MARKET PLACE

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Why is the Swiss medical device technology industry so strong?

A number of conditions have been created and improved on over the decades to make Switzerland a unique environment to do business. The country has what I term a “clinical culture,” with a long clinical tradition of private clinics and public hospitals and excellent clinical skills. Its main competence is engineering excellence, and precision and quality are important components of the Swiss industrial culture. In 2007, Switzerland was ranked 7th in the world for logistics performance and services.¹ It offers a strong academic base and know-how in a range of areas. There is also a large diffusion of suppliers of all kinds and companies are able to source materials/components and expertise “locally.” All these factors have allowed the industry to develop.

Swiss companies do seem to be highly innovative, why is this?

This is a result of the combination of the factors described above and a pragmatic attitude to innovation. In Switzerland, innovation is defined as having success in the market. Innovation is much more than having an idea or even making the product. Success lies in how the innovation/ product performs commercially, and to be successful in this way it is important to take ideas from the market and the customer, rather than develop on a purely technological basis.

What are some of the aids with innovation that are available to companies?

New product development is fostered by initiatives such as the Swiss Government’s CTI Medtech initiative.² CTI promotes research by Swiss organisations working in cooperation with national and international industrial partners. It provides support and finances projects between academia, entrepreneurs and medical device companies. Funding is not given directly to companies, but university departments are funded (mainly the salaries of researchers) for commercial company projects. Funding is awarded to projects that show the most promise/realistic chances of success in the market. Applicants need to demonstrate, on the basis of business plans, the degree of innovation being introduced, how it compares with the competition, how the product will be affordable for the market, how will it be taken to launch, and their ability to lead the project in a professional way. Since 1998, CTI Medtech has funded 150 projects and currently more than 50 are running.

What are the current challenges for Swiss medical device manufacturers?

To continue to be competitive and innovative. Much of the industry’s competitiveness is based on its production skills. The industry is able to set up hi-tech, intelligent plants. For example, Medtronic produces the majority of its pacemakers in Tolochenaz, near Lausanne. This facility has the highest profitability of all of the company’s facilities, more than its operations in Puerto Rico and China, because it uses the plant and the people in the most time efficient way. The innovation and good ideas of the supplier base are transferred into production skills and are not being replaced by low cost countries.

Why should, indeed do, nonSwiss medical device manufacturing companies set up facilities in Switzerland?

The country offers a unique environment for proliferation. Not withstanding the conditions already mentioned, there is a favourable tax system, support for relocating and good conditions for performing clinical trials. NonSwiss companies will find complementary knowhow in R&D, intelligent production and a chain of “local” suppliers that allows them to source everything locally. For those seeking to start a venture in Switzerland, each of the country’s 26 Cantons has an organisation that assists with economic development.

Where are the medical device technology R&D institutions?

Switzerland has two polytechnics, ETHZ (www.ethz.ch) and EPFL (www.epfl.com), several universities, and seven universities of applied sciences. EMPA (www.empa.ch) is a centre of excellence in materials sciences. CSEM (www.csem.ch) is a semiprivate organisation that develops products coming from university ideas. The Paul Scherrer Institute (www.psi.ch) has extensive know-how in microand nanotechnologies.

What about security of intellectual property in a collaborative project?

There is a strong intellectual property rights culture in Switzerland. Patent issues are important, patent infringement is extremely serious and patent protection is respected. The patent process is quick; a priority date can be easily set, which allows the inventor one year to further develop the idea and to make the protection international.

Can you name some recent product development activities?

Annual awards are made by CTI Medtech for the best medical device technology initiatives. In 2007, the award was won by the Direct Accoustical Cochlear Stimulation (DACS) device.³ This system couples directly to the inner ear fluid. It consists of an implantable electromagnetic transducer and an externally worn audio processor. The transducer drives a tiny rod implanted behind the ear using a specially developed retomeatal microsurgical procedure. The system was developed by Professor Rudolf Häusler and Dr Marco Caversaccio of University Hospital Insel, Berne; Dr Guoyan Zheng of the University of Berne; and a world leading Australian company, Cochlear, which is based in Sydney and has an affiliate in Switzerland.

What trends do you see developing?

It is my conviction that medical device technology will develop successfully if it takes account of medicine first and engineering second. Engineering is merely the enabler, necessary and justified, but an enabler. This shift in prominence is underway in Switzerland, and is needed globally. This change in priority is important because it will mean more attention is paid to doctors, patients and the market. If medical device technology places medicine first, companies will have success in the market place.

This interview was conducted with Professor Dr Gilberto Bestetti, Head of CTI Medtech and Chairman of the Board and Partner of Novo Business Consultants AG, Stadtbachstrasse 64, CH-3012 Berne, Switzerland, tel. +41 31 306 19 14, e-mail: gilberto.bestetti@novo-bc.ch, www.novo-bc.ch.