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June 20, 2011

In the middle of our activities in June stood our participation at the MedTech Pharma Partnering Event as well as the attendance at a seminar on Market Access Germany for medical device companies. Both events were organized by Forum MedTech Pharma, a German-based support organization for companies and institutions operating in the medical and pharmaceutical field counting over 600 members in 14 countries (with German members as majority).

The MedTech & Pharma Partnering Event was pretty impressive: over 150 participants, mainly medical device manufacturers and medical device service organisations, attended - representing 120 institutions. The formula was “speed-dating”, with a possibility of inviting interview partners via an online website before the event. The time of going through 120 company profiles was worth spent: we had 15 interviews scheduled (each of them 30 minutes), wall to wall from 9h30 in the morning to 6 pm. We met with several medical device manufacturers and HealthIT developers interested in entering the Canadian market; with technology transfer institutions and business accelerators searching for licensing/cooperation partners (such as the Bayerische Patentallianz, the central technology transfer organization for all Bavarian university IP), or the Medtech Innovation Center in Denmark), as well as with service organizations based in Germany or across Europe offering assistance to North-American firms wishing to enter the European and German market (HGC GesundheitsConsult, Yes Services or Senetics). Also representatives of large industry players were present, such as Siemens Healthcare, Sanofi and Schott.

During the following reception and dinner, we met with representatives from the Fraunhofer Institute for Photonic Microsystems in Dresden, Germany, as well as with companies from Austria and Denmark.

The next day was dedicated to a seminar on Market Access Germany addressing a range of issues that foreign medical device companies need to face if they wish to market their medical device products or services in the German market. Topics ranged from an overview on the structure of the German market for medical devices, to explanations on the German healthcare system (private and public), on reimbursement strategies, on how to cope with emerging purchasing organizations regrouping several hospitals, on CE marking and specific technical issues concerning the German market, as well as how to market a medical device to a German hospital or end-user.

According to the presentation of Ms. Veira-Schnitzler at healiz, the overall market for healthcare expenditures in Germany is growing steadily at an annual rate of 5%/year representing 278,3 billion € in 2009, financed by public health insurance companies (58%), private households (14%) and private insurance companies (9%). As far as the structure of the German medical device industry is concerned, a strong concentration of larger companies can be observed: in total , the German medical device industry counted 22 billion € revenues in 2010, of which 20 billion € are generated by around 350 companies with more than 50 employees and (only!) 2 billion $ revenues by around 750 companies with less than 50 employees.

Ms Veura-Schnitzler also compared the different environments that medical device companies are facing in the USA and in Europe. Citing the BVMed - Bundesverband Medizintechnologie e.V. - Medizintechnik (the German Association for medical technologies), market access can be realized in average three years faster in Germany compared to the US (CE marking takes about 11 months, while FDA approval takes on average 54 months). Also major cost differences play in favour of Germany: certification costs in Germany are between 7,000 € and 80.000 € while costs for PMA certification in the US can go up to 230,000 €.

This explains the growing trend of North America based medical device manufacturers to seek approval for new medical devices in the first place in Europe, which allows them also, with reasonable modifications, access to the Canadian and Australian market as well as entering Gulf-based Arabic countries.

Overall, the Market Access Seminar provided an excellent summary on the challenges for successfully entering the German market. While these efforts are not to be underestimated, the market potential as such as well as a need to identify new, cost-cutting treatments continue to make the German market attractive and promising.