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Turning potential into reality

Medtech is developing value-based healthcare for the benefit of patients. With government support, the UK can be a global lead in nurturing innovation.

The medtech sector is broad and exciting. It is built on solid foundations: necessity, hard work and innovation. Products are developed to target a specific need, be it the need to do something faster or more efficiently, cleaner or more cost effectively. There are thousands of products on the market, from wound dressings, needles and syringes, pacemakers, knees and hips, MRI scanners and blood pressure monitors. The products made are integral to the delivery of modern healthcare and chances are, you will need medtech throughout your life. The sector employs close to 100,000 people here in the United Kingdom, generating a collective turnover of £17bn.

When we consider the value of getting people back to work, paying their taxes, removing the need for carers and employer sick pay, medtech transcends the operating theatre. It allows people to live their lives the way they intend to. The Association of British Healthcare Industries (ABHI) is the trade association representing this sector. With over 260 member companies, ABHI leads the advocacy of the industry to advance access to safe and effective medtech in delivering high-quality patient care. When we look at the positive impact on patients, the healthcare system and the wider economy, the capabilities of our members cannot be underestimated.

Yet despite the medtech available, there is often a gap between ambition and reality. In a global context for healthcare, the UK’s differentiating factor is the National Health Service. As the fifth-largest employer in the world, it is comfortably the biggest single-payer health system.

The NHS can be a superb test-bed for members’ innovative technologies, yet navigating the challenges of the market are difficult. As initiatives to reduce the number of suppliers kick in, survival is becoming tougher, and naturally, SMEs are disproportionately affected. These are often British companies, supplying British innovation. Their loss to the NHS affects the health and wealth of our nation.

For a healthcare system to be handled efficiently, managing cost savings where necessary and appropriate is crucial. However, the cheapest product does not always mean the best value. A product that has a longer shelf life, is more durable and of a higher quality, may cost fractionally more per unit, but will have better outcomes for the patient and the system. This, in turn, leads to far greater cost savings in the long run.

Partnered with this is the effect of Brexit. Its impact has seen manufacturing costs significantly increase due to the weaker pound. Suppliers have traditionally absorbed price fluctuations, but this has been particularly challenging. Greater contract flexibility is needed to offset such increases.

Medtech products, like those in many other sectors, rely on international supply chains, meaning that products are moved around different countries for material sourcing, manufacturing, packaging and sterilisation. It is not uncommon for a “British” product to have touched several jurisdictions before reaching the market place. For suppliers to be able to move their products across borders, there needs to be practical measures in place to ensure the supply of products to patients is uninterrupted.

Regulation underpins all areas of medtech and for the last eight years, ABHI has been working with the Medicines & Healthcare products Regulatory Agency (MHRA) and European partners to ensure that this next generation of regulation for devices is considered the “gold standard” globally. For our industry, this modernises the original rules, bringing together best practices from existing Commission guidance. The transition period is now underway and by May 2019, the new regulation must be adhered to by European Union members in full.

Post-Brexit, the UK will require its own, sovereign regulatory system. We are strongly advocating a pragmatic approach by the government to develop such a system, which should include the adoption of the new regulation, and any secondary legislation arising from it. A recent survey to the ABHI membership found almost unanimous agreement with this ask, with 97 per cent of companies eager to avoid regulatory divergence from the EU.

Yet despite the challenges and uncertainty, 2018 is filled with opportunity. We are seeing real support and backing from key decision makers. For example, the government’s response to the Accelerated Access Review has highlighted the importance of speeding up the uptake of innovations through a variety of support programmes.

Furthermore, we have the Industrial Strategy which was launched in November 2017. As part of its roadmap for success, a specific sector deal for life sciences has been announced as a key area for future growth. Medtech will be a pillar in ensuring its success.

Since Brexit, members tell us that exports of international orders have increased by over a third, and more companies are looking for new markets outside of the EU. With greater practical trade support from government, this can boosted even further. To complement this, ABHI have seized the initiative at international level, by launching the ABHI Innovation Hub at the Dell Medical School at Austin, Texas. The Hub offers UK companies the opportunity to locate themselves at a world-class facility and develop their United States business within an ecosystem of clinicians, investors and mentors. This has been tremendously successful, and we have ambitions to replicate this offering to other key global markets. Our outreach is reciprocated by encouraging inward investment through ABHI’s international membership scheme. Non-UK domiciled companies looking to introduce innovative medtech to the UK are offered insight and market-access knowledge, as well as assistance from several partner organisations, including the Department of International Trade.

Throughout myriad of changes across the healthcare landscape, ABHI continues to lead and guide members. Collaboration between industry and the NHS is vital. This is where trade associations can have real impact, as the interlocutor between the public and private sector. We are uniquely positioned to act as the glue for new models of care delivery, particularly in the digital space. When we consider the sheer potential healthcare data has in revolutionising services as we know it, I firmly believe there has never been a better and more exciting time to work in our industry.

Philip Kennedy is chairman of the Association of British Healthcare Industries.