Inside MedTech - The European Landscape

Having spent the last few weeks travelling Europe and spending time in the DACH region and in Ireland, there are some common themes and challenges arising across the European market. In my opinion, there has never been a more exciting time for MedTech, there is a spotlight on the industry globally and MedTech is being viewed as the solution for healthcare challenges and local governments have identified MedTech as an economical priority. That being said, it’s probably never been more difficult to succeed sustainably.

In today’s blog, I am going to focus on the 5 hottest topics that featured time and time again, at conferences, in meetings and through general networking conversations.

Europe is being de-prioritised

Without doubt the most talked about topic at all of these events and in the wider MedTech industry is the fact that Europe is being de-prioritised. This is the culmination of an almost decade long swing. Historically, Europe has been the place to land first, embracing innovation and creating a smooth, yet diligent pathway for market access. I have been in the industry for 10 years and it has always been land in Europe first and then consider U.S. expansion. Now, it has come full circle and it is commonplace for companies to target the U.S. market first. There are a whole host of reasons for this, it is fair to say the U.S. market and the FDA have invested in improving the process and have been driven to welcome more innovation. There is also no hiding from the opportunities that come with successfully commercialising a product in the U.S. and the scale of growth that can come with this. However, the reason this is happening centralises around MDR & IVDR. The process is more expensive (a rise of 75% in associated costs), more time consuming and more confusing. Ultimately, MDR and IVDR are not living up to their stated objectives. They claimed they would establish a robust, transparent, predictable and sustainable regulatory framework which ensures a level of safety and health whilst supporting innovation. In reality, the regulatory system is unpredictable, complex, slow and costly and the impact is that innovation is impacted; 50% of MedTech companies are putting decisions on hold in Europe. There is a lack of specific accelerated pathways and there is a distinct lack of a single accountable management which is responsible and corrects issues. Because of this, there are ample examples of R&D moving to the U.S. where the FDA is far more predictable. Now, this isn’t something that is being ignored and is finally getting the attention it deserves. In September, MedTech Europe, along with 34 national associations, have called for a reform of the European regulatory framework and momentum is gathering for change to be implemented. An extension has been granted until December 2027 or December 2028 dependent on the risk of a product and a review has been pencilled for May 2027 with EY being appointed to conduct it.

The problem is, change needs to happen fast. Not only has Europe fallen way behind America, but emerging markets like Japan are also viewed to be far more attractive than Europe currently. We wait to see exactly how Europe reacts.

When should a founder “let go”

A recurring topic of conversation, when should a founder “let go” of their company and embrace the opportunity that can come with new leadership? We have seen so many examples of great products and incredible healthcare solutions never making it to market because they didn’t have the right leadership or structure in place. Now, this isn’t to say all founders fall into the same category, far from it! It is more to highlight there is a big difference in the skillset required to invent a product and take said product or solution to market with an effective commercial strategy. The importance of this will only be highlighted further when looking for funding and the due diligence VC and PE firms will undertake; and when you are looking to attract and retain talent. People are choosing leaders as much as they are choosing products and logos. While this is clearly an important subject and one that everyone has an opinion on, for what it is worth, I absolutely get it. It must be incredibly difficult to let go of a company you have built, or a device you are passionate about. I can’t even begin to imagine the pride someone must have if they are able to create something that can make such a positive impact on so many people’s lives. That being said, it has never been more important to perform your own GAP or SWOT analysis’ and identify what impact players you need around you to make this a success.

Great people can make an average product successful. The wrong people can make a great product fail.

Digital & Connected Health

Probably no surprise at all to see Digital & Connected Health feature. Look at any major MedTech news outlet or source of information and Digital Health or AI in Healthcare will feature throughout. What is clear, is that for digital health to truly thrive, a clearer reimbursement process needs to be implemented. Currently, reimbursement in Digital Health is essentially left to each country to create their own framework, which is leading to an inconsistent approach. As it stands, Germany is seen to be leading the way with their DiGA programme, albeit this isn’t without its own challenges. Beyond reimbursement, one of the biggest obstacles to success is adoption, both regarding patient engagement & practitioners supporting the innovation. There have been 54 approved DiGA’s but only 13% of users were consistently using apps after 6 months and only ⅓ of Doctors in Germany are willing to prescribe them. The other glaring challenge is companies’ cyber readiness. The threats at play are huge and realistically, the pool of elite talent in cyber is limited. The FDA have announced they will be implementing an RTA (refuse to accept) any submissions that haven’t properly addressed cyber. It will be interesting to see if MDR follows suit, but this is absolutely an area of concern and an area that isn’t going to go away quietly.

This isn’t to say there isn’t loads of incredibly positive noise around Digital Health as well. There seems to be so many benefits if we can get this right and one of the most exciting developments is how this can improve healthcare for people in countries that wouldn’t previously have had access to life-changing solutions.

Talent – One of the biggest threats to your company and the industry

Something that has been very interesting, is the growing admission that talent is a genuine threat to success in the industry. Having a passion for talent and being embedded within it every single day, it’s been clear for a while that we have a combination of factors creating a global talent crunch that is going to threaten innovation & growth within MedTech. For starters, the market is evolving and skills that are needed now, either haven’t previously existed, or exist in very few numbers. It’s great to see initiatives focused on upskilling individuals, for example in Ireland the Irish Skillnet is offering opportunities to upskill in Digital Health. More countries and more companies need to consider this. We also need to consider different talent pools. Proactive cross-functional movement, attracting people back from career breaks and identifying other industries that might be more advanced in certain areas are just a few ways you can address some of the problems. Alongside this though, we also have an ageing population and workforce. There is a clear picture that most companies have not succession planned effectively and there is a void particularly in the next generation of senior leaders. The initiatives to attract future generations and upskill professional from entry to mid-level are fantastic, but they won’t fill the void in senior & executive leadership positions. There seems to be a common misconception that because of the number of redundancies over the last couple of years, there is a surplus of talent available which just isn’t true, mainly because a large proportion of those made redundant were approaching or already at retirement age.

For this to be something business owners and government agencies are openly identifying as a risk, it’s clearly something organisations need to take seriously.

The most competitive investment market of a generation

I said at the start of this blog, there has never been a more exciting time for MedTech but I also said it has probably never been more difficult to succeed sustainably. From a macro perspective, investment is down. There’s no hiding from that. However, I do feel this is made to seem worse by the fact there have never been more start up, more innovation and more competition to get to market. The magic formula hasn’t changed, it’s all about identifying unmet needs and creating a solution that enhances both the patient & physicians experience. The challenge is that PE & VC firms are doing more due diligence than ever before, the large corporates have more options & in most cases, less money and the competition to get the best solution to market first has never been hotter. The positive news is that there is a common belief that 2024 should present a much more consistent and stable market and wider economy. Consistency gives investors much more confidence and there is an expectation investment will pick up through 2024. It’s also still expected that the MedTech industry will enjoy huge growth between now and 2030.

In conclusion, it’s fair to say we have several challenges in front of us, but it’s also reasonable to be incredibly optimistic about the future of MedTech and the wider healthcare industry. Something not referenced in this blog but widely discussed is HealthTech and the convergence of MedTech, Pharma and Bio combining expertise and working closer together for a mutual goal, which is really encouraging. There is some phenomenal innovation happening and peoples’ lives are being positively impacted every single day. I’m so proud to work in this amazing industry and I am excited to see what the future holds for MedTech and healthcare.