Medical Device Link.

Originally Published EMDM July/August 2003

Med-Tech Market Report

Increased spending on the United Kingdom’s National Health Service and a joint government-industry initiative to increase access to medical technology and stimulate innovation offer the prospect of a more dynamic market. Improved growth of medical technology sales would boost the country’s share of the European market from its current 10.6%, with sales in the region of e5.8 billion.
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Unlike most other European markets, the United Kingdom is stepping up public healthcare funding to bring it in line with the EU average. The government expects total UK healthcare expenditures (public and private) to grow 7.5% in real terms per annum. It is projected to reach 9.4% of GDP in 2008. Financing changes in the hospital sector envisage the adoption of a case-mix system to encourage hospitals to utilize resources more effectively. Activities that use similar resources will be grouped together into Health Resources Groups (HRGs) and a new single national tariff will be set for each group, along the lines of the DRG system. By 2006, virtually all NHS Trust activity is expected to be commissioned on the basis of HRGs, contributing to improved output and reduced costs through shorter hospital stays.

Ensuring that the new hospital financing mechanism does not hinder the uptake of medical technology will be a priority for industry. The Association of British Health-Care Industries (ABHI) is arguing the case for better market access through the Healthcare Industries Task Force (HITF). The group was set up by the government in 2003 to identify ways to develop the UK healthcare industry and to maximize benefits to patients from healthcare products. 

Medical device companies hope that the HITF will pave the way for a better operating environment for industry, providing incentives to improve competitiveness and giving industry a greater say in NHS policy and market regulation, comparable to what was achieved by a similar joint task force in the pharmaceutical sector. Cochaired by Lord Warner, Under-Secretary of State for Health, and Sir Christopher O’Donnell, chief executive of Smith & Nephew, the task force is due to report by the end of 2004.

Industry also harbours optimism that HITF will engender a change in culture in the NHS that will lead to a more rapid uptake of new technology. Assessment of technologies by the National Institute of Clinical Excellence is perceived as a double-edged sword by the industry: a negative evaluation effectively excludes NHS funding, whereas even a favourable assessment does not guarantee widespread acceptance.

Copyright ©2004 European Medical Device Manufacturer