 WoundV.A.C.isalowtechnologydevicemadeofsponge,plasticsheetandvacuumdevicethatrevolutionizedthetreatmentoflargechronicwounds.KineticConceptsInc.,www.kcil.com

20CEmarking:seeEuropeanCommission,GuidetotheImplementationofDirectivesBasedonNewApproachandGlobalApproach,chapter7 (ec.europa.eu/enterprise/newapproach/legislation/guide/index.htm)

21Johnson&Johnson,www.jnj.com

22EMEA,EuropeanAgencyforEvaluationofMedicalProducts,www.emea.europa.eu


22

IsSwedenrisingtothechallenge?..........................................................................................................................................................................

Inmanyways,theSwedishmedicaldeviceindustrycontinuestodoverywellandmostoftheleadingcompaniesarekeep-ingtheirposition.WhentryingtoassesswhetherSwedenisontherighttrackitis,however,importanttotestthedyna-micsoftheentireindustry,fromideageneration,throughtotheestablishmentofnewandexcitingcompanies,aswellastheclimateforandperformanceoftheestablishedlargecom-panies.Inalloftheseareas,thepictureismixed.TherearesignsthatSweden’smedicaldeviceindustryisstartingtolosesomeofitsdistinctivenessintherelevantresearchcommuni-tiesandthatSwedishdevicecompaniesstruggletoturngoodideasintoproducts.ThesmallandmediumsizedSwedishcompanieshavearelativelylimitedpotentialtogeneratenewgloballeaders.And,whileSwedenhasstrong,leadingglo-balcompanies,itisnotabletomaximizethevalueofthesecompanieswhenitcomestobuildingstrongnetworksandinnovationclusters.Indeed,adisproportionateshareofthelargecompaniesisfocusedontheslower-growthpartsoftheindustry.

Distinctiveness in innovation and commercialization ThereviewofSweden’sstrengthsininnovationisbasedonanalysesoftwoindicators:articlespublishedandpatentsfiled23.Historically,Swedenhasbeenexceptionallysuccess-fulinbothareas,butothercountriesarecatchingupandSwedenhasdroppedtobeing“average”relativetoEuropeanpeercountries,suchasSwitzerland,Denmark,GermanyandtheNetherlands24.

Medical technology publicationsaredifficulttoanalyze,asthereisnoobviouswaytoselectpublicationsrelatedtotheverydiversefieldofmedicaltechnology.Therearefewjournalsdedicatedtomedicaltechnology,andjournalsthatpublishpapersonmedicaldevicedevelopmentspecializeeitherintherelatedtherapeuticarea,orintherelatedtech-nologyarea.ForthisanalysisthechoicewasmadetolookatpublicationsthatareindexedinMedline25underaselectionofMedicalSubjectHeadings26(commonlyknownasMeSHterms)thatcloselyrelatetoourdefinitionofmedicaldevicesanddiagnostics.Thisdoesnot,however,separatedevelop-mentofmedicaldevicesfromappliedresearchusingmedicaldevicesandtechnologies.

Usingthismethod,itisclearthatalthoughSwedishre-searchershavemaintainedahighlevelofpublicationsoverthepast15years,thepatternissimilartowhatwillbeshownforpatents.Swedishgrowthhasbeenslow,othercountriesarecatchingupandifthetrendcontinues,SwedenislikelytofallbehindEuropeanpeersinthenumberofmedicaltech-nologypublicationspercapita.

Swedishpublicationsrepresent1.2%ofallthemedicaltech-nologypublicationsinMedline.Sweden’sareasofstrengtharecloselylinkedtoitslargestcompanies,asshownbyreviewingpublicationsineachmedicaldevicesegment.Incomparisontotheaverage,Swedishpublicationsondentalandradiotherapysubjectsrepresentalargershareofthetotalpublicationsintheirrespectivefield,whichislikelytobedrivenbyNobelBiocareandElekta.Surprisingly,urologyandrenalmedicinedonotstandout,despitethepresenceofGambro,whichproducesrenalproducts.

23 Noneofthemeasureschosenareperfectgiventhediversenatureofthemedicaldevicefield.Usingexistingdatasources(e.g.,patentdatabasesandMedline)doesnotallowforacomple- telycomprehensiveandexclusiveanalysisofmedicaldevicepatentsandpublicationsasthedatabasesarenotcategorizedwellenough.Despitetheseconstraints,thebeliefisthattheseindi- catorstogethergiveagoodindicationontheinnovativeprojectsandkeyopinionleadersinSweden24Pleasealsoseea)theEuropeanInnovationScoreboard2006–ComparativeanalysisonInnovationPerformanceaccessedviahttp://trendchart.cordis.europa.eu/whichindicatesthat Swedenbelongstothe“Innovationleaders”butitsleadisdecliningb)InnovationIndicatorforGermany2007,DeutscheTelekomStiftungwhichindicatesthatSwedenisthecountry whichthegreatestcapacitytoinnovate

25Medline(MedicalLiteratureAnalysisandRetrievalSystemOnline),accessedviaPubMed,www.ncbi.nlmnih.gov/sites/entrez

26MeSHtermsusedarereviewedintheappendix


23

Note: Hits include medical technology development as well as applied medical technology

* Medline articles indexed by selected medical technology MeSH terms (see appendix)

Source: Medline accessed August 200�

Medical technology* publications by country and yearNumber of publications/million inhabitants, 1990–2005

0

50

100

150

200

250

300

1990 1995 2000 2005

Year

Sweden

Denmark

Germany

Netherlands

Switzerland

UK

1.7%

2.2%

4.7%

8.0%

11.2%

7.3%

CAGR1991–2005

Medical technology* publications by country and yearNumber of publications/million inhabitants, 1��0–200�

Note: Index explanation: E.g., index 10� means that in this segment, the country has �% higher share of segment specific articles in Medline (as share of total

segment specific articles in Medline) than the country’s overall share of medical technology articles in Medline

* Medline articles indexed by selected medical technology MeSH terms (see appendix). Include medical technology development as well as applied medical technology

Source: Medline accessed August 200�

Therapeutic areas

High share of publications (index >105)Average share of publications (index 95–105)Low share of publications (index <95)

Denmark

Sweden

Switzerland

Cardio-vascular

Urology andrenal

Netherlands

Radio-therapyOrthopaedics

DrugdeliveryRespiratory Dental

Diagnosticimaging

Surgicalinstruments

Nobel Biocare ElektaGambro

Philips

Novo Nordisk

Ireland

Korea

Synthes Straumann,Nobel Biocare

Dentium(bone implants)

Listem, Huvitz,Prosonic, DR Tech

Strength of research areas and correlation with local industryNumber of publications from national scientists/Total number of publications in the country, 200� Index, country share of all medical technology articles in Medline* = 100

ESTIMATE


2�

On patents,SwedenrankedsecondinEuropeintheearly90’s,basedonthenumberofmedicaltechnologypatentspercapita,closelybehindSwitzerland,butclearlyaheadofpeercountriessuchasDenmark,GermanyandtheNetherlands.Throughoutthe1990’sseveralofthesecountrieshaveincreasedtheirnumberofmedicaltechnologypatentsbymorethan10%annually,whileSwedishgrowthhasbeensignificantlylower,6.4%27.Today,SwedenisonthesamelevelasitsEuropeanpeers,andifthecurrenttrendcontinuesSwedenwillsoonseeitselffallingbehind28.

AbreakdownofthefiledpatentsbytypeofassigneeshowsthatinSweden,privateindividualsaccountforahigherpro-portionofthepatents(14%)thantheydoinpeercountries.Thebreakdownalsoshowsthatthisnumberhasdeclinedoverthepastsevenyears.However,thegreatestshareofpatentscomesfromcompanies,manyofthemactiveinthemedicaldeviceindustry2930.

27EuropeanPatentOffice,www.epo.org;WorldIntellectualPropertyOrganization,www.wipo.int

28Thisanalysisisbasedonaselectionofclasses(e.g.,A61B,A61C,A61D,A61F,A61G,A61H,A61J,A61L,A61M,H01J,H05G)intheInternationalPatentClassification(IPC)system thatmatchesourdefinitionofmedicaldevicesanddiagnostics.However,astheIPCclassesarenotdefinedtoseparatemedicaldevices,therearesomepatentsincludedthatarenot devices(e.g.absorbentpads)andsomethatareexcludedastheyarecategorizedundervariousotherIPCclasses(e.g.hearingaidsclassifyasloudspeakers)

29ReviewofallpatentsfiledtoWIPOinIPCclassesA61B,A61C,A61D,A61F,A61G,A61H,A61J,A61L,A61M,H01J,H05G,indexedbynationalityinDelphionPatentdatabase, www.delphion.com

30InSweden,roughly45%ofthepatentsfromotherindustriescomefromSCAHygieneProducts,astheIPCsystemunfortunatelydoesnotallowseparationofwoundcareproductsfrom absorptivehygieneproducts(diapers,femininehygieneproducts).IfexcludingSCAfromtheanalyses,privateindividuals’shareofpatentswouldbeevenhigherthan14%

* International Patent Classification (IPC) subclasses A�1B, A�1C, A�1D, A�1F, A�1G, A�1H, A�1J, A�1L, A�1M, A�1N, H01J, H0�G

Source: World Intellectual Property Organization; European Patent Office

0

10

20

30

40

50

60

70

80

90

100

110

120

130

Germany

Denmark

UK

Netherlands

US

Sweden

Switzerland

1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006

CAGR1991– 2006

14.4%

12.1%

6.4%

10.9%

9.0%

7.2%

12.6%

Medical technology patents by country and year Number of patents filed to the European Patent Office and to the World Intellectual Property Organization in medical technology* per million inhabitants, 1�� –200�

ESTIMATE


2�

a International Patent Classification (IPC) subclasses A�1B, A�1C, A�1D, A�1F, A�1G, A�1H, A�1J, A�1L, A�1M, A�1N, H01J, H0�G

b Sample includes, for example, SCA Hygiene Products and pharmaceutical companies

c ��% taken by Philips Electronics

d ��% taken by Novo Nordisk and Coloplast. Hearing aids however not included, as their IPC classification is loudspeakers etc.

Source: Delphion; Corporate web sites; Interviews

416

Israel

Other

International company,medtech

National company,medtech

Technology transfercompany

University/research institution

Private individuals

100% = 524276 560

NetherlandsSwitzerland

211

DenmarkSweden

Share of patents filed to World Intellectual Property Organization in medical technologya by assignee type, 2006

Percent

INDICATIVE

48

31 41

20

44

18

6

113

14

1

4

21

43b

13

9

4

79c

63

71d

34

4

8

Private individuals’ share of patents in Sweden compared to peer countries

* International Patent Classification (IPC) subclasses A�1B, A�1C, A�1D, A�1F, A�1G, A�1H, A�1J, A�1L, A�1M, A�1N, H01J, H0�G

** Sample includes, for example, SCA Hygiene Products and pharmaceutical companies

*** Companies in other industries include companies like Ericsson, SKF, AGA etc. Companies closely related to medical devices include biotech,

safety equipment, dental/orthopedic technicians etc.

Source: Delphion; Corporate web sites; Interviews

Share of Swedish medical technology patents* filed to World Intellectual Property Organization by assignee type and yearPercent

36 3731

127

11

3441 43

16

1

14

280

2003

276

2006

International company,medtech

Other**

Technology transfercompany

National company,medtech

100% =

Private individuals

0

17

0

2000

241Increased number of medical technology patents from contract manufacturers, companies in other industries, and companies closely related to medical devices***

Increase in patents from Elekta, Getinge, Mölnlycke, Gambro and Astra Tech, decline in patents from Nobel Biocare and small Swedish medtech companies

6.4%

20.1%

CAGR (numberof patents) Driver

2.3%

-0.2%

-1.2%

0.0%

INDICATIVE


2�

Dynamics of small and medium sized companiesThereare310smallandmid-sizedmedicaldeviceanddiagnosticcompaniesinSwedentoday(revenues<2000MSEK),butitappearsasfew,ifany,havethepotentialtogrowintolarge,globalplayers.

TobetterunderstandthesecondtieroftheSwedishmedicaldeviceindustry,areviewwasconductedofthemedicaltech-nologypatentsthatwerefiledbyprivateindividualsin2000,andoftheperformanceofasampleofexistingsmall/mid-sizedcompanies.

Thereviewof17ofthe42patentsregisteredbySwedishprivateindividualstotheWorldIntellectualPropertyOrganizationin2000showsthattenofthesepatentshavebecomecommercializedinsomeway.Threeofthemhaveresultedincompaniesbeingstarted,threeareincorporatedinexistingcompaniesandfourhavebeensold.Theresthavenotbeencommercializedinanyway.

Ananalysisoftheexisting310smallandmidsizedcom-paniesrevealsthatmost(208)areverysmall(revenueslessthanSEK10million31).AmongthecompanieswithrevenuesbetweenSEK10and2000million,growthhasaveraged15%peryearoverthepast8yearsandtheaverageEBITin2006was6%32.

31 Revenuedataismissingfor37ofthe208companies.AssumptionmadeinthiseffortisthatthesecompaniesaresmallwithrevenueslessthanSEK10million

32ReviewofmedicaldeviceanddiagnosticcompaniesinSwedenbasedondatafromStatisticsSweden,Odin,SwedishCompaniesRegistrationOffice,VINNOVA,SwedishMedtechand interviews.RevenuedatafromannualreportsorOdin

Note: Patents were randomly selected from total group of privately filed patents

* IPC classes A�1B, A�1C, A�1D, A�1F, A�1G, A�1H, A�1J, A�1L, A�1M, A�1N, H01J, H0�G

** Contact details to patent holders not found

Source: Delphion; Patent holder interviews

Frequency of commercialization

3

3

3110

717

Medicaltech-nologypatents2000 fromselectedand foundpatent holders

Notcommer-cialized

Commer-cialized

Sold,not usedtoday

Sold,likelyusedtoday

Incorp-orated in existingcompany

Base fornewstart-up

17%

Selected forinvestigation –patentholders found40%

Selected forinvestigation –patent holdersnot found**

Not selectedfor investigation

Medical technology* patents in WIPOfrom private Swedish inventors, 2000100% = 42 patents

Number of patents

3 companies active today based on patent taken in 2000, all on a small scale

INDICATIVE

(%)= percent of total

(59%)

(18%)

43%


2�

Despitethisgrowth,manycompanies33findexpansiondif-ficult,astheyarelackingcommercializationcapabilities(e.g.,reinbursementmanagement)andarefocusedonmarginalinnovationsinsmallorslowgrowingsegmentsofthedeviceindustry(e.g.,makingapatientbedthatisslightlybetter).Yetrevolutionaryinnovationsarepossibleineventheslo-wergrowingsegments(e.g.,the“WoundVacuum-AssistedClosure,V.A.C.,system,”34byKineticConcepts,Inc.impro-vedthelivesofmanypatientswithpreviouslylargewoundsthatwouldnotheal).ExamplesofmedicaldevicesegmentswheresmallandmidsizedSwedishcompaniesarepresentincludethefollowing

Patient aids(25%ofaggregatedsalesofSwedishsmallandmidsizedcompanies,39Swedishcompanies)containalargenumberofslowergrowthcompanies.Modestgrowthisexpected(3.6%CAGR2004-2010)particularlywithintheadvancedpersonalmobilitysector,wherePermobilisthelar-gestcompany.

In vitro diagnostics(17%ofaggregatedsalesofSwedishsmallandmidsizedcompanies,20Swedishcompanies)containsthe7thlargestSwedishmedicaldevicecompany,Phadia,drivingthesizeofthesegment,andanumberofverysmall

companies,mostofwhichhavebeenstartedoverthepastthreeyears.Thesecompaniesfocusontraditionalinvitrotesting,point-of-caretestingandadvancedmoleculardiag-nostics,allofwhicharestronggrowthsegments.

Diagnostic imaging(10%ofaggregatedsalesofSwedishsmallandmidsizedcompanies,30Swedishcompanies)iswheremostofthenewadvancedtechnologiesarelocated;however,thesecompaniesarestillverysmallandmostarefocusedontheX-raysegment,whichhasthelowestprojectedfuturegrowthwithintheimagingsegment.

Dental(10%ofaggregatedsalesofSwedishsmallandmid-sizedcompanies,29Swedishcompanies)hasthemostsigni-ficantgrowthopportunitiesintheimplantssegment,wherethereisastrongtraditionthroughNobelBiocare.However,successinthissegmentmightbechallengingasmostplayersareactiveinveryfragmented,slowergrowthsegments.

Cardiovascular(8%ofaggregatedsalesofSwedishsmallandmidsizedcompanies,16Swedishcompanies),especiallythetrans-cathetersegment,hasahighpotentialforgrowthbutthereisahighdegreeofcompetitionwithinthissegmentfromdevicecompaniesheadquarteredinothercountries.

* Companies in this revenue segment represent approxemately 30% of all small and midsized medical device and diagnostics companies in Sweden

** Based on �� of 102 companies in revenue segment (lack of data for 2� companies). �0 companies with data from 1��–200�; four companies with data

from 1��–200�, two companies with data from 2000–200�

*** See appendix for explanation

Source: Odin

Performance of Swedish medical device and diagnostic companies with 2006 revenues in the range of SEK 10–2,000 million*Revenue**

5,313

4,7854,4564,438

4,018

3,436

2,7352,376

1999 2000 2001 2002 2003 2004 2005 2006

Aggregated revenuesSEK million

Average EBIT***percent of revenues -29% -16% -13% -1% 4% 7% 7% 6%

14.6% averageCAGR

3333companieswerecalledandinterviewedregardinge.g.,thefocusoftheirproductdevelopmentandpercievedmajorchallenges

34WoundV.A.C.isalowtechnologydevicemadeofasponge,plasticsheetandvacuumdevicethatrevolutionizedthetreatmentoflargechronicwounds.KineticConceptsInc., www.kcil.com

ESTIMATE


3546%arefoundedbyengineersorinnovatorsnotaffiliatedtoacademiaand25%byphysicians.Approximatelyone-fifthofthesecompanieshavelaunchedtheirproductsinternationally, halfofthemwerelaunchedinSwedenandarereadytomovebeyondthenationalmarket,andonequarterwereintheprocessoflaunchandscaleupdomestically.Theremainingcompanies werestillintheprocessofclinicaltestingandproductdevelopment.

36Me-tooproducts;productswithverysimilarformandfunctiontoexistingproducts,competingwithminimaldifferentiation

37TolearnmoreaboutlargeSwedishcompanies(revenues>SEK2billion)forGambrovisit:www.gambro.com,Getingevisit:www.getinge.com,NobelBiocarevisit:www.nobelbiocare.com, Elektavisit:www.elekta.com,MölnlyckeHealthCarevisit:www.molnlycke.com,AstraTechvisit:www.astratech.com

Note: Only includes top eight segments (that together represent ��% of aggregated revenues and ��% of number of Swedish small and midsized companies).

Financials from latest available year (200�–200�)

Source: Health Research International; Odin

Aggregated revenues and number of Swedish small and midsized companies by segment, mapped versus global market size and growth

0

2

4

6

8

10

12

14

16

18

20

22

24

26

28

30

Patientaids

In vitrodiagnostics

Diagnosticimaging

Dental

Cardiovascularmanagement

Surgical tables,instrumentsfixed systems

Orthopedicsand spine

Surgicalinstruments

Aggregated revenues in segment, Swedish small and midsized companies

0 1 10 11 122 3 4 5 6 7 8 9

Expected growth, globalCAGR (2004–2010)

Percent

Segment size, globalUSD billions; 2004

(30)

(20)

(16)

(29)

(12)

(39)

(22)

(30)

( ) Number of Swedish smalland midsized companies

Onamoregranularlevel,managementinterviewswith33randomlyselectedcompanies35revealthatonly16%ofthecompaniesarecompetingwithuniqueproductsinalargeorgrowingmarket,whiletheothersareeitherfocusingonlowgrowthmarkets,orworkingwithgenericorme-tootypeproducts36.

Giventhesecircumstances,itisnotsurprisingthatfewsmallcompaniesmanagetogrowanddevelopintopromisinglargerinternationalcompanies.

Leverage of large companiesLarge37companiesarecrucialtothecontinuinggrowthanddevelopmentoftheindustry.Inmostsuccessfulinternationalcases,thesecompaniesactas“engines”forthelocalinnova-tionclusters(moreonthisinthenextchapter).InSweden,companieslikeGambroandElektahaveplayedthisroletosomeextentinthepast.ThequestioniswhetherSwedenisfullyleveragingtheseleadingcompanies.Therearesignsthat

wouldsuggestthisisnotthecase.ManyoftheinterviewswithseniormanagementofthesecompaniesrevealedthatSwedenisoftennotviewedasapriorityforresearchcol-laborationsandclinicaltesting.Thereareweaktiesbetweenthesecompanies,academicinstitutionsandhospitals–andsuchtiesarecriticaltoensuringawellfunctioninginnova-tioncluster.Anecdotally,Swedenmayalsobelosingsomeofitshistoricdistinctivenessasaplacetobasemedicaldeviceresearchanddevelopment–perhapsillustratedbySiemens’recentdecisiontoleavethecountry.

Itisalsocriticalforlargecompaniestoactasvehiclesforcommercializationofideasgeneratedbysmallercompaniesorbyindividuals.Itisverydifficulttogrowalargecompanyfromscratch,andgrowinganewbusinessareaaspartofanestablishedglobalcompanyisoftenamorefeasibleroute.Forexample,Medtronic’ssuccessinaddingnewareasofbusi-nesshashadahugeimpactonthelocalinnovationclusters.

2�

ESTIMATE


2�

38http://bostonscientific.mediaroom.com/index.php?s=43&item=691”BostonScientificacquiredtheCardiacSurgerybusinessinApril2006aspartoftheGuidanttransaction.TheCardiac Surgerybusinessisaleadingdeveloperofmedicaltechnologiesdesignedforuseinsurgicalcardiacprocedures,includingbeating-heartbypasssurgerysystemsandendoscopicvesselhar vestingforcoronarybypasssurgery.Thebusinessemploysapproximately450people.BostonScientificacquiredtheVascularSurgerybusinessin1995.TheVascularSurgerybusinessdevelops syntheticgraftsandpatchesusedtosurgicallytreatvasculardisease,includingtherepairofabdominalaorticaneurysmsandperipheralvascularanatomy.Thebusinesshasapproximately 250employees.Thecombinedrevenuesofthetwobusinessesin2006wereapproximately$275million.”

Thisprocessisalsoimportanttoensureacontinuousupgra-dingoftheportfolioofproductsandbusinessareas,suchthatthelargecompaniespreservethepotentialforfastgrowthandhighmargins.

AlookatSwedensuggestslimitedsuccessinthisarea.Somecompanieshaveriddensuccessfuls-curves(i.e.,beenabletogrowbytheextensionofbusinessintonon-coreareas)andthushavebeenabletoaddnew,vibrantbusinessareaswhileothershavenot.ArecentexampleofsuccessisGetinge,whichhasacardiacperfusionbusiness,andwhichrecentlyacquiredBostonScientific’scardiacandvascularsurgerydivi-sions38.ThetopsixSwedishmedicaldevicecompaniesarerepresentedinninedifferentmedicaldevicesegments

(bytechnologyarea).ExceptforGetinge’sparticipationinthelargeandhigh-growthcardiovascularsegmentandElekta’sparticipationinthehigh-growthenergybasedtechnologiessegment,noneofthesesegmentsarerepresen-tingeitherthehighestgrowthorlargestmarketsegments.LeadingSwedishcompaniesare,intheaggregate,notamongthehighestspendersonresearchanddevelopment.

ThereisariskofthatcontrolandownershipofcompaniesarebecominglessSwedishasacoupleofSweden’slargestcompaniesarecurrentlyprivateequityownedandonehasstronglinkstoSwitzerland.

Note: Based on top six companies: Gambro, Getinge, Nobel Biocare, Mölnlycke Health Care, Elekta and AstraTech. Assuming �0% of AstraTech’s revenues are

in urology & renal segment and 30% are in dental segment

* Gambro revenues from 200�

Source: Health Research International; Annual reports; Odin

Presence of top six Swedish companies

0

2

4

6

8

10

12

14

16

18

20

22

24

26

28

Diagnostic Imaging

Orthopedics & Spine

Surgical instrumentsDrug delivery Endoscopy

Home respiratory

NeuromodulationOpthalmic surgery

Patient aids

Segments where top six Swedishcompanies are present.Size of circle represent aggregatedrevenues 2006*

0 1 10

Energy-basedtechnologies

12 13 14 15 16 17 18 192 3

Urology andrenal

Surgical tables,lights &fixed systems

Dental

Infectioncontrol

Surgicaldressings,drapes

Woundcare

Critical careproducts

Cardiovascularmanagement

In Vitro diagnostics

Segment size, globalUSD billions; 2004

115 6 7 8 9

Expected growth, globalCAGR (2004–2010)

Percent

4

Segments where top six Swedish

companies are not present

ESTIMATE


SummaryWhileSwedishmedicaldeviceindustryhasaproudhis-toryofstrongperformance,thebarforsuccessisrisingandtherearesignsthattheindustryislosingitsdistinctiveness.Swedenhasnotbeenprolificrecentlyinturningideasintoproductsandcompanies,fewnext-generationcompanieshavethepotentialtogrowintogloballeaders,andthecountry’sexistingleadersarenotbeingfullyleveraged.

30

* Unable to obtain data for number six company, Astra Tech, as part of Astra Zeneca

** Interview based

*** 200� data

Source: Annual reports; Company interviews

R&D expenditure as share of sales for top five* Swedish companies and major global medical device companiesPercent, 200�

2.2

2.2

2.5

2.7

3.0

3.6

5.4

5.9

6.0

6.2

7.2

7.2

8.0

8.5

9.0

9.9

11.1

12.9

GE Healthcare**

Nobel Biocare

Zimmer

Mölnlycke Health Care

Getinge

Baxter

Stryker

Becton Dickinson

Elekta

J&J MD&D

Roche Diagnostics

Philips Medical

Medtronic

Siemens Medical

Boston Scientific

Gambro***

B. Braun

Tyco Healthcare

Swedish companies ESTIMATE


31

Building a successful medical device indus-try requires purposeful collaboration between several stakeholders

�In order to understand how a well functioning medical device cluster comes about and functions, a number of international case examples have been studied (in addition to the workshops and interviews described in Chapter 2) where a strong innovation environment and a flourishing medical device industry exist.

Eachcaseisuniqueandprovidesvaluableinsights

• SouthKoreahasdevelopedastrongpositionintheima- gingsegmentbasedontechnologyskillsdevelopedinthe country’sotherindustries• Denmarkhasalonghistoryinhearingaidsbasedon governmentinterventionand,morerecently,joint collaboration• SanFranciscohasbuiltavibrantbiotechnology/medical deviceclusterandleveragedthestrengthsoftheexisting semi-conductorindustry• Minneapolishasbuiltaworld-leadingmedicaldevice clusterleveragingthelocalpresenceofmajormedi- caldevicecompaniessuchasMedtronic,Guidant (BostonScientific)andStJude• Irelandhasattractedmedicaldevicemanufacturingand R&Dthroughamajorgovernmentledeffortincluding taxbreaksandstrongfocusonnetworkbuilding

Acrosstheseexamples,thereisnosinglerecipeforsuccess,butratheranumberofdifferentmodelsthatcanleadtosuc-cess.Commontoallofthemseemstobestrongfocus,highdegreeofcollaborationanddedicationfromthestakeholdersdrivingtheeffort.Inaddition,giventhecross-diciplinaryessenceofappliedmedicaltechnology,thestakeholdersneedtorepresentdifferentinstitutions(hospital,universities,andcompanies)aswellasdifferentdepartmentswithintheseinstitutions.Thebestpracticeexamplesthathavebeenre-viewed,andtheinterviewsconductedwithindustryexpertsandstakeholdersinSweden,suggestthattherearefourcri-ticalelementsor“enablers”contributingtoeachsuccessfulstory:strongandwellalignedincentives,worldclasscapabi-lities,activeandwellconnectednetworks,aswellasadequatefundingforresearchandearlycommercialization.


• Formal evaluation of publications/patents• IP ownership by professor and/or university• Culture of positive recognition for commercial activities

• Formal evaluation of clinical research and patents• Culture of positive recognition for commercial activities (incl. clinical trials)• IP ownership

• Tax breaks and cost efficient labor• Strong local research capabilities• Strong local market• Governmental support of 1st time R&D investments

• Strong academic talent within focused field• Cross-disciplinary capabilities with experience in finding technical solutions to unmet customer needs• Educational programs• Commercialization skills

• Clinical testing and commercialization skills• Process for identification and articulation of unmet clinical needs• Health economics skills

• Core commercialization skills - Sales and marketing - Regulatory - Reimbursement• Business development skills• Internal R&D skills• Innovation sourcing skills

• Targeted research funding for selected medical technology segments, both internal and external (i.e., public institutions and private foundations)

• Targeted funding for applied medical technology research and product development

• Sufficient funding for R&D• Contribution to funding of joint collaboration projects

• Encouragement of start ups through use of technology transfer office and incubators• Portal towards industry and hospitals

• Creation (and marketing) of primary point of contact for academics, companies and individual inventors (e.g., portal to increase collaboration)

• Active contribution to innovation clusters• Participation in job rotations and fellowships between universities and industry

Universities University hospitals Companies Facilitators

Ince

ntiv

es

Cap

abili

ties

Dire

ct f

und

ing

Co

llab

ora

tion

an

d n

etw

ork

Go

vern

men

t

Net

wo

rk o

rgan

izat

ion

Inve

sto

rs

Focus & Collaboration!

Source: Interviews with international and Swedish medical device industry representatives

Example of enablers needed

IncentivesTheinternationalcaseexamplesstudiedrevealthatinordertocreateastrongandvibrantmedicaldevicecluster,anum-berofstakeholders(individualresearchers,physicians,acade-micinstitutions,hospitals/providers,andcommercialcompa-nies)needbeincentivizedtocontributewiththeirknowledgeandexpertise.

UniversitiesAcademicsinmedicineandtechnologyshouldbemotivatednotonlytoperformhighquality,innovativeresearchthataimstosolvechallengesfacingthehealthcareenvironmentbutalsotocommercializeideassotheywillbesharedandotherscanbenefitfromthem.Thiscanbeachievedinseveralways.

Formal evaluation of publications and patents.Oneoptionistoensurethatinnovationandqualityarepartoftheformalevaluationofscientificresearchers.InSouthKorea(box1),researchintomedicaldeviceswasincentivizedbygivingmoreattentiontopublicationininternationallyrecognizedjournalsaspartoftheevaluationcriteriaofresearchers.ThisinitiativehasledtoadramaticincreaseinthenumberofmedicaltechnologyarticlesinMedline,asprofessorsstrivetoachievebetterevaluations(and,indirectly,moreresearchfunding).InSweden,wherethisincentiveisdeeplyrootedinthescienti-ficsociety,thesameincentivemayhavetheoppositeeffect,drivingresearcherstowardsbasicratherthanappliedresearch,sincebasicresearchismorelikelytobepublishedinhighstatusjournals.

32 Action MedTech – Key Measures for Growing the Medical Device Industry in Sweden

33

Expertinterviewsemphasizethatitwouldbebeneficialifpatentactivitywasalsopartoftheformalevaluationofresearchers,eventhoughthishasnotbeenthecaseintheinternationalcaseexamplesstudied.

Intellectual property ownership.Incentivizingcommerciali-zationcanbeachievedusingseveraldifferentmodels.InSweden,theteacher’sexemption39givesresearchersandscientistsatacademicinstitutionsapersonalincentivetocommercializefindings,sincetheyown100%oftheintel-lectualproperty.ThiscanbecontrastedwiththeUSwhereuniversitiesgenerallyhavethefullownershipoftheintel-lectualpropertydevelopedbyemployedresearchers,whilenetincomeisoftenshared.Forexample,StanfordUniversityowns100%ofanypatentfiledandanypotentialroyaltiesaresharedequallybetweentheinventor,theinventor’sdepart-

mentandtheuniversity.ThesameprincipleisappliedattheUniversityofCalifornia.AtNorthwesternUniversityinChicagoadifferentmodelforsharingroyalty/licensingfeeshasbeendeveloped:30%ofthenetincomegoestotheinventor,20%toauniversityaccounttosupporttheinventor’sfurtherresearch(shouldtheinventorleavetheuni-versity,thisamountremainswiththeuniversity),10%tothedepartmentordepartmentsinwhichtheinventorserves,5%totheschoolorcenterinwhichtheinventorservesand35%tothecentraladministration.

Culture of positive recognition for commercial activities.Inmanycountries,suchastheUS,thereareculturalincentivestocommercializeinnovation,assuccessfulcommercializationgiveshighstatusinthesurroundingresearchcommunityandcanleadtoasignificantaccumulationofwealth.

* Medline articles indexed by selected medical technology MeSH-terms (see appendix). Hits include medical technology development as well as applied

medical technology

Source: Interviews; Press clippings; Ministry of Science and Technology; Korea Health Industry Development Institute; Medline accessed August-September 200�;

Delphion

Box 1: South Korea

In South Korea, a major government effort known as the G-� Highly Advanced Nation program was introduced in the early 1��0’s aiming to bring the level of Korean science and techno-logy to the level of the G-� countries. Total investment of USD 1�0 million (1��–2001) was made. Medical technology was one of the selected investment areas, with a focus on imaging technologies. The result has been a virtual explosion of the medical device industry, particularly in diagnostic imaging, where publications, patents, number of companies and sales have all grown in excess of 1�% annually

Share of Medline articles in medical technology* with Korean affiliation, 1990–2005Percent

• Large increase in activity in medical technology publications and patents and a 10-fold increase in the production value of the local medical device industry• Significant foreign investment, several companies choosing Korea as their Asian R&D hubs• Development of market leading medical imaging solutions in MRI, ultrasound, and x-ray technology• According to Korea Health Industry Development Institute, the medical technology project had generated about USD ��0 million from sales of developed products and another USD 3�0 million as a substitution effect of imports during 1��–2002• Out of the top 2� companies in Korea, one third are imaging companies that represent approximately half of these 2� companies’ revenues

Share of Medline articles in medical technology* with Korean affiliation, 1990–2005Percent

Effect of government programs

0

100

200

300

1990 1995 2000 2005

23%

0

0.5

1.0

1.5

2.0

1990 1995 2000 2005

+18%

0

100

200

300

1990 1995 2000 2005

23%

0

0.5

1.0

1.5

2.0

1990 1995 2000 2005

+18%

ESTIMATE

ESTIMATE

39Teacher’sexemption,seeappendix


University hospitalsIncentivesforindividualcarepersonnelandhospitalstospendtimeandeffortonclinicalresearchisaprerequisiteforasuccessfulinnovationenvironment,throughindividual(basic)researchprojects,inorganizedclinicaltrials,andinjointproductdevelopmentprojectswithcompanies.

Formal evaluation of clinical research and patents.Interviewsrevealthatevaluatingclinicalstaffandhospitalsonthebasisoftheirpatentactivity,aswellasontheircontributiontoclinicalresearch,couldstimulateactivitiesinthesefields.

Culture of positive recognition for commercial activities (incl. clinical trials).IntheUS,thereisacultureandtraditionofparticipatinginclinicaltrialsandcollaboratingon/commerci-alizingprojectswiththeindustry.Theseactivitiesareviewedassomethingaphysician“should”doratherthansomethingaphysician“could”do.

IP ownership.Manyinternationaluniversity-affiliatedhospi-talsfollowtheuniversitymodelasdescribedintheprevioussection.

CompaniesThepresenceandstrongintegrationoflargemedicaldevicecompaniesisessentialforthesuccessoftheindustry.Attractingforeigncompaniestoacountryandsustainingthepresenceofnationalcompaniesmayrequirefinancialincenti-vesand/oruniquegeographiccapabilities.

Tax breaks and cost-eff icient labor.Significanttaxreductionscombinedwithcost-efficientlaborformanufacturingattrac-

tedmedicaldevicecompaniestoIreland.InSouthKorea,theMinistryofScienceandTechnologyworkscloselywiththeMinistryofHealthandWelfaretocoordinatetaxbenefitsforforeigncompaniesinselectedindustries(manufacturingandhealthcarebeingtwo)40.ThetrendofmovingR&Dandclinicaltrialstolow-costcountriesisnotyetoccurringasclearlyinthemedicaldeviceindustryasitisinthepharma-ceuticalindustry,eventhoughthereareafewexamples(e.g.,SiemensMedicalR&DinIndia).

Strong local research capabilities.SouthKoreaisalsoabletoenticecompaniesbyprovidinguniqueresearchcapabilities(especiallyinimaging)andhasconvincedseverallargeglobalcorporations41toselectthecountryastheirAsianR&Dhub.

Strong local market.Bothforeignandnationalcompaniescanbegalvanizedbyastronglocalmarket.TheSouthKoreansuccessinimagingtechnologyhasbeendriveninpartbydemandfromlocalhospitals.Thehospitalsinvestheavilyinfrontlinetechnologysincethereimbursementsystemissetuptomakethefirstyearsofusinganewtechnologyhighlyprofitableforthem.Namely,thenationalhealthinsurancesystemtakesuptotwoyearstospecifythereimbursementlevels42.SinceKoreanpatientsareattractedbynewtech-nologies,themedicalcenterspricenewtechnologiesfreelyandgetreimbursementfromthegovernmentaccordingly.AnotherexamplehighlightingtheimportanceofastronglocalmarketistheearlydevelopmentofthehearingaidindustryinDenmark(box2).Theindustrygotitsbigboostin1953whenthegovernmentcreatedanexceptionallystronghomemarketbypromisingafreehearingaidforeveryDanewhoneededone.

3�

40MinistryofScienceandTechnology,www.most.go.kr/en;MinistryofHealthandScience,www.eng.me.go.kr

41E.g.,Siemens,www.siemens.com

42InterviewswithKoreanexperts


Box 2: Denmark

3�

43IDAIreland,www.idaireland.ie;EnterpriseIreland,www.enterprise-ireland.com

Denmark has a strong scientific tradition in audiology. Today three Danish-headquartered global companies together account for ��% of the global hearing aid market. In an effort to strengthen the local academic abilities in applied hearing, the three com-panies have been involved in establishing the academic Centre for Applied Hearing Aid at the Technical University of Denmark and recruiting world-class researchers in the field. The centre is

focused on basic research, and the result has been a research hub attracting top academics from around the world that gives the founding companies unique access to a worldwide academic network. Funding of the centre is provided by the industry (~3�%), private and public research funds (~3�%) and by the centre itself (~30%).

The strength of today’s industry can be traced back to• A long heritage of audio technology in Denmark, producing diagnostic tools already a century ago• A continued strong academic tradition in acoustics• Support from related industries in Denmark such as: -Elite stereo equipment maker Bang & Olufsen -Leading manufacturer of sound and vibration solutions Brüel & Kjear -Leading hearing diagnostics developers GN Otometrics and Interacoustics - Government driven growth of local market: offer free hearing aids

Global hearing instrument market, 2005100% = USD 3.� billion Danish

companies 8%

8%

13%

14%

15%

21%

21%Widex

Other Siemens

William Demant(Oticon)

GN ReSound

Starkey Lab.

Phonak

1900 1910 19701920 1930 1940 1950 1960 1980 1990 2000

1904: Oticon (William Demant) founded by Hans Demant to import and later produce hearing aids

1943: First acoustic laboratory established at the Academy of Technical Services

1953: Danish government opens up a local market by promising free hearing aids for every Dane who needs one

2003: Center for applied Hearing founded by Oticon, GN ReSound and Widex in collaboration with DTU

1943: GN Danavox founded to produce loudspeakers, adding hearing aids in 1��

1956: Widex founded by former Oticon employees

1960’s: Technical University of Denmark (DTU) initiates research in psychoacoustics, investigating how humans perceive sound

Source: Medicindustrien; Press clippings; Interviews with industry representatives

Governmental support of R&D investments.Attractingforeigncompaniesisanimportantstepbutjustasimportantisensuringthatbothforeignandlocalcompanieswanttostay.Ireland(box3)hasbeensuccessfulinattractingforeigncom-paniesandpreventingthemfromfleeingtoothercountries:afterattracting15oftheworld’stop25medicaldevicecompanies’manufacturingbusinesses,IrelandisnowseekingtoincreaseitsshareofresearchactivitiesthroughfinancialsupportoffirsttimeR&DandfacilitationofcollaborationsbetweenindustryandthirdleveleducationalinstitutionsinIreland.FirsttimeR&Dissupportedbythegovernment

throughIDAIreland,whichprovidesfundingforfeasibilitystudies,trainingofpersonnel,andforthefirstpilotR&Dproject.WhenscalingupR&D,supportisgiventoupgradefacilitiesandfurthertrainpersonnel.EnterpriseIreland,thestatedevelopmentagencyforIrishindustry,providesfinan-cialsupportforcommerciallyfocused,industryledprojectsinproductandprocessdevelopmentthroughtheResearchTechnology&Innovation(RTI)program.Themaximumamountis650,000,ofwhichone-thirdisgivenasrepayablefunds43.

ESTIMATE


Box 3: Ireland

3�

In Ireland, the government initiated International Development Agency (IDA) has led a remarkable effort to attract foreign investment in a number of manufacturing areas, one being medical technology. Today, 1� of the top 2� medical device companies have manu-facturing units in Ireland, and the IDA is now broadening its agenda towards the establishment of R&D activities in Ireland. IDA has taken on an important role as the spider in the Irish medical device web, coordinating connections between all involved stakeholders

All of the involved stakeholders contribute to develop a strongly collaborative medical device envi-ronment

Source: IDA Ireland; IMDA;

Science Foundation Ireland;

Enterprise Ireland; Interviews

Thediversestakeholdersrequiredtoensurearobustmedicaldeviceindustryrequiredifferentincentivestocompelthemtofocusoncreationandcommercializationofproducts.Allstakeholderswillultimatelyneedtosetstandards/incentivesthataresupportiveofthisindustry’sgrowth,withthegoal

ofimprovedpatientcareandahealthy,sustainablelocaleconomy.Importantindecidingonwhichincentivestoofferisensuringtheyarecraftedtoachieveaspecificgoalinlinewiththeoverallfocusoftheproject/mission.

Universities • Joining forces to create a strong bioengineering masters program, including industrial and clinical internships • Clear ownership of intellectual property produced at universities; where researchers get ��% of the net income made in the first � years of techno logy transfer • Yearly biomedical conference with all Ph.D. students involved in the field; highly social event designed to create connections and inspire collaboration

Medical device companies

• Employ 2�,000 people in 130 companies with sales in excess of GBP � billion annually and annual growth approaching 1�%• Several large companies establishing R&D activities in Ireland (Medtronic, Olympus, Intel Digital Health)

Government network organization:IDA Ireland

• Actively sets up and funds university collaborations for new industrial R&D projects• Closely connected to funding agencies, located in same building. Quick connections and quick decisions attract large companies• Actively markets and promotes Ireland throughout the world. Also takes Irish stakeholders on tour to successful US companies• Acts as network hub with contacts to all other stakeholders through a helpful office and an extremely informative web page (case examples, database of support businesses etc.)

Government funding agencies: Science Foundation Ireland,Enterprise Ireland

• Research funding through Science Foundation Ireland, who recently added biomedical engineering as one of 3 focus areas. Funds projects that are likely to have commercial impact in 10–1� years• Enterprise Ireland provides start-up funding for projects that are likely to have commercial impact in ~� years. In addition to funding, they actively work to assist commercialization - Hosts partnering events and meetings at international trade fairs - Provides 2 week executive MBA training offered to those starting up companies - Produces pamphlets promoting commercialization - “How to get rich” - Offers very fast turn around on seed money applications – 2� hour decisions - Helps to source management

CapabilitiesHavingstakeholdersincentivizedismeaninglessunlesstheyhaveappropriatecapabilities,e.g.,academictalent,cross-func-tionaltalentwithexperienceinfindingtechnicalsolutionstomedicalproblems,clinicaltestingqualificationstosupport

productdevelopmentandtesting,andcommercializationskills,includingknowledgeofregulatoryrequirements,inter-nationalsalesanddistributionspecifictothemedicaldeviceenvironment.

Trade organization:IMDA

• Umbrella organization of medical device employers with rotating chairman- chip between large companies (Medtronic, Boston Scientific etc.), well connected with US medical device regions• Provides natural meeting points between companies through regular network- ing events• Facilitates collaboration between companies through working groups focused on regulatory, R&D, supply chain management, marketing and human resources issues


3�

UniversitiesStrong academic talent within a focused f ield.Academictalentcanbesecuredanddevelopedinseveraldifferentways:fromotherindustries,fromothercountriesandthroughculti-vationoftheskillsofoneindividualscientist/entrepreneur.Successfulmedicaldeviceclustersareoftenfocusedonareascloselyconnectedtoexistingresearchstrengthsinthecountryorregion.InSouthKorea,theimagingindustrywasselectedasafocusbasedonwidelyrecognizedcapabilitiesinelectro-nics,digitaldisplaysandsemiconductors–areasthatgeneratemuchofthenation’sexportrevenuesthroughcompanieslikeSamsungandLG.IntheSanFranciscoBay/SiliconValley(box4)cluster,thedeviceindustryhastakenadvantageofthehigh-techskillsavailableinSiliconValley,particularlyinsemiconductor/surfacephysicsandminiaturizationoftechno-logies.Forexample,IntuitiveSurgicalhaslicensedexclusive,worldwide,royalty-freerightstocertainIBMpatents,relatedtotheapplicationofcomputersandroboticstosurgeryinanimalsandhumans,whichtheyemploytodeveloproboticsurgicalsystems.Itisclearfromthisregion,andothers,thatlocalexpertise(atbothuniversitiesandcompanies)canbeleveragedtooptimizetalent44.

Inseveralofthecasesstudied,akeyenablerofamedicaldevicecluster’ssuccesshasbeenasingle,strongacademi-cian(eithernationalorinternationallyrecruited)whohastheabilitytosetthescientificdirectionofthecenter.InSouthKorea,SiemenshassupportedthedevelopmentofthenextgenerationofjointMRI-PETtechnologyattheNeuroscienceResearchInstituteofGachonMedicalSchool,aroundthecapabilitiesofonekeyresearcher45.InDenmark,theindustryactivelyworkedtorecruitaninternationallyrenownedyoungprofessortoleadtheCentreforAppliedHearing.Hence,whenmappingcapabilities,oneresearchermightbeenoughtodriveasub-segmentoftheindustry46.

Cross-disciplinary capabilities with experience in f inding techni-cal solutions to unmet customer needs.Asthemedicaldeviceproductshaveprogressedintomoretechnicallyadvancedsolutionsappliedtomedicalproblems,theimportanceofcross-disciplinaryskillshasbecomemorepronounced.Teamsofphysicians,nurses,engineersandnaturalscientists(biolo-gists,physicists,chemists)needtoworktogetherbothtofind

solutionstoissuesidentifiedinhospitalsandtofindvaluableapplicationstonewlydevelopedtechnologies.Cross-func-tionalcollaborationhasbeenoneofthekeyenablersofthesuccessoftheUniversityofCaliforniaatSanFrancisco(box5).Startinginthe1970’s,UCSFinstitutionalizedinterdisci-plinaryresearchonalargescale,bygroupingresearchersinto“neighborhoods”ofsimilarinterest,ratherthanbydepart-ment.AsUCSFisnowexpandingtheirfacilitieswiththeirnewMissionBaycampus,scientistsareclusteredaccordingtotheirresearchinterests47.

Educational programs.SecuringthefuturesupplyoftalentalsoplaysanimportantroleandinIrelandacademiaisjoiningforcestocreateastrongbioengineeringmastersprogram,wherestudentscancombineclassesfromtheparti-cipatinguniversities(UniversityCollegeDublin,UniversityCollegeCork,TrinityCollege,NationalUniversityGalway,andNationalUniversityLimerick)regardlessoflocation.Inaddition,theprogramwillincludea6-monthindustryinternshipwithamedicaldevicecompanycoordinatedbytheIrishMedicalDeviceAssociation(IMDA),aswellasaclini-calinternshipatamedicalclinic.Theprogramiscurrentlyunderproposal,butwillfollowthe2ndcycleoftheBolognaprocess48toattractstudentsfromotherEuropeancountries49.

Commercialization skills.Onewaytodevelopthecom-mercialskillsofentrepreneursisofcoursethroughformaltrainingincommercialization.UCSFprovidesan11-weekcourse,entitled“IdeatoIPO-andbeyond”,toitsscientistsandclinicianswhoarecontemplatingstartingabusiness,andteachesthemhowtobuildcommercialvaluefromtheirresearchdiscoveries.Thiscoursehascontributedtothemedi-caldeviceclusterlocatedintheSanFranciscoareagenera-tingover60start-ups,someofwhichhavegrownintolargeglobalplayers(includingChiron,atop-fourcompanyintheadvancedmoleculardiagnosticsarea)50.EnterpriseIrelandalsosupportsmanagementofnewmedicaldevicecompanies.Incaseswhereinventorswanttoleadthecompanythemselves,a2weekMBA-likecourseisprovidedtoimproveskills.Wheninventorsarelessinterestedinleadingthecompany,EnterpriseIrelandwillhelpinfindingasuitablepersontodoso.

44InterviewswithexpertsintheSanFranciscoBayarea

45NeuroscienceResearchInstituteofGachonMedicalSchool,www.nri.gachon.ac.kr/english/indew.asp

46CentreforAppliedHearing,www.dtu.dk/centre/cahr

47UniversityofCaliforniaatSanFrancisco,www.ucsf.edu

48TheBolognaprocessisaEuropeaneducationalreformaimingtocreateuniformacademicstandardsacrossEurope.Thestandardconsistsofthreecycles(awardingtheequivalentof Bachelor’s,Master’sanddoctoraldegrees),wherestudentsshouldbeabletotransferbetweenacademicsystemsaftereachcycle

49InterviewswithexpertsinIreland

50InterviewswithexpertsintheMinneapolisregion


3�

University hospitalsClinical testing and trials.Attractiveclinicaltestingenviron-mentsareespeciallyimportantasmedicaldevices(comparedtopharmaceuticals)requireclosecollaborationbetweenthephysiciansinvolvedinthetrialsandthescientistsandengi-neerswhodesignthem.Thishastheeffectofmakingthemedicaldeviceindustrylesspronetorelocationtolow-costcountriesandmoreattractedbytheabilitytoworkwithtop-tiermedicalfacilities.AtUCSF,adeliberatestrategytoencourageindustrycollaborationhasresultedinscientistsengagingwithexternalpartnersinnearly200clinicaltrialsand100researchcollaborationsannually,attractingcontractsworthUSD26millionin2004.ThisstrategyisfacilitatedthroughtheOfficeforSponsoredResearch,whichactsastheprimarypointofcontactforcompanies,assistsinmatchingclinicaltrialswithclinicians,andnegotiatesandexecutescontracts.UCSFhasmasteragreementsinplacewithover30companies,resultinginquickertrialset-up,andadedicatedcommitteehandlespotentialconflictsofinterestandconfi-dentialityissuestomakesurethescientistsareabletoserveseveralcompanieswithoutlegalproblems.

Commercialization skills.Asforuniversityemployees,itisimportantforclinicalstafftohavetheskillsorsupportneededtocommercializeproductsinventedin-house,eitherthroughpartnershipsoralone.Noneoftheinternationalcaseexamplesstudiedhaveestablishedspecificprograms/struc-

turestoachievethis,butinterviewspointoutthatsuccessinthisareawouldbeacompetitiveadvantage.

Process for identif ication and articulation of unmet clinical needs.Anaspirationthatmedicaldevicecompanyrepresentativesinterviewedwishedforisawayforhospitalstoeffectivelycaptureanddescribeunmetmedicalneedsandthenarticulatethisinformationtoacademicandcompanyresearchdepart-ments.Thisprocessoccurssomewhatorganicallyatmedicalsocietymeetings(andofcourse,iswhatspurssomeclinician-researchersintheirownwork)butcouldbeimproved.

Health economics.Interviewswithcompanyrepresentativesconductedduringthiseffortstressedtheimportanceofhealtheconomicalevaluations.IntheU.S.,justbecauseaproductisapprovedbytheFDAdoesnotmeanacaregiverwilluseitorapayor(privateorgovernmentalhealthinsur-ance)willpayforit.Providers(hospitals/physicians)andpayorsoftenreviewthelongtermhealtheconomicsofanewdevicebeforeallowingit“onformulary”(thatis,allowedinthehospitalforusebythestaffand/orautomaticallycoveredbytheinsurancepolicy).Hence,intheUS,medicaldevicecompaniespresentcost-benefitanalysisoftheirproductsversusthecost-effectivenessofcompetingorcurrentmedicaltreatments(andproducts)tohospitalandinsuranceapprovalboards.Ifthisdataholdsuptoanalysis,thedeviceislikelytobeapprovedandthereforeusedinthehospitalsetting.

Box 4: San Francisco Bay Area/Silicon Valley

In the San Francisco Bay Area, a medical device cluster has developed alongside the biotech industry. Today, the region is one of the strongest in the US, both in biotech and medical devices, with a growing number of medical device companies. Of the �� companies with reported revenues above USD � million, the

number of companies decreases by a third for each time revenues double, indicating a healthy funnel of growing companies. Local academic institutions, in particular the University of California at San Francisco (UCSF), have been heavily involved in the success (see box �)

* Based on companies from the San Francisco Bay Area/Silicon Valley with revenues above USD � million registered in OneSource

Source: OneSource

234

89

15

19

24

32–648–16 16–32 128–256 256–512 512–1048 >104864–128

Medical device companies, San Francisco Bay Area/Silicon Valley*Number of companies by revenue segment, USD million

Companyexamples

• Opthalmic Imaging Systems• Radiant Medical

• Entelos• Applied Imaging Corp.• Hemosense

• American Medical Systems• VNUS Medical Techn.

.

• Stryker Endoscopy• Volacano corp.

• Medtronic vascular• FoxHollow techn.

• Kyphon• Intuitive surgical

• J&J ALZA • Varian Medical Systems

Revenuesegment

ESTIMATE


3�

Box 5: University of California at San Francisco

At UCSF, targeted efforts to improve cross-disciplinary collabo-ration, industry collaboration, clinical research and commerciali-zation have created an environment for successful technology-

transfer and corporate collaboration. The entrepreneurial climate also attracts scientists with an interest in taking innovation to the next level, contributing to the positive trend

Source: University of California at San Francisco; Press clippings; Interviews

• More than 60 successful start-ups launched by UCSF scientists, today employing over 13,000 people• Leads the UC campuses on licensing fees despite being one of the smallest• UCSF staff take part in ~100 research collaborations annually• Nearly 200 clinical trials are conducted at UCSF medical center each year

Cross- disciplinary collaboration

• Collaborative research across department borders since the 1��0’s• Neighborhoods of chemists, mathematicians and biologists working together on a common interest• Non-hierarchical atmosphere where young faculty collaborate with significant professors across borders

Industry collaboration

• Single point of contact for industry relations through the Office of Industry Partnerships• Office of Sponsored Research dedicated to coordinating clinical trials• Collaboration facilitated by divisions for Industry Contracts, Conflict of Interest Committee and framework agreement with several companies

Commer- cialization skills

• First biomedical university to train students and faculty in commercialization• Office of Technology Management handling IP and technology transfer• BioFellow program, where entrepreneurial students get experience from a medical device company over a 1 year internship• Center for BioEntrepreneurship coordinating training and mentorship programs

Clinical research skills

• Experience from over 1,�00 trials over the past 10 years• Partnering with non-profit research organization SRI International to improve skills in clinical trial set-up

CompaniesCommercialization, business development, innovation sourcing skills.Strongcommercializationandsalesskillsfromthemedicaldeviceindustryarejustas,orevenmore,importanttotheindustry’ssuccessasthepossessionofattractivepro-ducts.TheMinneapolis-basedcompanyev3(box6)hastakenthistotheextreme,startingtheirvascularbusinessin2002withoutasingleproductintheirhands.Throughstronglyfocused,strategicacquisitionsofemergingtherapiesatthefringeofthevascularmarket,thecompanyhasgrown

bymorethan50%annuallyandnowsellsmorethan100differentproductsintheperipheralvascular,cardiovascular,andneurovascularsegments,inmorethan60countries.Thishasbeenmadepossiblebyrecruitingverystrongmanage-ment,marketing,sales,andregulatorypersonnel,ensuringR&Dhasaconstantcustomerfocus(vs.technologyfortechnology’ssake),anddefiningmarketstrategiesevenpriortoproductcreation.Inaddition,thecompanyhasbuiltadirectdistributionnetworkthroughoutEurope,Japan,andNorthAmerica51.

51Ev3,www.ev3.net;interviewswithindustryexperts


�0

Source: ev3 web site; Annual reports; In vivo; Press clippings; Interviews

Box 6: Story of ev3

Founded in 2000ev3 is a US based medical device company focusing on endo-vascular technologies for minimally invasive treatment of vascular disease and disorders. The company was started in 2000 by former SciMed Life Systems executives wanting to create a mid-sized alternative in this polarized industry, with few players in the segment between the large giants and small startups.

Strong focus from the beginningev3 executives wanted to build a successful and sustainable enterprise for everyone – employees, customers, and shareholders. By creating a multi-product company with a critical mass for growth but strong focus on the endovascular area, they aimed to be the “first mover” in the chosen areas.

Backed by two venture groups, both aligned with the aim to create a different kind of cardiovascular company, the company grew through strategic acquisitions of emerging technologies at the fringe of the vascular market where large global companies are not focused.

With strong management and marketing executives in place, the company’s first priority was a strong customer focus, avoiding developing technology for technology’s sake.

Building a strong base of clinical evidenceev3 focused on market development from the beginning, buil-ding clinical proof to convince physicians to use their products. Were able to attract very experienced sales representatives as well as skilled in-house product development capabilities. Strong relationships with clinical thought leaders with a will to change the practice of medicine have also been important.

Annual revenuesUSD millions

• Publicly listed on NASDAQ since 200�• Portfolio of >100 products in the peripheral vascular, cardiovascular, and neurovascular segments• Sales in more than �0 countries through a direct sales force in Europe, Japan, and North America and distributors in selected other markets• Focus on Europe first, where 1st and 2nd generation products are launched. 3rd generation products are also launched in the US

200

134

8668

33

2002 2003 2004 2005 2006

+57%

Justaswithacademictalent,commercializationandsalesskillsmaybefoundinonepersonwhocandriveasub-seg-ment.InMinneapolis(box7),partofthesuccessincreatingastrongfunnelofcompanydevelopmenthasbeenagroupofindividual,highlyskilledentrepreneurswhofoundedanumberofcompanies,grewthem,andeventuallysoldthemtolargerdeviceplayers.Oncethecompanyissold,theyfocusonanewcompanyandsocontributetothesuccessoftheregion52.

Internal R&D skills.Althoughsomecompanieslikeev3heavilyrelyonanabilitytorecognizeandpurchasethelatestresearchprojects(salesandmarketingbasedcompanies)thatcanbecommercialized,othercompaniesrelyoninternalR&Dskillsastheydevelopmostproductsthemselves,whichtheytheneithermarketthemselvesorlicenseforaroyalty.

52InterviewswithexpertsintheMinneapolisregion


�1

53MinistryofScienceandTechnology,www.most.go.kr/en

54EnterpriseIreland,www.enterprise-ireland.com

55InterviewwithventureExpert,MinnesotaVentureCapitalAssociation,www.mnvca.org

Box 7: Minneapolis

The Minneapolis area in the US state of Minnesota is today the most significant medical device hub in the world, grown out of companies like Medtronic, St. Jude Medical and Guidant (now part of Boston Scientific), all in the cardiovascular business. 3M Healthcare (wound care, infection control, dental appliances etc.) and Patterson Companies (dental, rehabilitation equipment etc.)

are other large companies in the area. The area also has a large number of medium sized companies, but unlike San Francisco, the Minneapolis area has a smaller share of fast-growing, small companies. This may be an effect of the larger companies acqui-ring promising smaller businesses

* Based on companies from the Twin Cities (Minneapolis/St. Paul) area with revenues above USD � million registered in OneSource

Source: OneSource; Interviews

221

8

18

33

26

14

>83844192–8384

2096–4192

8–16 16–32 32–64 64–128 128–256

256–512

512–1048

1048–2096

Medical device companies, Minneapolis*Number of companies by revenue, USD millions, segment

Companyexamples

• Urologix Myocor Wheelchairs Plus• Rochester Medical

• Accelent• Compex Techn.• Vascular Solutions

• Starkey Lab.• ev3• Empi• Smiths Medical

• St. Jude Medical• Patterson Companies

• 3M• Medtronic

.

Revenuesegment

Directfunding.........................................................................................................................................................................................................................................................................................

ESTIMATE

Inallmedicaldeviceclustersstudied,fundinghasbeencen-tralinenablingthedevelopment.However,thesourceofthefundinghasvariedwidely.

GovernmentTheKoreanimagingeffortwasbackedbysignificantgovernmentinvestment,totaling25%oftheannualindustryrevenuesover5years.Someofthishasbeenintheformofmatchingfunds,whichhasincreasedthetotalamountgoingintotheindustrybyattractinginvestmentbyforeigncompa-nies.Specifically,theMinistryofScienceandTechnologyhasbeencentralinfacilitatingforeigncompanies’investmentinlocalresearchinstitutes,aswellasindistributingfinancing53.

InIreland,thegovernmenthasinvestedbyreducingthecapitalexpenditureconnectedtosettingupnewoperations.Providinginfrastructureandloweringtaxesonintellec-tualpropertyareexamplesofsuchinitiatives.Inaddition,EnterpriseIrelandoffersfinancialsupporttocompanies

engagedincollaborativeresearchprojectswithIrishuniver-sitiesandInstitutesofTechnology,throughtheInnovationPartnershipInitiative,wheregrantsof50%to70%oftheresearchprojectcostsaregiven.Applicationandprojectadministrationishandledbytheacademicinstitutions,andthecollaboratingpartnersjointlydefinetheresearchproject,withtheobjectiveofbringingtheresearchclosetomarketreadiness54.

InvestorsInSanFrancisco(andMinneapolis)venturecapitalhasplayedamajorroleinsupportingtheindustry.IntheareaaroundSanFranciscoandSiliconValleyalone,over100dif-ferententerprisesinvestaroundUSD1.5billioninmedicaldevicecompanieseachyear.InMinnesota,investmentislower,butthereareover60membersofMinnesotaVentureCapitalAssociation,manyofwhomareactiveinvestorsinmedicaldevices55.


�2

* Twin Cities ** January–October 200� *** San Francisco Bay Area/Silicon Valley Source: Venture Expert

Venture capital invested in medical device industry, US examplesUSD millions

Successfulclustersalsoproactivelyrespondtothefundingenvironment.Asventurecapitalistsshiftedtoinvestinlaterstageproducts,UCSFpartneredwithuniversitiessuchasStanfordandUCSanDiego,andnonprofitclinicalresearchinstituteSRIInternational,toformPharmaStart,aconsor-tiumaimedatmovingthediscoveriesmadeattheschoolsintoclinicaltrials.Theuniversitiesstillneedtoprovidefun-dingforthetrials,buttheyaresupportedbytheconsortiumindesigningandconductingpreliminarytrialsthatmayberequiredtoattractfurtherinvestment.

UniversitiesFundingmayalsocomedirectlyfromuniversities.Anexampleofwhereauniversityhascontributedtothefun-dingofaspecificmedicaltechnologysegmentisDTU56inDenmark.DTUprovided30%oftheapproximatelyDKR30millionneededtofundtheCentreforAppliedHearingAidthefirst5years.

University hospitalsInterviewsrevealthatinorderforhospitalstofocusonmedi-caltechnologyinnovation,ratherthanbasicmedicalresearch,targetedfundingisneeded,eitherthroughexistingbudgetsorthroughindustrycollaborations.

CompaniesSufficient funding for R&D.Manyofthecompaniesthatareenginesinexistingmedicaldeviceclustersarespendingmorethanindustryaverage(approximately6-8%)onR&D.Forexample,MedtronicandBostonScientific,whicharebothpresentintheMinneapoliscluster,spend9.9%and12.9%ofrevenuesrespectivelyonR&DandSiemensMedical,whichhasestablisheditselfintheKoreanimagingcluster,isspen-ding11.1%ofrevenuesonR&D57.

Contribution to funding of joint collaboration projects.TheCentreforAppliedHearinginDenmarkmentionedabovestartedwithfullfundingforthefirst5years,asacombina-tionofindustry,governmentanduniversityfunds.Thelocalhearingaidindustryprovidedthecentrewithapproximately35%ofthefundingneeded.Thefundinghasenabledthecentretofocusonsettingastrongacademicagenda,andtoestablishitselfasamajorforceintheirfieldofscience58.

Nomatterwhatthesourceoffunding,allstakeholdersintheexamplesensuredthatitwastargetedforaselectareaofmedicaltechnology.Universitiesandhospitalsappliedforbothinternalandexternalfunding.Andcompaniesnotonlyprovidedsufficientfundingforin-houseR&Dbutalsocon-tributedtojointcollaborationprojects.

191781313112016151613

1,6111,619

1,564

1,8561,838

1,6361,489

1,826

1,2731,152

868

97 98 99 00 01 02 03 04 05 06 07**

469 435

180344296262279275228219

70

97 98 99 00 01 02 03 04 05 06 07**

Number oftargets

Number ofacquirers

7191727572606175747563

4835252539283124312612 113129112125111106106102957277

Minneapolis* San Francisco Bay***

Year

56TechnicalUniversityofDenmark

57Pleaseseepictureinchapter4

58CentreforAppliedHearing,www.dtu.dk/centre/cahr


�3

59UniversityofCaliforniaatSanFrancisco,www.ucsf.edu

60InterviewwithrepresentativefromDanishhearingaidcompany

Collaborationandnetworks..............................................................................................................................................................................................................Toenabledifferentstakeholderstofindeachotherandcol-laboratewithlowfriction,bothformalandinformalnetworksareimportanttosuccessfulmedicaldevicedevelopment.Companiesneedtobeconnectedbothtoacademicinsti-tutionsandtomedicalclinics.Academicresearchersneedaccesstothehealthcaresystem(bothcliniciansandpatients).Start-upsteamsneedtobeabletotapthosewithindustryexpertise,andlargercompaniesmusthaveinplaceanetworkofsupportbusinesses.Collaborationamongallstakeholdersisrequiredandcanbeledbyanappointednetworkorganiza-tionand/orbyindividualstakeholders.

BothIrelandandSouthKoreahaveusedcentralfacilita-tiontoenableacloseconnectionbetweentheindustryandacademic/medicalinstitutions.InIreland,thegovernmenthastakenaroleinassistingconnections,dialogueandcol-laborationbetweenallstakeholdersthroughtheInternationalDevelopmentAgency(IDA)andEnterpriseIreland.SouthKoreasimilarlyusesgovernmentinstitutionstoencouragedialogue.EnterpriseIrelandhostspartneringeventsandmeetingsatinternationaltradefairsandIDAactsasanet-workhubwithcontactstoallstakeholdersthroughadedi-catedofficeandaninformativewebpage.Inaddition,IDAactivelysetsupuniversitycollaborationsfornewindustryR&Dprojects.

UniversitiesTechnology transfer off ices and incubators.Start-upcompa-nieshavespecificnetworkingneedsinthattheymustfindfinanciers,andconnectwithindustryexpertsbothtolearnfrom(e.g.,togainunderstandingonregulations,reimbur-sementsystemsanddistributionchallengesspecifictothemedicaldeviceindustry)andtohire.Thiscanbefacilitatedbytechnologytransferofficesorincubators.AtUCSF,theCenterforBioEntrepreneurship(CBE)isthehubfortech-nologytransfer,coordinatingcommercializationcourses,mentoringUCSFentrepreneurs,andfacilitatinginformaldiscussionswithentrepreneursandothertradeprofessionals.

Approximately700peopleparticipateinCBEprogramseachyear59.

Portal with capabilities as interface to the industry and hospi-tals.Interviewswithcompanyrepresentativesemphasizethenecessityforuniversitiestomapandmarkettheircapabilities(e.g.,throughauser-friendlywebpage)extensivelytoenablefruitfulcollaborationprojectswithotherstakeholders.

University hospitalsPrimary point of contact.Manyvoicesraisedinthisefforthaveemphasizedtheneedforaccesstohospitalstoenablecollaborationprojectsandclinicaltrialsthroughthecreationofadedicatedone-point-of-contactentry.AtUCSF,thishasbeenachievedbythecreationofan“officeofsponsoredresearch”andan“officeofindustrypartnerships”.Thelatterisresponsibleforcoordinatingandfacilitatingresearchcol-laborations,technicallicensingdeals,clinicaltrialsandentre-preneurialeducation.

CompaniesActive contribution to innovation clusters.Communicationdoesnotnecessarilyneedtobedrivenbythegovernment.ThroughtheCentreforAppliedHearing,theDanishhear-ingindustryhasgainedaccesstoaworld-widenetworkofexcellentacademicresearch,attractedtoDenmarkviatheCentre.ConferencesandindustrymeetingsheldatthecenterprovideasmuchvaluetotheindustryasdoestheresearchperformedattheCentre60.

Participation in job rotation and fellowship programs. InterviewswithSwedishstakeholdershaverevealedthatleveraginganddevelopingcross-diciplinaryskills(whichisakeycapabilityinthisindustry),islinkedtotheparticipationofrepresentati-vesfrombothsmallandlargemedicaldevicecompaniesanduniversitiesinjobrotationalandfellowshipprogramsandwouldbebeneficialforallstakeholdersintheindustry.

Summary......................................................................................................................................................................................................................................................................................................................

Internationalcasesshowthatbuildingasuccessfulmedicaldeviceindustryrequiresfocus,andahighdegreeofcollabo-rationanddedicationfromstakeholders,tocreateconditionsthathelpfourenablerstoco-exist:incentives,capabilities,

directfundingandcollaborationandnetworks.Differentcombinationsoftheseenablershavebeenkeyingredientsintherecipeforsuccessformanyinternationalclusters.


��

Measured against international best practice, the Swedish environment for medical devices has important shortcomings

�The Swedish environment for medical technology innova-tion today does not give confidence that Sweden can continue to be a leading and dynamic player in the global medical technology arena. There is a lack of focus, and there are important opportunities for improvements across all the enablers identified (incentives, capabilities, funding, and collaboration and networks).


��

• Formal evaluation of publications/ patents

• IP ownership by professor and/or university

• Culture of positive recognition for commercial activities

• Formal evaluation of clinical research and patents

• Culture of positive recognition for commercial activities (incl. clinical trials)• IP ownership

• Tax breaks and cost efficient labor*• Strong local research capabilities• Strong local market*• Governmental support of 1st time R&D investments*

• Strong academic talent within focused field

• Cross-disciplinary capabilities with experience in finding technical solutions to unmet customer needs

• Educational programs

• Commercialization skills

• Clinical testing and commercialization skills

• Process for identification and articulation of unmet clinical needs

• Health economics skills

• Core commercialization skills - Sales and marketing - Regulatory - Reimbursement

• Business development skills• Internal R&D skills*• Innovation sourcing skills*

• Targeted research funding for selected medical technology segments, both internal and external (i.e., public institutions and private foundations)

• Targeted funding for applied medical technology research and product development

• Sufficient funding for R&D• Contribution to funding of joint collaboration projects

• Encouragement of start ups through use of technology transfer office and incubators

• Portal towards industry and hospitals

• Creation (and marketing) of primary point of contact for academics, companies and individual inventors (e.g., portal to increase collaboration)

• Active contribution to innovation clusters• Participation in job rotations and fellowships between universities and industry

Universities University hospitals Companies Facilitators

Ince

ntiv

es

Cap

abili

ties

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ct f

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ing

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llab

ora

tion

an

d n

etw

ork

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vern

men

t

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wo

rk o

rgan

izat

ion

Focus & Collaboration!

* Not evaluated during this effort

Source: Interviews with international and Swedish medical device industry representatives

Improvement opportunities in Sweden

Inve

sto

rs

Significant improvement opportunityImprovement opportunity

Incentives....................................................................................................................................................................................................................................................................................................................

Universities and university hospitalsTheinternationalexamplesandinterviewsshowedtheneedforavarietyofincentivesforuniversitiesandhospitalstaff–topromoteappliedmedicaltechnologyresearch,tocom-mercializeproducts,andtoparticipateinclinicaltrialsandcollaborationprojects.Someoftheseincentives(e.g.,intellec-tualpropertyownership)arepartlyinplaceinSweden,whileothersarelacking(e.g.,positiverecognitionofparticipationinmedicaldeviceresearch,clinicaltrialsandcommercializa-tionactivities).

Formal evaluation of publications/patents and clinical research.InmostofSweden’suniversitiesandhospitalssomeformofrecognitionofstaffwhoarepublishedinscholarlypubli-cationsiscarriedout(e.g.,whenevaluatingcandidatesforjobpositionsandapplicationsforALF-funding,publicationinscholarlyjournalsislookeduponfavorably).However,thedirectorofadivisionorclinicwithinahospitalhasfewincentivestofocusoninnovation.Insteadthefocusisonmeetingthebudgetsetfortheyear.ThedirectorofaclinicatKarolinskaUniversityhospital,forexample,isnotformallyevaluatedonthelevelofinnovationorcommercia-


��

lizationinhisorherclinicbutlargelyonthedepartment’sfinancialstatus,clinicalproductivity(oftenexpressedasnumberofpatients,numberofsurgeriesetc.)andlengthofqueues.Inaddition,someintervieweeshavepointedoutthatdepartmentdirectorstodayarelesslikelytobecombinedMD/PhD’sthaninthepast,andsomefeelthis“deacade-micazation”maymakeclinicalresearchandinnovationlessprioritized.Patentactivityisrarelyevaluated,eitherformallyorinformally.

Intellectual Property ownershipisdifferentbetweenhospitalsanduniversities.Althoughthisissomethingofagrayzonetoday,forhospitalstafftheintellectualpropertyrightisfor-mallyownedbythehospital.Somehospitalshavestartedtoaddressthisandareworkingtoprovideindividualincentives(e.g.,thesecondlargestcountycouncilinSweden,VästraGötaland,hasstartedtodevelopapolicyforhowtheintel-lectualpropertyrightsmightbedividedbetweenhospitalsandemployees).Intheuniversities,ontheotherhand,Swedenhaschosentohaveateacher’sexemption,whichgivesresearchersandscientistsatacademicinstitutions100%ownershipoftheintellectualpropertyofanyfindings.ThisisincontrasttotheUSmodelwhereuniversitiesowntheentirepropertyrightorlargepartsofit.Convincingargumentscanbegivenforbothmodelsasshowninrecentinvestigations61.Thereisaneedforcontinueddiscussiononpossiblewaystoimprovethisimportantincentive.

Culture of positive recognition for commercial activities.TheprevailingcultureinSwedishuniversitiesandhospitalsisnotgearedtowardcommercializingresearch.Norisitgearedtowardworkingcloselytogetherwiththeindustry.Thishasresultedinasystemwherecommercializationandcollabo-rationisnotperceivedasvaluable.Inaddition,companies’effortstoengagehospitalstaffareoftenviewedwithsuspi-

cion.Somehospitals(e.g.,SahlgrenskaUniversityHospital)haveavisionofbecominganengineforthedevelopmentofregionalbusinesses,thoughinrealitythereislimitedfocusandactiononthisvision.

CompaniesSwedishcompaniesarepotentiallyalsoshortonincentivesbutthishasnotbeenthefocusofinvestigationforthisreport.Moreimportantlytheyaresufferingfromthelackofincen-tivesinuniversityhospitalsanduniversities.

Strong local research capabilities.Basedoninputfromwork-shopsitisclearthatonetoppriorityofSwedishmedicaldevicecompaniesistosourceinnovationfromU.S.universi-ties.Asaconsequenceorperhapsasaresult,theinteractionofthedevicecompanieswithSwedishuniversitiesislimited.Thisdoesnot,however,meanthesecapabilitiesdonotexistinSweden.WorkshopparticipantsclaimthatSwedenhasstrongresearchskills,butthereasonstolocateR&Dtoothercountriesincludea)thedifficultyofaccessingtheseskillsinSwedenandb)Sweden’ssmallmarket(ascompaniesgen-erallyclaimadvantagesofhavingR&Dinthemajormarkets).

Financial incentives for companies.Analysisofthepossibleeffectsofa)taxbreaks,b)increasedlaborcostefficiency,c)directfundingtoprivatecompanies,andd)directcreationoflocalmarketsinSwedenhasnotbeencarriedoutaspartoftheworktosupportthisreport.

Insummary,therearerelativelyfewincentivesforhospitalstaff,directorsofhospitalclinicsandacademicresearcherstofocusonmedicaldeviceinnovation.CompaniesmightalsobemoreinterestedinlocatingorstayinginSwedenifadditionaleconomicdriverswereinplace.

61AbolishmentoftheTeachersExemption–ConsequencesandPositionoftheSwedishBiotechnologyIndustry,SwedenBIO,2005;Nyttiggörandeavhögskoleuppfinningar(SOU 2005:95),Utbildningsdepartementet,2005;Effectsonacademia-industrycollaborationofextendinguniversitypropertyrights,FinnValentin&RasmusLundJensen,ResearchCentreon biotechbusiness,Copenhagenbusinessschool,2006

Capabilities..........................................................................................................................................................................................................................................................................................................

Workshops,interviewsandtheinternationalcaseexamplesnotedtheimportanceforuniversitiesandhospitalstohaveacademictalent,commercializationskills,andcrossdiscipli-narycapabilities,withexperienceinfocusedinnovation,clinicaltrialskillsandhighqualityeducationalprograms.Itisalsocriticalforcompanies(especiallysmallerones)tohavecommercializationskillsandmanagementtalent.Specificattentiontoleveragingskillsfromotherindustries

indevelopingmedicaldeviceinnovationwasalsoseenintheKoreaandSanFranciscocases.

Universities and university hospitalsStrong academic talent within focused f ield.Swedenhasastrongsetoftechnicalandmedicaluniversities,withhigh-qualityresearchqualificationsinanumberofbasicresearchfields.ButalthoughSwedenhasstrongacademictalentitis


��

arguablyonlyinaselectedfewareaswhereSwedenmatchesorsurpassestheleadingUSuniversitiesandhospitals–theUSishometomorethanhalfofthetop50globalmedicaldevicecompaniestoday.InterviewswithcompanyrepresentativesrevealthatSwedenwouldbenefitfromstrengtheningitsaca-demictalentinafocusedfewmedicaltechnologysegments.

Clinical testing and trials.KarolinskaUniversityhospitalhasrecentlycreatedtheKarolinskaTrialAlliance(KTA)asafirststeptosupportclinicaltrialsinafullyFDAandCE/EMEAcompliantfashion.KTAprovidesinfrastructuralsupportneededtoconducttrials(e.g.,planning,contractualandecono-micissues).Similarplatformshavebeensetupinotherhospi-tals.However,thisjourneyisonlyatitsbeginningandfurthereffortisneededtomatchinternationalbest-practiceexamples.

Cross-disciplinary capabilities with experience in f inding technical solutions to unmet customer needs.Expertisefoundatuniversities–whetherspecifictomedicaltechnologyorindirectlylinkedtoit(e.g.,industrialprocessesandproductdevelopment)–canbeharnessedtocontributetotheadvan-cementofmedicaldeviceproducts.Todevelopitstalentandcross-specialtyutilizationofskills,Swedenneedstofurtherdevelopitscross-disciplinaryplatformbeyondthestepsthathavealreadybeentaken,suchasjointprofessorships(e.g.,inStockholmwhereKTHandKIjointlyfundtwoprofessorsinmedicaltechnology,initiatedbyCentreforTechnologyinMedicineandHealth,(CTMH)).

Theapplicationoftechnicalresearchtendstobetechnology-driven62,ratherthandrivenbyneedsofpotentialcustomers.Thiscanbeproblematicintwoways:thetechnologymaynotservealargeenoughcustomerbasetobeworthcom-mercializingorthetechnologymaynotmeetcustomerneeds.Appliedresearcherswouldbenefitfromadaptingmoreoftheirworktowardneeds-driveninnovations–namely,star-tingfromauser/customerproblemandsubsequentlydeve-lopingasolutiontothatspecificproblem.

Finallythereis,withfewexceptions,agenerallackofcross-disciplinaryeducationalprogramscombiningmedicalandtechnologicalcompetence.Thislackcreatesbothascarcityoftechnologicalcompetenceinnewlyexaminedphysicians/nur-sesaswellasascarcityinmedicallycompetentengineerstoberecruitedbythemedicaltechnologyindustry.

Commercialization skills.Workshopsandinterviewswithventurecapitalistsandresearchershighlightedthatwithinuniversitiesandhospitalscommercializationskillsarelackingacrossthreecategories:1)commercializationencouragement,2)generalcommercializationtraining,and3)medicaldevice-specificcommercializationskills(e.g.,regulatory).Issuesinthefirstandsecondgroupareaddressedhereandthere,e.g.,KIandKarolinskaUniversityHospitalcurrentlyrunsomecoursessuchas“Fromclinictomedicalinnovation”.Anotherinterestingexample,gearedatintroducingcommercializationcompetenceintheearlystagesoftheresearchprocess,isthe

62InterviewswithVentureCapitalists

Source: SISP; Innovationsbron

Over 40 incubators and science parks in Sweden

Medical/technicaluniversities Incubators (numberin same city)

1

32

2

3

6

1

2

1

1

2

1

2

1

1

1

1

1 1

1 1

2

1

1

1

1

1

1

1

17 incubators within the national program of Innovationsbron

• Aurorum Luleå• Uminova Innovation, Umeå• Teknikbyn & Idélab, Västerås• Teknikdalen, Borlänge• Uppsala Innovation Centre• STING, Stockholm Innovation and Growth• Karolinska Innovation, Stockholm• Jönköping Science Park Incubator• LEAD, LiU Entrepreneurship and Development• Chalmers Innovation, Gothenburg• Gothia Science Park, Skövde• GU Holding & Sahlgrenska Science Park, Gothenburg• Inova, Karlstad• Jönköping Business Incubator• Blekinge Business Incubator• Ideon Innovation, Lund• MINC, Malmö Incubator


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Source: Company interviews

Most difficult challenges for small and midsized companiesChallenges mentioned as top 3 by interviewed companies, percent

10%

13%

15%

16%

23%

24%

Clinical trials expensive/difficult; hard to get access to hospitals and doctors

Difficult regulatory demands to get products approved; difficulty to patent products; bureaucracy to run a small company

Financing

Strong competitionHard to launch internationally; resource consumingand difficult to scale up marketing & sales

Lack of management (will or skill)

Viewed by many as increasingly difficult

“It’s hard to get access to Swedish hospitals, since you need proven results from products in use to get the doctors’ confidences”

“We have no idea on how to market and sell abroad; government advice or a bigger company as a sales partner would be valuable”

“We would need enormous amounts of money and other resources to scale up our international sales as much as we think is possible, based on current performance in a few countries”

INDICATIVE

“InnovationDrivenResearchEducation”atPIEp,ProductInnovationEngineeringprogram,anewnationalprogramforresearchandeducation.Manyoftheincubatorsalsoprovideskillsinthesecondgroup.Thereis,however,alackofcoursesandprogramsforgraduateaswellasPh.D.studentsdealingwith,andcreatingincentivesfor,commer-cialization.Interviewsandworkshopswithventurecapitalistsaswellasresearcher-entrepreneursinthefieldofmedicaltechnologyclearlystatetheimportanceandpotentialincrea-tingthepossibilityofcommercialthinkingintheearlystagesoftheappliedresearchprocess.Capabilitieswithinthethirdcategoryarealsoscarce,withtheexceptionofsomenewandinterestinginitiatives.

Educational programs.SomecompanyrepresentativesclaimthatakeyreasonforstayinginSwedenisthetalentedR&Dworkforce.Swedenisconsideredtohavegoodeducationalprograms,butcouldstrengthenitspositionbycreatingtail-oredprogramstospecificmedicaltechnologysegmentsandbylaunchingcross-disciplinaryprogramsincollaborationwiththeindustry.Thedevelopmentofsucheducationalprogramsisnotonlyofgreatimportancefordealingwith

thefutureprofessionalrolesinhealthcareandthemedicaltechnologyindustry,butwouldalsoprovidealong-termfinancingandcriticalmassofnetworksforthesegment.ExperiencefromKTHandChalmersalsoshowsthatthefieldofmedicaltechnologyisperceivedasoneofthemostmotivatingonesamongengineeringstudents.AlsoatthelevelofPh.D.studentseducationalprogramsgearedtowardscross-disciplinarycollaborationsbetweenmedicalandtechni-calfacultyisawayofcreatingcompetencefortheindustryaswellashighlyneededcross-institutionalnetworks.

Process for identif ication and articulation of unmet clinical needs.Asdiscussedinthepreviouschapter,companyrepresentativesandacademicsbelievethatSwedishhospitalscouldlargelyimprovetheidentificationandarticulationofunmetclinicalneedsasthiswouldallowcompaniesandacademicstofocusonkeycustomerproblems.

Health economics.InSweden,aswellasinotherEuropeancountries,medicaldevicecompanyrepresentativesinterviewedreportafeelingthathealtheconomicsarenotprioritizedasarationalefortryingorallowinganewmedicaldeviceinthe


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Directfunding.........................................................................................................................................................................................................................................................................................

Directfundingisacriticalcomponentinmanyoftheinter-nationalcases.Aswillbeshown,mostfundingisprovidedbyonesetofstakeholders–governmentandindustry,andisgiventoanotherset–theuniversitiesandhospitals.Hence,thissectionissubdividedbythepurpose(researchversuscommercialization)ofthefundingratherthanthestakehol-derprovidingorreceivingit.Thepurposeoffundinginthesuccessfulinternationalcaseswastargetedfundingtospecificmedicaltechnologysegmentsorefforts.This,forthemostpart,isnotthecaseinSweden.

Funding of researchSwedeninvestsmoreinR&Dthanmostothercountries(asashareofGDP);butadisproportionateshareofthiscomesfromprivatefunding(vs.governmentfunding).

Severalindicatorsshowthatfundinglevelsandfundinggrowthforpurebasicmedicalandtechnicalresearchisnotthemajorproblem.Itisincreasing(atbest)orstable(atworst).AnotherexampleisKarolinska’sR&Dfunding,whichgrowsbyapproximately2%peryear.

Source: OECD

R&D spend by country and sourceGross Domestic Expenditure on R&D as share of GDP, 200�, Percent

2.5

1.9

1.5

2.0

1.8

1.5

1.3

0.8

0.8

0.4

0.4

0.3

0.4

3.8Sweden

0.9 0.2 3.0Korea

1.0 2.9Switzerland

0.6 0.1 2.7US

0.6 0.2

0.9

Germany

0.7 2.5Denmark

0.6 0.1 1.9Netherlands

0.6 1.8UK

0.4 0.1 1.3Ireland

2.6

Government

Industry

Other (privatefoundations etc.)

hospitals.Intheiropinion,short-termgoals,suchasreachingthisyear’sbudget,takeongreaterimportanceasthereisnoformalprocess/policytoensurethatlong-termhealthbenefitsorlong-termcostsavingsforsocietyaretakenintoconsid-eration63.

CompaniesCore commercialization and business development skills.Asur-veyofsmallandmid-sizedcompanies64revealedthatsmallcompanieshaveahardtimefindingnotonlyemployeeswith

earlycommercializationskillsbutalsothosewithexperienceofmanagement,internationalsales&marketingandregula-tory/reimbursementskills.Whenthesecompanieswereaskedwhattheyfoundmostchallenging,23%citedthedifficultyoffindinggoodmanagementskills,andanother24%citedtheobstaclesassociatedwithasuccessfulinternationallaunch.Internal R&D and innovation sourcing skills.Thesefactorshavenotbeeninscopeofthisinvestigation.


63Interviewswithcompanyrepresentatives,e.g.,UlfRosén(CEOofProstaLund).ThecostforProstaLund´sPLFT®systemforthetreatementofBPH(benignprostatichyperplasia)is about68%ofthecostforTURP(thedominantsurgicalprocedure)afterthefirstthreeyears.(KobeltGetal.Thecostoffeedbackmicrowavethermotherapycomparedwithtransurethral resectionoftheprostatefortreatingbenignprostatichyperplasia,BJU,2004).Despitethesepositivehealthbenefits,ProstaLundhasexperiencedthatitisnotavalidargumentindiscus- sionswithclinics

64Representativesfrom33smallandmid-sizedcompanieswithrevenuesoflessthanSEK2billionwereinterviewed

�1

Note: Medical technology is defined as part of both medicine and technical sciences

* Research council funding from the Swedish Research Council (Vetenskapsrådet), Swedish Council for Working life and Social Research (FAS),

and the Swedish Research Council FORMAS, as reported by Swedish universities in 1�� prices. Vetenskapsrådet accounts for ~�� % of the total in 200�


Growth in research funding by research areaResearch council funding* used by Swedish universities, SEK millions

464 441 487377 481

631

368 325344

336370

515329

252245

233

273

377138

109119

112

140

248

150

141 105108

169

111

95

87

72

1,521

1995

67

1,335

1997

64

1,364

1999

59

1,204

2001

1,467

2003

2,051

2005

Other

Humanities andreligious sciences

Social sciences

Technical sciences

Medicine

Natural sciences

CAGR(1995–2005)

Percent

1.2%

1.4%

3.4%

3.1%

1.4%

4.4%

3.0%

* ~�0% of the ALF and SLL funds are distributed according to the percentages below

Source: Statistics Sweden, 200�; Karolinska

Karolinska’s R&D and educational funds development by source and usage SEK millions

338 327 353

339 361 371

468

964

2,109

2004

477

953

2,118

2005

485

974

2,183

2006

1.7%

2.2%

0.5%

CAGR

4,6%

1.8%

5%

17%

16%Activity-basedcompensation

13%FoUpremises

12%Basecompensation

Education

38%ALF projects

Core facilities

ALF funds

SLL funds

External funds

Governmentgrants/facultyfunds

Financing sources for R&D and education for Karolinska

Distribution of ALF and SLL funds*

Funds thatheads of clinicscan influence

CASE EXAMPLE


�2

* Swedish postgraduate degrees/positions, where a licenciate degree is awarded before a doctoral degree, and a docent equals an American associate professor

Source: Karolinska

Criteria for ALF and SLL funding distribution Criteria Weight in evaluation

• Number of Ph.D. degrees over past 3 years 21.75• Number of Licenciat* degrees over past 3 years 1.85• Number of new Docents* over past 3 years 7.4

• Research council funding 31.9• Other external funding 4.1

• Number of peer-reviewed articles 13.6• Number of other publications 1.4

• Number of specialist courses 3.4• Weeks of undergraduate courses 5.8• Number of postgraduate courses 3.8

• Number of staff who have been trained in Good 0.14 Clinical Practise (GCP) over the past 3 years• Number of trials where staff have acted as 1.55 principal investigators• Income from clinical trials 3.0• Other reports published 0.31

Degrees awarded

External researchfunding

Publications

Courses

Implementationfactor

100

However,medicaltechnology-specificresearchgrantsarerare.Interviewsandworkshopsrevealthatthereisalackoffundingforresearchprojectsconcerningappliedmedicaltechnologyresearchproblems–whethertechnologicallyorneeds-driven.Researchersinthiscross-disciplinaryareafindthemselvescompetingforgrantsdirectedtowardseithermedicalortechnicalresearch,thusoftenfallingin-between.Agreatdealofthefundingdescribedabovedoesnotpertain

toresearchonmedicaldevices,neitherbasicnorapplied.Forexample,thereisnofundingwithinKarolinska’sR&Dfundsthatisspecifictomedicaldevices65.Similarly,theevaluationcriteriaforreceivingfunds(fromtheapproximateSEK300million66ofALF-fundsandSLL-funds,whicharedividedamongtheclinicaldepartments)arenotspecificallyfocusedonappliedresearch.

Therearesignsthatthissituationisimproving.TheSwedishresearchcouncillaunchedaspecificfundforbasicresearchinmedicaltechnologyin2002andby2005SEK45-50mil-lion67hadbeenprovidedthroughthisinitiative.Howeveraclearmessagefromtheinterviewsandworkshopsisthatthereisstillagapinfundingregardingappliedandneeds-drivenmedicaltechnologyresearch.

Althoughmedicalfundingmaynotbroadlybeanissue,addi-tionallargegrantsspecificallytargetedatappliedandneeds-drivenresearchonmedicaldevicesisofgreatimportanceforencouragingadditionalinnovationinthisarea.Theresearch

fundingtoday(bothbasicandapplied)isalsofragmented:someofthecapitalcomesfromthegovernment-sponsoredresearchcouncils,somefromthehospitalsintheformofALFfunds,andasignificantamountcomesfromprivatesources(e.g.,theWallenbergFoundation).Asshownbelow,theDepartmentofBiomedicalEngineeringatLiU(aninstitutionfocusedonmedicaltechnologyinnovation)hasatotalof79grants,whichintotalamountstoSEK31millionorSEK390,000onaveragepergrant.Thisfragmentationmeansthatresearchersmayhavetospendadisproportionateamountoftimeapplying(andwaiting)formultiplegrantsratherthanbeingabletodeliverontheresearchitself.

65InterviewwithKarolinska’sR&Ddirector

66Representsapproximately50%ofKarolinska’stotalALFandSLLfunds

67SwedishResearchCouncil’sannualreport

CASE EXAMPLE


�3

* EU, other universities/counties, county councils, company funding etc.

Source: Department of Biomedical Engineering, Linköping University

Funding and average grant size at Department of Biomedical Engineering, LiUSEK millions

22.7

1997

18.7

1998

27.2

1999

36.6

28.4

2001

29.3

2002

33.9

2003

36.7

2004

33.1

2005

30.8

2006

Other funding*

Research councils etc.

Universitygrants

2000

Average grant size, Department of BiomedicalEngineering, LiU

0.39

0.570.56

0.44

0.55

0.36

0.52

0.42

0.16

0.27

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Total funding, Department of BiomedicalEngineering, LiU

CASE EXAMPLE

Funding of commercializationWithregardtofinancingthecommercializationofpro-ducts,therearegovernment-initiatedinstitutions(e.g.,InnovationsbronandAlmi)thatprovideearlystagefunding.Venturecapitalfirmshavealsobeeninterestedinthemedical

devicesector,resultinginmedicaltechnologyreceivingthesecond-highestlevelofventurecapitalinvestmentsin2006ofallindustries68.Yetworkshopsandinterviewsrevealedthatmanystakeholdersbelievethereisanotenoughcommerciali-zationfundinginearlystages.

Collaborationandnetworks..............................................................................................................................................................................................................

Internationalcaseexamplesshowtheimportanceofcollabo-rationandformal/informalnetworksandthattherearemanydifferentwaysinwhichtheycanbeorganized(e.g.,com-pany/universityledasinDenmarkorgovernment/networkorganizationledasinIreland).Inaddition,eachstakeholderneedstoproactivelycontributetothecollaborationbyactive-lyseekingcontactandmarketingtheirownskillsandneeds.

Universities and university hospitalsBothuniversitiesanduniversityhospitalhaveroomforimprovementincreationofaportal towards industry and oth-ersthat1)outlinestheprimarypointofcontactaswellas2)mapstheresearchareas,clinicalcapabilitiesand/orareasofunmetpatientneed.

Interaction with companies.Hospitalsandacademicinstitu-tionsacknowledgedduringtheworkshopsthattheycoulddomoretomarketthemselvesandtheirskillstocompanies.Today,fewoftheuniversitiesandhospitalshaveaprimarypointofentrythatisclearlymarketedonthefirstpageoftheirhomepage.

Interactions between universities and hospitals.Therearesignsthatthenetworkbetweendifferentuniversitiesisimproving,atleastonaregionallevel.ThejointKI/KTHandSLLinitiative,CentreforTechnologyinMedicineandHealth(CTMH),isoneexampleofthis.AnotherexampleisthatSahlgrenskaAcademyandUniversityHospital,ChalmersUniversityofTechnology,andtheUniversitycollegeofBoråshaveinitiatedworktowardsacommonmedicaltechnologyplatform.Theplatformhasbeenlocatedinanewconstel-

68Svenskariskkapitalföreningen

CASE EXAMPLE


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lationwithinthehospitalsoastofacilitategreaterinteractionbetweenindustry,academyandthehealthcaresector.Theproposedplatform,whichisanexpressedstrategicambitionofthepartners,strivestowardscrossdisciplinarycollabora-tiononresearch,educationandpositions.

Interactions with others.ThroughInnovationsbron,thegovernmenthasestablishedmanyincubatorstosupport/col-laboratewithresearchers/clinicianscommercializingtheirideas.Theissueisthattheseincubatorsdonothaveasuf-ficientsupplyoftheextensivespecificknowledgerequiredformedicaldevicedevelopment(e.g.,clinicaltrialsdesign,regulatoryapprovalpathways,andmedicalsalesandmarke-tingexpertise).

CompaniesThereisverylittlecollaboration(active contribution to inno-vation clusters)amongstakeholdersinSweden–particularlyforlargecompaniesinteractingwithuniversities/hospi-tals.Elekta,forexample,hasnothadasingleprojectwithaSwedishhospitaloracademicinstitutionintenyears.GambrorecentlyinitiatedaresearchcollaborationinitiativewithSahlgrenska69,whichisthefirstthecompanyhashadinSwedeninmanyyears.DuringinterviewsandworkshopsmanycompanyrepresentativesstatedthattheyhadnoideawhattypeofskillsexistedintheSwedishhospitalsandaca-demicinstitutions.Moreimportantlytheyhadnoideaonhowtocontacttheinstitutionsand“findtheirwaytotherightperson”.

Inaddition,therearefewexistingjob rotational/fellowship pro-gramsthatofferstakeholderstheopportunitytodeveloptheirskillsacrossdifferenttypesoforganizationsandleveragethem.

Network organizationsSwedenishometotwoindustryorganizations,SwedishMedtechandSwedenBIO.SwedishMedtechissolelyfocusedonmedicaltechnologyandhastraditionallyfocusedonsales&marketingaswellastenderingquestionsforthecommunityofSwedishandforeignmedicaldevicecom-panies.However,forthelastfewyearstheorganizationhasincreaseditsfocusoninnovationandR&Dquestions,throughthecreationoftheirR&Dgroup,whichconsistsofR&Dheadsofanumberofcompanies(e.g.,Elekta,Getinge,Gambro,andStJude).

SwedenBio,whichisaprivatenon-profitorganization,hasawiderlifesciencefocus.Oneofitssixindustryworkinggroupsis“Medtech,”whichiscomprisedofrepresentativesfromCapman,Elekta,Ortivus,CarmelPharma,ProstaLund,AerocrineandCellaVision.Thegroup’sgoalsareto1)strengthenmarketingcompetenceandexperienceininter-nationalmarketingandsales,2)improvecompetenceininternationalreimbursementprocesses,3)createplatformsforcollaborationbetweenhealthcare,researchandindustrytosupportinnovationandcommercialization.

Althoughmanystepshavebeentakentoincreasecollabora-tionamongthekeystakeholdersinSweden,itiscurrentlyfarfromwhereitneedstobeinordertocreatesubstantialandlong-termimpact.However,theworkshopsheldinconjunc-tionwiththewritingofthisreportindicatethatthereisgreatinterestinincreasedcollaboration.

69Formoreinformationpleasevisitwww.sahlgrenska.gu.se/aktuellt/nyheter/Nyheter+Detalj/?contentId=627181

Summary......................................................................................................................................................................................................................................................................................................................

AlthoughfundingisnottheprimaryissueformedicalresearchinSweden,thereisanimportantgapinthefundingoftheappliedresearchstagesoftheinnovativeprocessfornewmedicaltechnology.Otherimportant,morecomplex,issuesarea)incentivizingdoctorsandresearcherstofocusonappliedmedtechreserachwithaclearfocusonhealthcareneedsaswellasoncommercializationofresearch,

b)strengtheningcommercializationskills,abilitytoidentifyunmetneedsanddevelopingcross-disiplinaryplatformse.g.educationalprogramsformedicalandengineeringstudents,c)creatingplatformsandnetworkswhereallstakeholderscanleveragetheexpertiseofothers.Swedenhasfartogoonmanyoftheseareas.Thefinalchapterexploresthewaysallpartiesmightworktoremedythecurrentsituation.


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Each stakeholder needs to take action to ensure a strong future for the industry �

Strengthening Sweden’s medical device industry is going to require Swedish stakeholders to set goals that are ambi-tious but achievable.

Theyshouldworktowarddevelopingamedicaltechnologyindustrybearingthefollowingcharacteristics

• Athrivingacademicenvironmentthatconductsapplied researchandencouragesindustrycollaborationinaselec- tionofprioritizedmedicaldevicesegments,aswellas conductsbasicresearchinanumberofsegments• Anenvironmentforproductdevelopmentandclinical testingthatisrecognizedaroundtheworldforitsrigor andhighstandards• Aflourishingindustryofsmall/mid-sizedhighpotential companiesthathaveatrackrecordofcommercializing theirproducts,domesticallyandinternationally,orselling themtolargercompanies• Anumberofgloballyleadingmedicaldevicecompanies thatshareknowledgeandactasenginesforinnovation• Anattractiveclimateforforeigninvestment

Manyoftheissuesdiscussedinthepreviouschaptersarecomplex,anddespitehavingbeenraisedseveraltimesbefore70,relativelylittleactionhasbeentaken.However,muchofwhatneedstobedonedoesnotrequiregrandreforms.Stakeholdersshouldnotfocussolelyonthebigpolicyissuesthatonlythegovernmentcontrols,butratherlooktotakepragmaticactionincriticalareas,whicharefullywithintheircontrol.Thisdoesnotmeanthatthepolicyagendaisnotimportant,butitshouldnotbecomeanexcusefornotactingnow.Belowareaseriesofrecommendationsforeachstake-holder.Inaddition,itissuggestedthattheselectionofafewfocusclusterscanserveasarealcatalystforchange–acrossstakeholders.

70 MedicinförSverige!Nyttlivienframtidsbransch,SNSförlag,2007;FocusMedtechAgenda:HowtocreateasuccessfulmedtechindustryinSweden,2005;InternationalEvaluationofSwedishResearchinBiomedicalEngineering,Vetenskapsrådetsrapportserie,2006


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KeyrecommendationsbystakeholderWhilegreatercollaborationisoneoftheenablerstoaddress,thiscanonlyhappenifeachstakeholdertakesaction.

Technical and medical universitiesBasedontheconcernsraisedinchapter6,andwiththegoaloffocusingoninnovativeprojectsandsubsequentcommer-cializationinmedicaltechnology,universitiesshouldtakethefollowingsixactions

1. Emphasizemedicaltechnologyinnovationandmake itahighpriorityontheirstrategicagendas,develop concretestrategicplanswithpriorityresearchareas, appointmedicaldevicetaskforcestodeliveronthestra- tegicplanandsecurefundingforresearchandcollaboration

2. Mapandmarkettheirresearchcapabilitiestowardsthe industryandotheracademicinstitutionsanddevelopIP sharingmodelstosimplifycollaborationbetweenstake- holders3. Developmedicaltechnologyknowledgeplatforms,e.g., jointprofessorships,seminarsonhealthcareneeds, awardsformedicaltechnologyinnovationbasedoncross- disciplinarycollaboration4. Developandlaunchmedicaltechnologyeducational programsofrelevancetotheindustry5. Encourageandsupportresearchstafftofocusonmedi- caltechnologyresearchandproductdevelopment throughamedicaltechnology-targetedresearchfund6. Encourageandsupportcommercializationofresearchout- putthroughhigh-qualitybusinessprogramsandincubators

Source: Interviews and workshops with university and hospital staff as well as medical device industry representatives

Action plan

University hospitals and county councils1. Work together to ensure that medical technology innovation is a high priority on their strategic agendas, develop concrete strategic plans with priority research areas, appoint medical technology taskforces to deliver on the strategic plan and secure funding for research and collaboration2. Increase collaboration (product development, clinical research and testing, advisory boards) with, and outreach to, academia and industry and be transparent about clinical problems in need of medical technology solutions3. Encourage hospital staff to focus on medical technology research, commercialization and clinical testing by including collaboration experience as criteria for appointing positions within the hospital, making funding available, creating prestigious innovation awards and making universities business programs available for hospital staff4. Ensure that health economic priorities are set within county councils and communicated throughout the organization

Companies1. Identify areas for innovations that can be sourced – and need to be sourced – from outside the company 2. Proactively reach out to academia and university hospitals in Sweden to explore what they have to offer in relation to these areas3. Build business oriented connections with small and midsized companies to share knowledge in sales and marketing, regulatory and reimbursement issues4. Engage in a Swedish “focus cluster” (described below)

Technical and medical universities1.Emphasize medical technology innovation and make it a high priority on the strategic agendas, develop concrete strategic plans with priority research areas, appoint medical device taskforces to deliver on the strategic plan and secure funding for research and collaboration2. Map and market their research capabilities towards the industry and other academic institutions and develop IP sharing models to simplify collaboration between stakeholders3. Develop medical technology knowledge platforms, e.g., joint professorships, seminars on healthcare needs, awards for medical technology innovation based on cross-disciplinary collaboration4. Develop and launch medical technology educational programs of relevance to the industry5. Encourage and support research staff to focus on medical technology research and product development through a medical technology-targeted research fund6. Encourage and support commercialization of research output through high-quality business programs and incubators

Government1. Make available a significant medical technology-focused cluster fund and make investments subject to clear commercially viable investment criteria2. Allocate funds for applied medical technology research with a needs-driven focus for which individual researchers can apply3. Incentivize academic institutions to motivate and support researchers in commercialization by for example providing additional funding for commercialization and reviewing an option to include an additional regulated task for universities (i.e., commercialization of research output)

Catalyzing joint actions• Focus clusters• Customer focused innovation competitions• Partnering events


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Theseactionsrequiresubstantialchangestothewaymanyuniversitiesthinkaboutmedicaltechnologytoday.Ourrecommendationsforhowtodothisaredescribedbelow.

1. Emphasize medical technology innovation and make it a high priority on their strategic agendas, develop concrete strategic plans with priority research areas, appoint medical technology taskforces to deliver on the strategic plan and secure funding for research and collaboration

First,therepresentativesoftheleadershipteamofeachuni-versitymustagreethatmedicaltechnologyshouldbeafocusareaandincludeitonthestrategicagenda.Second,theleadershipshoulddevelopaconcretestrategicplanthatcontainsspecificmedicaltechnologypriorityareas(e.g.,elderlycare,patientaids,diagnosticimaging)asthistypeoffocushasbeenshowntobecriticalintheinterna-tionalcaseexamples.Thesepriorityareascouldbeselectedbasedona)existingin-housecapabilitiesandb)clearlydefi-nedhealthcareneeds.Thestrategicplanshouldalsocontainclearactivities,milestonesandexpectedoutputintermsofnumberofproductideas,thenumberofproductslaunched,thenumberofindustrycollaborations,andthenumberofresearchersdevotedtomedicaltechnology.

Third,theleadershipshouldsetupamedicaltechnologytaskforceconsistingofdedicatedpeople,ideallybothfrommedicalandtechnicaluniversities,andledbyarepresenta-tivefromtheleadershipteam.Thisrepresentativeshouldberesponsiblefordeliveringonthestrategicplanandcontinu-ouslyreportingprogressbacktotheleadership.

Finally,theleadershipshouldcreateafund,ideallytogetherwithselectedcompanies,specificallyfocusedtowardsmedicaltechnology.

2. Map and market their research capabilities towards the indus-try and other academic institutions and develop IP sharing models to simplify collaboration between stakeholders

Themedicaltechnologytaskforceappointedbytheleadershipshouldberesponsibleformappingtheuniversity’sin-housecapabilities,i.e.,searchforresearchgroupsthateitherarealreadyconductingmedicaltechnologyresearchorwhosecapabilitiescouldbeappliedinmedicaltechnology.Ideallythisshouldbedonetogetherwithheadsofresearchofcompaniesfromawiderangeofmedicaltechnologysegments.Thefocusoftheworkshouldbehighlightingareaswheretheuniversityisworld-classaswellaswheretheuniversitycouldimprove.Inadditiontoidentifyingareaswheretheuniversity’sresearchisworld-class,themedicaltaskforcecouldalso

identifyadditionalareaswheremedicaldeviceresearchisconductedbyannouncingtoresearchersthepossibilitytoapplytotheuniversityforfundingthatisspecifictomedicaltechnology(fromthefundintroducedinpoint1andoutlinedinpoint4).Aneasy-to-completeapplicationtemplateshouldbedeveloped(includingquestionsaboutthespecificmedicalproblembeingstudied,cliniciansinterviewed,hospitalsvisi-ted,possibleproductoutcomesandexpectedtimetomarket).

Themedicaltechnologytaskforceshouldalsoberesponsibleformarketingtheuniversity’scapabilitiestotheindustryprimarilybyleveragingexistingtoolssuchaseasilyacces-sibledatabases,aswellasthroughmoreproactivemarketingcampaignstothemedicaldeviceindustry.Inaddition,thetaskforcecoulddevelopproposalsforIPsharingmodelstosimplifycollaborationbetweenresearchersandcompanies.

3. Develop medical technology knowledge platforms, e.g., joint professorships, seminars on healthcare needs, awards for medical technology innovation based on cross-disciplinary collaboration

UniversitiesshouldlaunchjointprofessorshipsandPh.D.positionsacrossmedicalandtechnicaluniversitiesandacrossdisciplineswithinmedicalandtechnicaluniversities.Platformsshouldbeestablishedinthetechnicaluniversi-tiestofostergreaterinterestinmedicaltechnologyamongresearchgroupsconductingresearchinotherareaswithhighrelevanceforthemedicaldeviceindustry(e.g.,industrialprocesses).Moreover,theuniversitiesneedtodevelopacomprehensiveunderstandingoftheneedsofthehealthcareenvironment.Thiscanbedoneinmanyways,throughfellowshipsandPh.D.courses,butalsothroughstructuredseminarswithclinicians(bothphysiciansandnursesfromdifferentthera-peuticareas)arrangedbythemedicaltechnologytaskforce.Inaddition,amongthecriteriaforapplyingforthefundingspecifictomedicaltechnologyshouldbearequirementtohavemetwithclinicianstodiscussthemedicalneedsandtohavevisitedclinicstoseetheproblemsappearinginpractice.

Themedicaltechnologytaskforceshouldarrangeshortsemi-narswithinspirationalspeakerswhohavesolvedamedicalneedthroughaninnovationcomingfromacademia.Someoftheseseminarsshouldbedevotedtoawardentrepreneu-rial/commerciallysuccessfulresearchers.Amongthegoalsoftheseseminarsshouldbetoinspireresearcherstofocusonmedicaltechnologyproblemswhilealsochallengingthesometimescommercially-adversecultureintheuniversities.


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4. Develop and launch medical technology educational programs of relevance to the industry

Technicalandmedicaluniversitiesshouldjointlylaunchedu-cationalprograms(undergraduate,graduateandpost-gradu-ateprograms)withhighindustryrelevance.Representativesfromtheuniversities(e.g.,themedicaltechnologytaskforce)shouldproactivelyreachouttotheindustrytogettheminvolvedinthecreationoftheseprograms.

5. Encourage and support research staff to focus on medical techno-logy research and product development through a medical techno-logy-targeted research fund

Thefundspecificallyfocusedonmedicaltechnology(intro-ducedabove)shouldproposeaclearincentiveforresearcherstostart/continuetofocusonmedicaltechnologyproblems.Therearemanywayssuchafundcouldbesetup,butideallyitshouldbeajointeffortbetweentechnicalandmedicaluniversitiesandpotentiallyalsoaselectionofcompanies.Itwouldbeforthedifferentstakeholderscontributingtothefundtodecideitsfocus,butitwouldbeimportantforittosupportcross-disciplinaryappliedresearch.Inaddition,tofundpureappliedresearchactivitiesthisfundshouldalsocoverclose-to-marketactivities,suchasresearchers’participa-tioninmedicalconferencesandmeetingswithventurecapitalfirms/hospitalstaff.

6. Encourage and support commercialization of research output through high-quality business programs and incubators71

Universitiesshouldintroducehigh-qualitybusinessprograms(orleverageexistingones),consistingofintellectualproperty,marketing&salesandfinancing(inundergraduate,graduateandpost-graduateeducationalprograms)andofferthisalsotoresearchersapplyingforfundingspecifictomedicaltech-nologyandtoclinicalstaff.

Inaddition,themedicaltechnologytaskforceshouldworktogetherwithexistingincubatorstoinvolvethemproactivelyinsupportingresearchgroupswithearlybusinesscoachingandcontactswithindustry,andinlaterstageshelparrangemeetingswithventurecapitalfirms.

University hospitals and county councilsSwedenishometosixuniversityhospitals,spreadacrosssixcounties,eachwithadeepunderstandingoftherealchal-lengesfacingthehealthcaresector.Tobeabletoleveragethisknowledge,andcontributetothedevelopmentofthemedicaldeviceindustry,andtherebybenefitfromit,eachcounty

councilandtheaffiliateduniversityhospitalshouldtakethefollowingfouractions

1. Worktogethertoensurethatmedicaltechnologyinno- vationisahighpriorityontheirstrategicagendas, developconcretestrategicplanswithpriorityresearch areas,appointmedicaltechnologytaskforcestodeliver onthestrategicplanandsecurefundingforresearchand collaboration2. Increasecollaboration(productdevelopment,clinical researchandtesting,advisoryboards)with,andout- reachto,academiaandindustryandbetransparent aboutclinicalproblemsinneedofmedicaltechnology solutions3. Encouragehospitalstafftofocusonmedicaltechno- logyresearch,commercializationandclinicaltestingby includingcollaborationexperienceascriteriaforappoin- tingpositionswithinthehospital,makingfundingavaila- ble,creatingprestigiousinnovationawardsandmaking universitiesbusinessprogramsavailableforhospitalstaff4. Ensurethathealtheconomicprioritiesaresetwithin countycouncilsandcommunicatedthroughoutthe organization

Someoftheseactionsarenecessaryforcountycouncilsanduniversityhospitalstotakejointaction,whereassomeoftheareasarechangesthattheuniversityhospitalsshouldactonindependentofcountycouncils.Tobeimplemented,theproposedchangeswillrequireavigorouseffort,sincetheyareverydifferentfromhowmedicaltechnologyinnovation,commercializationandcollaborationisprioritizedandencouragedtoday.

Therearealternativewaystoachievetheseproposedchanges,anddifferentcountycouncilsanduniversityhospitalsmighthavedifferentprerequisitesthatmakeonesolutionmoresuit-ablethananother.Outlinedbelowarerecommendationsforonewaytoachievethechangesrequired.

1. Work together to ensure that medical technology innovation is a high priority on their strategic agendas, develop concrete strategic plans with priority research areas, appoint medical technology taskforces to deliver on the strategic plan and secure funding for research and collaboration

Similartouniversities,theleadershipofthecountycouncilandoftheuniversityhospitalneedtoagreethatmedicaltechnologyshouldbeafocusarea.Onceanagreementhasbeenreached,adecisionneedstobemadeconcerninghowambitiousthegoalsshouldbeforfocusingonmedicaltech-

71 ForrelatedrecommendationspleasereadTechnologyTransferandCommercializationPartnerships,InnovationAssociates,2007


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nology.Tomakethesubstantialchangesneeded,andtocre-atetheconditionsneededforthehealthcaresystemtobenefitfromastrengthenedmedicaltechnologyindustry,thegoalsshouldbeveryambitious,yetalsoachievable.

Subsequently,theleadershipofthecountycouncilandtheuniversityhospitalshould,basedontheagreedambitionlevel,tasktoamedicaltechnologytaskforce(e.g.,theR&DdirectorofthecountycouncilandtheR&Ddirectoroftheuniversityhospital)withjointlymappingin-housecapabili-tiesandneeds(e.g.,inthesamewayasuniversitiesarepro-posedtodoit)andtodevelopaconcretestrategicplan,withclearactivities,milestones,outputintermsofe.g.,numberofindustrycollaborations(includingclinicaltesting),numberofproductdevelopmentcollaborationswithacademia,numberofproductideas,numberofproductslaunched,numberofmedicaltechnologydevotedresearchers.Specificmedicaltechnologypriorityareasshouldbeselectedbasedona)map-pedin-housecapabilitiesandb)clearlydefinedhealthcareneeds.

Inaddition,theleadershipofthecountycouncilandtheuniversityhospitalshouldactasasteeringgrouptowhichthemedicaltechnologytaskforcereportsprogressonthestrategicplan.

Finally,afundspecificallyfocusedonmedicaltechnologyshouldbecreated,bydevotingpartoftheexistingALFfundtomedicaltechnologyinnovationandcommercialization.

2. Increase collaboration (product development, clinical research and testing, advisory boards) with, and outreach to, academia and industry and be transparent about clinical problems in need of medical technology solutions

Theuniversityhospitalshouldcreateaone-point-of-contactentryforcompaniesandacademics,withthegoaloffacili-tatingaccesstothehealthcaresystem.Thiscouldbeaccom-plishedbyleveragingandextendinganexistingorganization,orbycreatinganewone.Thisorganizationshouldbeeasilyfoundontheinternetandcommittedtohandlingrequestsfromindustryandacademia,andknowledgeableonwhichcapabilities/resourcestheuniversityhospitalpossessesandwhatneedsithas.Theorganizationshouldberesponsibleforguidingcompaniestotherightcliniciansandfacilitatedis-cussionsbetweenthetwoparties.Thiscouldbeachievedbythedevelopmentofapolicydocumentregulatinginteractionbetweenindustryandthehealthcaresystem,tosupportcolla-borationandremoveskepticismamongclinicians.ThispolicydocumentcouldalsooutlineguidelinesonIPrightsconcer-ninginnovationsarisingfromcollaborationprojects.

Inaddition,theorganizationshouldalsoberesponsibleforcommunicatingexternallythehospital’scapabilitiesandneedsthroughwebsitesandproactivemarketingmaterials.The“one-point-of-contact”organizationshouldberespon-siblefortailoringandorganizingmeetingswithadvisoryboards(consistingofclinicians)towhichinnovators(e.g.,smallcompaniesandacademics)canturnforadviceortotestproductideas.Therearedifferentmodelsonhowtomakethiswork.Forexample,thefirstmeetingcouldbeforfreeandsubsequentmeetingscouldbecharged(andtheadvisoryboardparticipantsgetashareofthepayment).

3. Encourage hospital staff to focus on medical technology research, commercialization and clinical testing by including collaboration experience as criteria for appointing positions within the hospi-tal, making funding available, creating prestigious innovation awards and making universities business programs available for hospital staff

Medicaltechnologyrelatedresearchandinnovationisbyitsnatureappliedresearch.Thistypeofappliedresearchistodayoftenconsideredlessattractiveamongresearchersthanbasicmedicalresearch.Inaddition,entrepreneurialactivitiesaresometimesviewedwithskepticismamongclinicians.Therefore,thereisaneedtoencourageclinicalstafftofocusonmedicaltechnologyinnovationandcommercialization,bothwhenitisconductedtogetherwithcompaniesandacademia(i.e.,jointproductdevelopmentandclinicaltestingprojects)andwhenitisconductedindependentofexternalcollaborations.Therearefourpotentialwaystoencouragetheseactivities.

First,establishmedicaltechnologyspecificindustryandacademiccollaborationselectioncriteriawhenappointingnewpositions.Second,letresearchers/cliniciansapplyforfundingfromthespecificfunddescribedinpoint1.Keycriteriaforbeingawardedthefundingshouldbethattheresearchisappliedresearchandthatitisclearlyaimedatsolvingaspecificmedicalneed.Third,awardspecialprizestocliniciansfocusedonmedicaltechnologyinnovation,com-mercializationandcollaborationtoacknowledgethemasrolemodels.Fourth,leveragethebusinessprogramsdevelopedbyuniversities(seeuniversitysection)andinviteandencourageclinicianstoparticipate.

4. Ensure that health economic priorities are set within county councils and communicated throughout the organization

Thepoliticalleadershipofthecountycouncilsshouldrequirethathealtheconomicsshouldbeapriority,forexampleinlargeinvestmentdecisions,andclearlycommunicatethistotheorganization.Thismeansthatthecapabilitiesinthisareainthecountycouncilsandinthehospitalsneedtobeenhanced.


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CompaniesTheexistingcompaniesinSwedenhaveanimportantroletoplayinhelpingtodevelopthecountry’smedicaldeviceindustry.Asmentionedinpreviouschapters,over90%oftherevenuesoftheSwedishmedicaldeviceindustryoriginatefromeightcompanies.Inaddition,therearemanyforeigncompanieswithoperationsinSweden.Thesecompanieshaveanimportantroletoplayasstrongenginesforfuturegrowthandexpansionandshouldconsiderthefollowingfourrecom-mendations

1. Identifyareasforinnovationsthatcanbesourced–and needtobesourced–fromoutsidethecompany2. Proactivelyreachouttoacademiaanduniversityhospitals inSwedentoexplorewhattheyhavetoofferinrelation totheseareas3. Buildbusinessorientedconnectionswithsmalland midsizedcompaniestoshareknowledgeinsalesandmar- keting,regulatoryandreimbursementissues4. EngageinaSwedish“focuscluster”

Somecompaniesalreadycarryouttheseactionsonaregularbasis,whileotherscouldbemoreactive.Nevertheless,tobecomeenginesofgrowthforthisindustryinSwedenthereisaneedforallcompaniestoincreaseactivityanddedicationtotheseproposedchanges.Belowisanoutlineofhowlargecompaniescouldhelptoachievethesechanges.

1. Identify areas for innovations that can be sourced – and need to be sourced – from outside the company

TheheadofR&Dcould,incollaborationwitheachresearchdivision,reviewcurrentdevelopmentportfoliostoidentifyunsolvedissueswherecapabilitiesarenotclearlyavailablein-houseandprioritizetheseissuesbya)potentialforexternaldevelopmentandb)levelofstrategicpriority.Afterthis,theteamshouldideallyidentifywhatcapabilitiesareneededtosolveeachproblem.

2. Proactively reach out to academia and university hospitals in Sweden to explore what they have to offer in relation to these areas

TheheadofR&Dcouldspeakatmedicaltechnologysemi-narsarrangedbyuniversities(describedunderuniversitiesabove),anddescribethetypeofworkperformedandthecapabilitiesandcollaborationsneeded.Inaddition,theheadofR&Dcouldproactivelyreachouttotechnicalandmedicaluniversitieswhereamedicaltechnologytaskforceisinplace,

andtouniversityhospitals,whereaone-point-of-contactorganizationisinplace.Thegoalwouldbetomeetinpersontodiscusswhatcapabilitiesthecompanyislookingtofind,andhowthismatcheswithuniversityandhospitalcapabili-ties.MoreovertheheadofR&Dcouldmakesurecompanyresearchersattendseminarsinfieldsofsciencewhereexternalcollaborationisneeded.

Wherematchesarefound,theheadofR&Dcouldsetuppersonalmeetingsbetweencompanyresearchersandacade-micresearchers/clinicalstafftooutlinepossiblestrategiccol-laborationprojects(e.g.,masterthesisprojectsorlonger-termresearchprojects).

3. Build business oriented connections with small and midsized companies to share knowledge in sales and marketing, regulatory and reimbursement issues

Representativesfromlargecompaniescouldincreaseinterac-tionswithsmallandmidsizedcompaniestosupporttheseinfieldsidentifiedasproblemareas,i.e.,regulatoryaffairs,inter-nationalreimbursementprocessesandsalesandmarketing.

Thiscouldbedoneinanumberofways(e.g.,bythecreationofmentorshiporfellowshipprogramsoronamoreinformalbasis).

4. Engage in a Swedish “focus cluster”

Workingwithacademiaandthehealthcaresystem,thereshouldbeafocusonidentifyingamedicaltechnologyseg-mentaroundwhichaSwedish“focuscluster”couldbesetupandthenengageinsettingitupanddrivingit(furtherdescribedundercatalyzingjointactions).


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GovernmentWhilemostactionstostrengthenthemedicaldeviceindu-stryinSwedenneedtobetakenbyindividualstakeholders,regardlessofthesupportofthegovernment,therearesomeinterventionsthatthegovernmentshouldconsiderpursuing,tosupportthelong-termsustainabilityofselectinitiatives

1. Makeavailableasignificantmedicaltechnology-focused clusterfundandmakeinvestmentssubjecttoclearcom- merciallyviableinvestmentcriteria2. Allocatefundsforappliedmedicaltechnologyresearch withaneeds-drivenfocusforwhichindividualresear- cherscanapply3. Incentivizeacademicinstitutionstomotivateandsupport researchersincommercializationbyforexampleprovi- dingadditionalfundingforcommercializationandrevie- winganoptiontoincludeanadditionalregulatedtaskfor universities(i.e.,commercializationofresearchoutput)

Thisreportwillnotoutlineindetailhowthegovernmentcouldproceedinconsideringtheseactions.However,somesuggestionsareproposedbelow

1. Make available a significant medical technology-focused cluster fund and make investments subject to clear commercially viable investment criteria

ConsiderprovidingsignificanttargetedresourcesspecificallyformedicaltechnologyclustersthroughcreationofaspecificfundmanagedbyaninstitutionsuchasInnovationsbronorVinnova.Thefundshouldbeopenforapplicationsfromjointprojectteams(i.e.,withrepresentativesfromcompanies,medicalandtechnicaluniversities)andinvestmentsshouldbesubjecttoclearfollowupandtocommerciallyviableinvest-mentcriteriathata)addressasignificantunmetcustomerneed,b)fitwiththecapabilitiesoftheacademicinstitutions,andc)haveacommitmentfromanexistingandmotivatedlargecompanywillingtodedicateresources.

2. Allocate funds for applied medical technology research with a needs-driven focus for which individual researchers can apply

Thereportarguesthatappliedmedicaltechnologyresearchshouldbehighlyneeds-drivenandbasedoncross-diciplinarycollaboration.Fundingforappliedresearchwithneeds-dri-venfocusprovidesincentivesforbothtechnicalandmedicalresearcherstoengageindeepandprolongedcollaborationwiththehealthcaresystemandvice-versa.InSwedenthereiscurrentlyalackofthistypeoffundingandadditionalfundsofthistypewouldcomplementexistingfunding.Inordertoinitiatesuchafundinanefficientmannertherecommendationistostartbyallocatingfinancingtoanalreadyon-goingprogram,suchastheResearch&Grow-program(Forska&Väx)atVINNOVA,andthencontinueinanewprogram.

3. Incentivize academic institutions to motivate and support researchers in commercialization by for example providing addi-tional funding for commercialization and reviewing an option to include an additional regulated task for universities ( i.e., com-mercialization of research output)

Therearemanyalternativewaysofdoingthis,including

• Providinguniversitieswithadditionaltargetedfunding, whichshouldonlybefocusedonsupportingcommercial- izationofresearchresults• Making“commercializationofresearchoutput”aregula- ted“fourthtask”fortheuniversities,besidesthethree otherregulatedtasks:1)education,2)researchand 3)collaborationwiththesocietyandinformationofope- rations/business

Catalyzingjointactions......................................................................................................................................................................................................................................

Whileeachstakeholderhasasignificantagendaofactionstotackle,thegreatestvaluewillcomefromfocusedcollabora-tion.Thereareseveralwaystoachievethis.Oneoptionistocreatefocusclustersinspecificsubsegmentswithjointinvol-vementfromkeystakeholders.Anotheroptionistoorganizecustomer-focusedinnovationcompetitions.Yetanotheroptionistobringnewenergyintotheexistingpartneringevents.

Focus clustersAstrongfocusonaspecificmedicaldevicefieldhasbeenakeydriverofsuccessinseveraloftheinternationalcasesstudiedinpreviouschapters,suchasthecardiovascularthemearoundMinneapolis,theimagingfocusinKoreaandthespecializationonhearingaidsinDenmark72.OneofthemainchallengesintheSwedishindustryisitsdiversityandlack

72 ForfurtherexamplespleasealsoreadTechnologyTransferandCommercializationPartnerships,InnovationAssociates,200


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offocus.Therefore,thedevelopmentofasmallnumberofworldleadingfocusclusterscouldignitechangeinthemedi-caldevicecommunity.

Theindustry,academiaandcountycouncils/hospitalscouldtogetherfindanumberoffocusareaswherethereisnaturalenergyandthenbuildaworldleadingfocusclusteraroundsuchareas.Areasselectedshoulda)haveagoodstartingpointbasedoncoreacademiccapabilities,b)addresssignifi-cantunmetcustomerneedsandc)beattractivefortheexis-tingindustrytoexploit.Ideally,areasshouldalsobewithinattractivemarketsegmentswhereinnovationplaysamajorrole.Foreachoftheseareas,animmediate,directedefforttoformaworld-leadingR&Dclustershouldbeinitiated,withthegoalofbecomingrecognizedasworldclassin5-10years.Giventheambitiousgoals,itisunlikelythatSwedenwillbeabletosupportmorethan2-3suchclusters.Therearemanyalternativesfordefiningafocuscluster.Aclustercouldeitherbeaspecificmedicaldevicesegment(e.g.,patientaids)orcouldhavemoreofasystemfocuswheremanydifferenttechnologiescouldbeusedforacommonpurpose(e.g.,elderlycare).

Onepotentialclusterise-health.Swedenhasastrongstartingpointgivenitsindustrialstrengthsintelecommuni-cationsandinformationtechnology(e.g.,Ericsson),itsmanysuccessfulmedicaltechnologycompanieswithfocusontelecommunicationsandinformationtechnology(Sectra’swirelesscommunications,Ortivus’informationanddecisionmakingsupportsystems,CambioHealthcareadministrationsystems),aswellasseveralinformationtechnologycompanies(TietoEnator,WMData)thatareactiveinthehealthsector.Inaddition,theincreasingamountsofinformationinvolvedinpatientcaremakese-healthbothanurgentquestionforourSwedishhospitals,aswellasanattractivesegmentforabroadermarket,whereinnovationcouldincreasequalityandlowercostofoperationsforeconomicallypressuredcarepro-vidersaroundtheworld.

Anotherpotentialareacouldbeasub-segmentofcancertreatment,suchasbraintumors,leveragingthecombinedcompetenciesofworldleadingradiotherapycompanyElekta,fast-growingradiationtherapysoftwaredeveloperRaySearchLaboratories,andtheKarolinskaInstitutecancerfacilities(CancerCenterKarolinskaandRadiumhemmet).Theseinstitutionshavethepotentialtojointogetherinafocusclustertoaddressthegrowingneedforbettercancertherapiesandsolutions.

OtherpotentialfocusclustersinSwedencouldbepatientaids(Permobilandmanysmallandmidsizedcompanies)andelderlycare(Aleris,Attendo).

Focusclusterscouldbejointlyfundedbytheindustry,atechnicalinstitution,amedicalinstitution,thegovernment,auniversityhospitalandacountycouncilandcouldberunasajointventurebetweenthestakeholders.Aboardofdirec-tors,withrepresentativesfromallfinanciers,shouldsettheresearchagendaandraiseandevaluatecommercializationopportunities.World-leadingresearchersintheareawouldneedtoberecruitedtothecluster,andinadditiontoperfor-mingresearchtheclustershoulddesigneducationalprogramstobegiventobothmedicalandtechnicalgraduateandpost-graduatestudents.

Theaspirationsforsuchafocusclusterwouldbeto

1. Becomeaworldleadingresearchorganizationinthe selectedfocusarea,therebymakingSwedeninterna- tionallyrecognizedinthisspecificniche2. Launchanumberofproductsbothonthenationaland theinternationalmarket3. Generatesuccessfulspin-offcompanies4. Contributetoimprovedandmorecost-efficientcare amongstSwedishhospitalsandhelpthembecomeearly adoptersofthedevelopednewtechnology

Thecreationofsuchclusterswouldrequireastronglocalnetworkthatwouldorchestratetheplanning,set-upanddevelopmentoftheclusters.Examplesofactivitiesthatthenetworkshouldorchestratearedevelopmentofstrategicagendaandimplementationplananddecisionsonresources.Insomecases,existinglocalorganizationscouldplaythisrole(e.g.,CentreforTechnologyinMedicineandHealth(CTMH)intheStockholmregion)whileinothercasesthistypeofnetworkwouldneedtobecreated.

Customer focused innovation competitionsAsmentionedinpreviouschapters,oneofthekeyfindingsfromworkshopshasbeenthatSweden’smedicaldevicedevelop-mentsometimesstruggleswithputtinghealthcareneedsinfocus.Oneconcretewayoffocusingattentiononneedscouldbetoarrangecustomer-focusedinnovationcompetitionswhereinventorsareofferedsubstantialfinancialrewardsiftheyfindmedicaldevicesolutionstoasetofpre-definedhealthcareproblems.Thisapproachhasbeensuccessfulinextractinggreatinnovationfromalargetalentpoolinotherscientificareas,suchasthechallengeCanadiangoldminerGoldcorpgavetheacademiccommunityin2000.Inthemid-1990’sexecutivesthoughtthecompany’s50-year-oldmineinRedLakeMine,Ontario,wasnearingtheendofitslife.Conventionaltestsindicatedtherewereunknowndepositsofgold,butthecompany’sgeologistscouldn’testi-mateoragreeonthepreciselocations.In1999theCEOof


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Goldcorp,RobMcEwen,attendedanMITconferenceonopensourcesoftwareandherealizedthatthiswashowhewantedtoidentifywherethelikelygoldveinswhereThere-foreGoldcorplaunchedachallengewithUSD500,000inprizemoneyforthebestsuggestionsastothelocationsofthegoldveins.Theypublishedeverylastdetailofgeologicaldatatheyhadonthesitestretchingbackto1948.Thechallengewashighlysuccessful.Manyoftheentrantsusedunconven-tionalcomputervisualizationtechniques.Goldcorpwassoimpressedwith10contestantsthatithiredthem,andhassub-sequentlydiscoveredanadditional8millionouncesofgold.

AnotherexampleofpublicinvolvementisDanishLego,whohasembraced”leadusermassinnovation”fortheirmostsuc-cessfulproductline,LegoMindstorms.ForthecreationofthenextgenerationofMindstorms,LegosoughttousetheirexistingMindstormscommunity.Fourleaduserswereselec-tedfromthecommunitytoprovidedirectinputonproductdevelopmentandshapeMindstormsNXTfromprototypetofinalproduct.TheuserswerepaidsolelyinLego‘bricks’–andinthefametheyreceivedwithinthecommunity.Adjustedtothemedicaldevicefield,abusinesscompetitioncouldbelaunchedinwhichindividualcompaniesoranatio-nal(e.g.,SwedishMedtechandSwedenBio)orregional(e.g.,CentreforTechnologyinMedicineandHealth)medicaldevicenetworkorganizationwouldaimtosolveanumberofpre-definedhealthcareneeds,inreturnforasignificantprizeforthebestsolutiondeveloped.Onesuchexamplecouldbewithine-health,wherealargecompanydevelopinge-healthsolutions(e.g.,Ericsson),togetherwithahospital,candeve-lopalistofpredefinedhealthcarechallengesforthepublictosolve.Thebestsolutionscouldberewardedwithasumofmoneyprovidedbythecompany,whichwouldhavetherightstodevelopthesolutioncommercially.Asimpleexampletoillustratecouldbehomecaremonito-ring(asubsegmentwithine-health).Itistodaypossibletomonitorwhetherornotapersonhasopenedaboxofmedi-cationeachday,throughtheuseofatriggeringsignal.Thesignalcanbeprocessedintoatextmessagetothecaregiverortoarelative.Buthowcanonebesurethemedicationisactuallytaken?Thecompanysolvingthisconundrumwouldhaveacompetitiveadvantageoverotherproviders,andwouldalsobeabletoprovidebettercareforhomepatients.

Partnering eventsNewenergycouldbeinjectedintotheexistingScandinavianBiotechandMedtechpartneringeventorganizedbyBiotechForum.Theeventisheldyearlyanditsfocusisbothonmed-icaldevicecompaniesandbiotechcompanies.Thepurposeofthepartneringeventistoincreaseconnectivitybetweencompanies/venturecapitalfirmsandresearchers.Today,there

arerelativelyfew(foreignandnational)medicaldevicecom-paniesparticipating:instead,mostparticipatingcompaniesarebiotechcompanies.Anextensivemarketingcampaignisneededtoattractacriticalmassofmedicaldevicecompanies.Thiscampaigncouldbeorchestratedbyanetworkorganiza-tion,butshouldbeenforcedbythelargecompanies.

***TheopportunitytoimprovetheenvironmentformedicaltechnologyinnovationandcommercializationinSwedenissignificantandveryreal.Andthetimetoactisnow.CurrentshortcomingsintheSwedishenvironmenthavebeenformedoverseveralyearsandtheleadtimestocreateapositivetra-jectoryshouldnotbeunderestimated.Itiscriticaltocontinuetheprocessofenthusiasticdialoguethathasbeeninitiatedduringthiseffort.Thisdialoguehasalreadyledtoconcretecollaborationprojects,butmuchmoreisneededtoenhancethelong-termviabilityofSweden’smedicaldeviceindustry.Stakeholdersnowneedtositdownandcommittoeachotherthattheywillactontheirrespectiveagendas.Theyshouldjointlyidentifythe2-3areastheyareenthusiasticabout.Fortheseareas,theyneedtomakeambitiousplansandagreeongovernanceandresourcingmodelsthathavearealchanceofcreatingworldleadingfocusclusters.Thenextsixmonthswillshowwhetherthewillandtheenergyexisttocreatetruefocusedcollaboration.

Nextstepistostarttheimplementationprocessamongthestakeholdersthroughthedevelopmentofamoredetailedactionplanfor2008-2010,whichwouldreflecttheactionpointslistedinourfinalrecommendationchapter.Althoughnotyetdecidedonatthetimeofprinting,thesteeringgroupofthisprojectarewillingtosupportthecontinuedprocessandfindsitrealisticwithacompletedandtransparentplanforKTH-KI-KarolinskaUniversityHospitalbytheendofthefirstquarter2008.ThisshouldbecoordinatedwithotherongoingSwedishinitiatives


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Appendix

AThereport’sdefinitionofmedicaltechnology..........................................................................................................

Definition of medical technology* used in this report

• High-technology devices (equipment and supplies) and/or solutions/systems used to - Diagnose, prevent, supervise, treat or alleviate a disease/injury/ handicap - Examine, modify or replace the anatomy or a physiological process • “Lower”-technology devices mainly used to assist health care professionals in their care of patients, e.g., - Infection control, patient hygiene etc. - Hospital beds, patient lifts etc. Not included• Lab equipment/analytical tools mainly used for research purposes in companies/academia• Pure administrative IT • Services such as dental and orthopedic technicians, equipment servicing, consultant services, etc.• Contract manufacturing

Life

sci

ence

• Medical devicesMedicaldevices

• Biotechnical tools• Bioproduction• Agro biotechnology• Biotechnical food• Environmental biotechnology• Biotechnical medical technology

• Drug formulation• Drug development and CRO• Drug production

• Diagnostics

Biotechnology

Pharmaceuticals

Diagnostics

Definition of medical devices and diagnostics

Products/solutions/systems used in hospitals, other care centers or for out patient/home care

Focus

* Please note that “Medical devices”, “Medical devices and diagnostics” and “Medical Technology” are used interchangeably throughout this report


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MeSH-terms selected from the Analytical, Diagnostic and Therapeutic Techniques and Equipment branch of the Medline MeSH-tree

Diagnosis, Computer-Assisted Breath TestsDiagnostic ImagingDiagnostic Techniques, CardiovascularDiagnostic Techniques, Digestive SystemDiagnostic Techniques, EndocrineDiagnostic Techniques, NeurologicalDiagnostic Techniques, Obstetrical and GynecologicalDiagnostic Techniques, OphthalmologicalDiagnostic Techniques, OtologicalDiagnostic Techniques, RadioisotopeDiagnostic Techniques, Respiratory SystemDiagnostic Techniques, SurgicalDiagnostic Techniques, UrologicalElectrodiagnosisInsufflationKymographyMonitoring, PhysiologicNeoplasm StagingPlethysmographySkin TestsAcoustic StimulationBalneologyBariatricsBlood Component RemovalCardiac Pacing, ArtificialCatheterizationCauteryCryotherapyDecompressionDrainageElectric Stimulation TherapyEmergency Treatment

Hemostatic Techniques HydrotherapyHygieneHyperthermia, InducedInsufflationLithotripsyOrthopedic ProceduresOrthopticsPhototherapyPuncturesRadiotherapyRenal Replacement TherapyRespiratory TherapySorption DetoxificationTherapy, Computer-AssistedAssisted CirculationBiopsyDevice RemovalDrainageElectrosurgeryExtracorporeal CirculationLaparotomyLaser SurgeryMonitoring, IntraoperativeOstomyProsthesis ImplantationReconstructive Surgical ProceduresSuture TechniquesTransplantationBrain MappingCatheterizationCementationConstriction

Equipment Design Equipment FailureEquipment Failure AnalysisIntubationProsthesis FittingRadiometryStereotaxic TechniquesTechnology, RadiologicWhole Body ImagingAir Abrasion, DentalAnesthesia, DentalDental BondingDental DebondingDental EquipmentDental High-Speed TechniqueDental ImplantationDental ModelsDental PinsDental PolishingInfection Control, DentalOral Surgical ProceduresOrthodonticsProsthodonticsSurgery, OralTechnology, DentalTooth PreparationTooth RemineralizationAmplifiersBandagesCatheters, IndwellingDental EquipmentDiagnostic EquipmentDisposable Equipment

Durable Medical Equipment ElectrodesEquipment and Supplies, HospitalGamma CamerasGas ScavengersGastric BalloonIncubatorsInfant EquipmentInfusion PumpsIntermittent Pneumatic Compression DevicesLasersLensesMicrobubblesNebulizers and VaporizersNeedlesOxygenatorsPhantoms, ImagingProstheses and ImplantsSelf-Help DevicesSensory AidsSurgical EquipmentSurgically-Created StructuresSyringesThermometersTomography Scanners, X-Ray ComputedTourniquetsTransducersTransplantsVentilators, MechanicalX-Ray FilmX-Ray Intensifying Screens

Source: Medline

AdditionalanalysesonSweden’sdistinctivenessonresearchandinnovation........................................................................................................................................................................................................................................................................................

Throughtheuseofnetwork analysisitispossibletodeter-minehowconnectedtheSwedishresearchersareinthenet-workofEuropeanmedicaltechnologyresearchers,bylookingattheextentofco-publicationbetweenfrequentlypublishedauthorsinagroupofcountries.Anauthor’sstatusismeasu-redbythefrequencyofpublicationandco-authorshipwithinthenetwork,andanauthor’sconnectednessisdefinedashowimportantanauthorisinlinkingdifferentclustersofauthorsinthenetwork73.AcomparisonofthestatusofSwedishauthorsofmedicaltechnologypublicationsinthenetworkconsistingofSweden,Denmark,theNetherlands,Germany,Switzerland,theUKandIsraelin1991and2006showsthatSwedenisfallingbehind.While27oftheSwedishauthors

fellwithinthetop100authorsinthenetworkin1991,onlyoneSwedishauthorisamongthetop100inthe2006net-work.Thepatternisthesameforconnectedness.In1991,SwedishauthorsactedaskeynodesintheEuropeannetworkandwerecentraltotheconnectivitywithinEurope.In2006,Swedishauthorsweresignificantlylessvitaltothenetwork.

Therearepotentialflawsinthesetypesofmeasures,themostsignificantbeingtheimportanceofresearchersapplyingratherthandevelopingmedicaltechnology.Medline,whichisthesourceoftheanalysis,doesnotallowforseparationofpublicationsdescribingnewtechnologydevelopedandpubli-cationsusingtechnologytoverifyotherresearchresults.

73 AnalysisperformedonMedlinedatausingsoftwarefromVisione,www.visione.info


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Status of the Swedish authors 1991 versus 2006Network of European authors ranked by status of medical technology* publications,

1��1 and 200�

* Network analysis of Medline articles indexed by selected medical technology MeSH terms for Sweden, Denmark, Germany, the Netherlands, Switzerland,

the UK and Israel. Hits include medical technology development as well as applied medical technology. Restriction to authors with a minimum of � (1��1)

and � (200�) publications

Source: Medline October 200�; Visione

In 1991, 12% of the top 10% authors camefrom Sweden…

…but in 2006, only 2% of the authorsappearing among the top 10% are Swedish

Status Swedish authorsamong top 10%

INDICATIVE

Top Swedish authors connectedness with European scientists 1991 versus 2006Connectedness in network of European authors of medical technology* publications

* Network analysis of Medline articles indexed by selected medical technology MeSH terms for Sweden, Denmark, Germany, the Netherlands, Switzerland,

the UK and Israel. Hits include medical technology development as well as applied medical technology. Restriction to authors with a minimum of � publications

during the year 1��1 (12�� authors) and � publications during the year 200� (1�� authors)

Source: Medline October 200�; Visone

Connectedness Individual author

Swedish authorsamong top 10%

Co-authorshipConnectedness1991 2006

INDICATIVE


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Terminology....................................................................................................................................................................................................................................................................................................

Artificialbone:Compositematerial,whichreplacesmetalinboneimplants.(RensselaerPolytechnicInstitute)

Benignprostatichyperplasia:Aconditioncausingnon-can-cerousenlargementoftheprostate.(Prostatehealth)

Biodegradabledrugelutingstents:Astentisasmall,flexible,spring-likedeviceusedtosupportarterywalls.Drugelutingstents(alsoknownasdrugcoatedstentsormedicatedstents),arecoatedwithadrugthatinterfereswitharterialre-block-ing.Inplaceofthestainlesssteelcurrentlyusedinstents,variousbiodegradableframeworksareunderearlyphasesofinvestigation.Sincemetal,asaforeignsubstance,provokesinflammation,scarring,andthrombosis(clotting),itishopedthatbiodegradableorbioabsorbablestentsmaypreventsomeoftheseeffects.(FDA)

Bonestimulation:Thetechniqueofpromotingbonegrowthindifficulttohealfracturesbyapplyingalowelectricalcurrentorultrasoundtothefracture.Stimulatorsmaybeimplantedorwornexternally.(HealthAtoZ)

Brachytherapy:Aformofradiotherapywherearadioactivesourceisplacedinsideornexttothearearequiringtreatment(alsoknownassealedsourceradiotherapyorendocurie-therapy).Brachytherapyiscommonlyusedtotreatlocalizedprostatecancerandcancersoftheheadandneck.(WestVirginiaMedicalJournal)

CAGR:compoundedannualgrowthrate=((endingvalue)/(beginningvalue))^(1/#ofyears)-1

CE:TheCEmark,astylized”CE”(forConformitéEuropéenne),placedonproductstosignifyconformancewithEuropeanUnionregulations

Celltherapy:Theadministrationofgeneticallyengineeredcells,healthydonorcells,orapatient’sownstemcellsasapartofmedicaltreatment.(UniversityofPittsburghMedicalCenter)

Charnleyintramedularhip:ManypeoplecreditSirJohnCharnley,aBritishorthopedist,withperformingthefirstmoderntotalhipreplacement.Hisinnovationsincludedcombiningametalstemandballwithaplasticshellandusingamethylacrylatecementtoholdthedevicesinplace.(AmericanAcademyofOrthopedicSurgeons)

Coronaryarterybypassgraft:Surgeryforcoronaryarterydisease,aconditioninwhicharteriesthatsupplybloodandoxygentotheheartmusclebecomenarrowedandhardened.Incoronaryarterybypasssurgery,thesurgeonattachesapieceofveinfromanotherpartofthebodytothecoronaryarteryaboveandbelowthenarrowedareaorblockage.Thisallowsbloodtobypasstheblockage.(MedlinePlus)

Coronarystenting:Astentisametaltinytubeplacedintoacoronaryarterytoholdthestructureopen.(MedlinePlus)

CTscanners:CTimagingusesspecialX-rayequipmenttoproducemultipleimagesorpicturesoftheinsideofthebodyandacomputertojointhemtogetherincross-sectionalviewsoftheareabeingstudied.Theimagescanthenbeexaminedonacomputermonitororprinted.(RadiologicalSocietyofNorthAmerica)

Diagnosticelectrophysiology:Electrophysiologyisthesci-enceofmeasuringtheelectricalpotentialsgeneratedwithinthebody.Forexample,intracardiacelectrophysiologyinvolvesplacingwireelectrodeswithinthehearttodeterminethecharacteristicsofheartarrhythmias.(MedlinePlus)

Digitalsubtractionangiography:Animagingtechniqueusedininterventionalradiologytoexaminetheheartorbrain.Afteracontrastmediumisinjectedintoaveininthearm,anX-raymachinequicklytakesaseriesofpictures.(AmericanHeartAssociation)

Drugelutingstents:Astent(seeabove)withmedicationonitintendedtoslowthere-closingofcoronaryarteries.(AmericanHeartAssociation)

EBIT:Earningsbeforeinterestandtaxes

Endometrialablation:Treatmenttodestroy(ablate)partofthewomblining(endometrium).Itisusedtotreatwomenwhohaveheavyperiods,knownasmenorrhagia.(BUPA)

Endoscopicsurgery:Aprocedureinwhichanendoscope,along,thintubeholdingacamera,isusedtoperformsurgeryonajointororgan.(MedlinePlus)

Epilepsypacers:Vagusnervestimulationisatypeoftreat-mentinwhichshortburstsofelectricalenergyaredirectedintothebrainviathevagusnerve,alargenerveintheneck.Thistreatmentmayreduceoreliminateseizures.(EpilepsyFoundation)


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Externaldefibrillator:Amachinethatisusedtodeliveranelectricshocktothehearttorestoreanormalheartrhythm.(AmericanHeartAssociation)

Externalpacing:Pacemakersdetectaslowheartbeatandsendelectricalimpulsestothehearttostimulatetheheartmuscletobeatfaster.Thefirstpacemakerswerenottotallyimplantedinthebody.Oneendofasmallwire,calleda“lead,”wasimplantedintotheheart.TheotherendoftheleadwasconnectedtoanexternalpacemakerthatwasACpoweredbymeansofanextensioncord.(Medtronic)

GDP:grossdomesticproduct=consumption+investment+governmentspending+(exports−imports),or,GDP=C+I+G+(X-M)

Growthfactor:Asubstance(asavitaminB12oraninter-leukin)thatpromotesgrowthandespeciallycellulargrowth.(Merriam-Webster)

G7:thesevenleadingindustrialcountries(US,Germany,Japan,France,UK,CanadaandItaly)

Heart-lungbypass:Aheart-lungmachineisalsocalledacardiopulmonarybypassmachine.Ittakesoverfortheheartduringheartsurgerybyreplacingtheheart’spumpingactionandbyaddingoxygentotheblood.(TexasHeartInstitute)

Hemodialysis:Themostcommonmethodusedtotreatadvancedandpermanentkidneyfailure.Inhemodialysis,bloodisallowedtoflowthroughaspecialfilterthatremoveswastesandextrafluids.(USNationalInstituteofDiabetesandDigestiveandKidneyDiseases)

Hollowfiberdialysis:Hemodialysisusingdialyzersmadewithcapillary-sizedhollowmembranes,makingformoreefficientcleansingoftheblood.(Fresenius)

Implanteddefibrillator:Asmalldevice,whichisplacedinthechestorabdomen.Thedeviceuseselectricalpulsesorshockstocontrollife-threatening,irregularheartbeats.(NationalHeart,LungandBloodInstitute)

Intra-aorticballoonpump:Implanteddevicethatpro-videscirculatoryassistancetopatientswithheartfailure.(MedlinePlus)

Intra-ocularlens:Atinyartificiallensfortheeye(oftencalledIOL).AnIOLpermanentlyreplacestheeye’snaturallenswhenitisremovedduringcataractsurgery.(AmericanAcademyofOphthalmology)

Intravenousoxygentherapy:Intravenousinfusionsofoxygenhavebeenusedasacomplementarytherapyforarthritisandotherinflammatoryconditions.(MedlinePlus)

Invitrodiagnostics(IVD):Medicaltestsconductedinatesttube,ormoregenerallyinacontrolledenvironmentoutsidealivingorganism.(BritishInVitroDiagnosticsAssociation)

IPPVventilator:Amachine,whichprovidesshorttermorintermittentmechanicalventilationtohelpthelungsexpandandassistbreathing.(Guidelines.gov)

MagneticResonanceImaging(MRI):MRIusesalargemagnetandradiowavestolookatorgansandstructu-resinsidethebody.MRIdoesnotuseionizingradiation.(MedlinePlus)

Mechanicalheartvalve:Artificial(mechanical)valves,madeofmetal,replacediseasedheartvalves.Valvescontrolthedirectionofbloodflowthroughtheheart.(MedlinePlus)

Nasalventilationforsleepventilation:Sleepapneaisaseri-oussleepdisorderinwhichpeoplestopbreathingforshortperiodswhileasleep.Acommontreatmentforsleepapneaiscalled“continuouspositiveairwaypressure,”orCPAP.Thepatientwearsaspecialmaskoverthenoseandmouthwhilesleeping.Themaskkeepstheairwayopenbyaddingpressuretotheairthepatientbreathes.(Familydoctor.org)

Neurostimulation:Painreliefthroughstimulationofneurons.Therearetwotypesofneurostimulationsystems:onethatiscompletelyinternal(surgicallyimplanted)andonewithbothinternalandexternalcomponents.Foratotallyimplantableneurostimulationsystem,thepowersource(battery)andlead(s)aresurgicallyimplanted.Intheothertypeofsystem,aradio-frequencyreceiverandleadsareimplanted,andthepowersourceiswornexternallywithanantennaoverthereceiver.(Medtronic)

Obstetrics:Abranchofmedicalsciencethatdealswithbirthandwithitsantecedentsandsequelae.(Merriam-Webster)

Percutaneousaorticvalvereplacement:Inpercutaneousaorticvalvereplacement(PAVR),asyntheticvalveistransportedtotheheartthroughasmallholemadeinabloodvesselinthegroin.Thisprocedurecanbecomparedtothatperformedwhenplacingastent,orperformingballoonangioplasty.(Circulation)

PTCA:Percutaneoustransluminalcoronaryangioplasty.Athin,flexibleplastictube,calledacatheter,withaballoonisinsertedintoanarteryandadvancedtotheblockageinthe


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coronaryartery.Theballoonisinflated,squeezingopenthefattyplaquedeposit.Thentheballoonisdeflated,andthecatheteriswithdrawn.Oftenastentisalsoplacedtoholdthearteryopen.(AmericanHeartAssociation)

PTFEvasculargraft:Avasculargraftisaman-madetubewhichreplacesorbypassespartofabloodvessel,mostcom-monlyanartery.Itprovidesatubularbypassforarteries,whichhavebecomenarroworblocked.PTFEreferstothematerialfromwhichthegraftsaremade,PolyteTetraFluoro-Ethylene.(Terumo;MedlinePlus)

Pulseoximetry:Usingasmallmonitorusuallytapedtothefinger,pulseoximetrymeasurestheamountofoxygenintheblood.(MedlinePlus)

Radialkeratotomy:Asurgicalprocedurepopularintherecentpasttocorrectmyopia,ornearsightedness.IthasbeenalmostcompletelyreplacedbyLASIK.(MedlinePlus)

Radiofrequencyablation(RFA):Catheterablationisatech-niqueinwhichathintubeisinsertedintothesiteofdiseasedtissueinordertodestroyit.RFAgeneratesheattodestroythetissue.(MedlinePlus)

R&D:Researchanddevelopment

Skinstaplers:Amechanicalalternativetosutures(stitches)oradhesivestoclosewounds.Staplingcanresultinlessscarringandfewerinfections.(DannemillerMemorialEducationalFoundation)

SolidstateX-ray:Inthisimagingtechnology,X-rayfilmisreplacedbysolid-statedetectorsthatconvertX-raysintoelectricalsignals.Thesedetectorsaresimilartothosefoundindigitalcameras.(RadiologicalSocietyofNorthAmerica)

Teacher’sexemption:InSweden,apersonwhoisemployedandcompensatedforwork,andwhoseemploymentin-cludesmakinginventions,normallyhastoacceptthattheimmaterialrights(suchaspatents,copyrights)areownedbytheemployer(thelawoftheemployer’srighttoinven-tions(1949:345)).Thislawisnotappliedattheuniversity.Instead,apracticecalled”theteacher’sexemption”hasbeendeveloped.Accordingtotheteacher’sexemption,teachersattheuniversityowntherighttocommerciallyexploittheinventionstheymakeinthecontextoftheiremployment.Inventionsmayforexampleberesultsfromresearch

Tissueengineering:Methodsthatpromotetheregrowthofcellslosttotraumaordisease(UniversityofPittsburghMedicalCenter)

Tissuegrowthfactors:Biotechnology-basedtherapies,whichhavethepotentialtofixorreplacedamagedtissueinvari-ouspartsofthebody.ApplicationsmightincludeimprovedwoundhealingandgrowingnewnervepathwaysinpatientswithAlzheimer’sdisease.(ScripReports)

Transcutaneouselectricalnervestimulation(TENS):Thepassageoflow-voltageelectricalcurrenttoelectrodespastedontheskin.Thecurrentisdeliveredthroughwiresfromasmallbattery-poweredunit.TENSisusuallyusedtoalleviatepain.(InteliHealth)

UCSF:TheUniversityofCalifornia,SanFrancisco

Ultrasound:Ultrasounduseshigh-frequencysoundwavestolookatorgansandstructuresinsidethebody.Noionizing(X-ray)radiationisused.Imagesarecapturedinrealtime,sotheycanshowmovementandbloodflowwithinthebody.(RadiologicalSocietyofNorthAmerica)

Vulnerableplaque:Anatheromatousplaquewhichispar-ticularlypronetoproducesuddenmajorproblems,suchasaheartattackorstroke.(TheNewEnglandJournalofMedicine)

WIPO:WorldIntellectualPropertyOrganization.Aspe-cializedagencyoftheUnitedNations.Itisdedicatedtodevelopingabalancedandaccessibleinternationalintellectualproperty(IP)system,whichrewardscreativity,stimulatesinnovationandcontributestoeconomicdevelopmentwhilesafeguardingthepublicinterest.WIPOwasestablishedbytheWIPOConventionin1967withamandatefromitsMemberStatestopromotetheprotectionofIPthroughouttheworldthroughcooperationamongstatesandincolla-borationwithotherinternationalorganizations.(WIPO)

Xenotransplantation:Anyprocedure,whichinvolvesthetransplantation,implantationorinfusionintoahumanreci-pientoflivecells,tissuesororgansfromanonhumananimalsource.Potentially,thistechnologycouldalleviatetheshor-tageofhumanorgansfortransplant.(FDA)

X-rayangiography:Angiographyisaminimallyinvasivemedicaltest.Athinplastictube,calledacatheter,isinsertedintoanarterythroughasmallincisionintheskin.Oncethecatheterisguidedintotheareabeingexamined,acon-trastmaterialisinjectedthroughthetubeandimagesarecapturedusingasmalldoseofionizingradiation(X-rays.)(RadiologicalSocietyofNorthAmerica)


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Personswhohavecontributedtothisreport...................................................................................................................

The project steering groupLars-ÅkeBrodin,RoyalInstituteofTechnologyBertilGuve,RoyalInstituteofTechnology/CentreforTechnologyinMedicineandHealthLarsKihlström,KarolinskaUniversityHospitalBoNorrman,KarolinskaInstitutetCarlJohanSundberg,KarolinskaInstitutet

OtherThesteeringgroupwouldliketosendlargeandspecialthankstothefollowingpersonswhohavecontributedsigni-ficantlytothisreportbytakingthetimetobecomeintervie-wedand/orparticipateinworkshops.

PerAsk,Professor,LinköpingUniversityPeterAspelin,Professor,KarolinskaInstitutetErikBaas,Director,MedtronicStefanBengtsson,ExecutiveVicePresident,ChalmersUniversityofTechnologyCarlBennet,Chairman,GetingeHåkanBillig,SecretaryGeneral,SwedishResearchCouncilConnyBogentoft,CEO,KarolinskaDevelopmentMatsBoman,Professor,UppsalaUniversityGunillaBökmark,CEO,SahlgrenskaScienceParkKennethDanehorn,SiemensMatsDanielsson,Professor,RoyalInstituteofTechnologyThorbjörnEkström,DirectorofR&Dandeducation,StockholmCountyCouncilMikaelElam,Professor,GöteborgUniversityHåkanElmqvist,Professor,KarolinskaInstitutetAndersEricsson,InterimPresident,RoyalInstituteofTechnologyBjörn-ErikErlandsson,Headofmedicaltechnology,UppsalaUniversityHospitalAndersFlodström,Director,SwedishNationalAgencyforHigherEducationRuneFransson,UniversityDirector,KarolinskaInstitutetPamFredman,ViceChancellor,GöteborgUniversityAnnemarieGardshol,SeniorVicePresident,GambroHansvonHolst,Professor,RoyalInstituteofTechnologyBertilHållsten,MemberofBoard,KarolinskaDevelopmentBirgirJacobsson,CEO,KarolinskaUniversityHospitalMagnusJacobsson,VicePresident,AstraTechSörenJohansson,VicePresident,ElektaStaffanJosephsson,SecretaryGeneral,TheSwedishHeart-LungFoundationTorbjörnKronander,President,SectraImtechStaffanLarsson,Processowner,NutekLaurentLeksell,ExecutiveDirector,Elekta

CarolaLemne,formerCEO,DanderydssjukhusStenLindahl,DirectorofR&Dandeducation,KarolinskaUniversityHospitalJanLundahl,Partner,CapManKajLindecrantz,Professor,UniversityCollegeofBoråsStaffanLindstrand,Partner,HealthCapStigLundbeck,Founder,GrippingHeartJohanLöf,CEO,RaySearchLaboratoriesJörgenLönngren,InvestmentDirector,IndustrifondenPeterLönnroth,Bitr.hälso-ochsjukvårdsdirektör,VästraGötalandsregionenJohanMalmquist,CEO,GetingeBengtNielsen,GeneralManager,GEHealthcareKatarinaNordqvist,HeadofBiotechnologyDepartment,VINNOVAMargaretaNorellBergendahl,DeputyPresident,RoyalInstituteofTechnologyJanNylander,ExecutiveVicePresident,InnovationsbronIngemarNäslund,Physician,KarolinskaUniversityHospitalMikaelPersson,Professor,ChalmersUniversityofTechnologyGeorgiosPsaros,VicePresident,MaquetTomasPuusepp,CEO,ElektaUlfRosén,CEO,ProstaLundLarsRydén,ProfessorEmeritus,KarolinskaInstitutetAnnaSandström,Analyst,VINNOVACeciliaSchelinSeidegård,Chairman,RoyalInstituteofTechnologyAkbarSeddigh,Chairman,Eleka,Ortivus,InnovationsbronetcPhilipSiberg,CEO,CMAMicrodialysisLena-KajsaSidén,ScientificSecretary,SwedishFoundationforStrategicResearchGöstaSjöholm,BusinessCoach,STINGBengtArneSjöqvist,VicePresident,OrtivusPeterSjöstrand,Chairman,GambroGöranStemme,Professor,RoyalInstituteofTechnologyOlleStendahl,Professor,LinköpingUniversityClaesStenlander,CEO,VibratechLenaTreschowTorell,CEO,RoyalSwedishAcademyofEngineeringSciencesLiTsai,Professor,KarolinskaInstitutetAndersWaldenström,Professor,UmeåUniversityMatsWallin,Physician,KarolinskaUniversityHospitalEddieWeitzberg,Professor,KarolinskaInstitutetJanWikander,Professor,RoyalInstituteofTechnologyHansWiksell,Professor,KarolinskaInstitutetAndersWieslander,VicePresident,GambroChristianÖstberg,CEO,GrippingHeart


December 2007

Royal Institute of Technology

Karolinska Institutet

Karolinska University Hospital


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