MedTech Innovation Continues to Drive Europe’s Health and Economy
While the overall number of European patent applications dropped slightly in 2020, there was strong growth in technical fields related to healthcare and life sciences such as pharmaceuticals, biotechnology, and medical technology (source: European Patent Office). And despite the pandemic, medtech not only represented the most inventions during 2020 but it surpassed digital communication technologies, including 5G, for the top spot among tech. In addition, three of the five winners for this year’s European Inventor Award were focused on health-related innovation including nasal drug delivery, nanomaterials in dentistry, and advances in tissue engineering.
Leading European Technology Fields – Share of Patent Applications in 2020
Source: EPO
In addition to being an impetus for innovation, the health and social care sector is a large employer for Europe, representing nearly 12% of all employed people (source: Eurostat). While not nearly the same scale in terms of employment, the medtech sector is sizeable in terms of the tech industry at an estimated 760,000 people across 33,000 companies (source: MedTech Europe), and it provides direct technical support for those providing care. Not only a sustainable source of economic growth for the region, medtech also aids in balancing trade—Europe had a positive medical devices trade balance of € 8.7 billion in 2020 (€ 12 billion prior to the pandemic) with the main trading partners being the United States, China, Japan and Mexico (Source: MedTech Europe, International Trade Centre). Vamstar estimates that the European medical technology market accounted for 26% of the world market in 2020, and the industry’s long-term growth rate is expected to return to 4-5% per annum.
Germany, with the largest medical technology market in Europe, is an example of the potential scale the industry could reach in other European countries. According to a paper by the International Trade Administration, ‘Healthcare and Medical Technology’, Germany’s medical technology market doubles the size of France and triples Italy, UK, and Spain. It accounts for 25.6% of the European market in total.
How Better Procurement Practices Can Spur More Innovation
For similar success in the rest of Europe, different procurement practices could be used. These include value-based procurement (VBP), most economically advantageous tender (MEAT) criteria, and artificial intelligence (AI). MEAT-based criteria and VBP focus on non-priced outcomes. For instance, if a patient spends less time in hospital after a procedure, due to the equipment used, then less resources and time are needed for their recovery. This benefits both the hospital and the patient. Such innovative equipment is an example of medical technology. Thus, the sector is important in facilitating VBP. Although these contracts may not be the lowest price, they provide the best outcomes, with long-term benefits.
This procurement practice is growing in use in healthcare, but this growth is restricted by current processes. At present, only 12% of buyers use electronic systems which are capable of achieving VBP. A related whitepaper from Vamstar titled ‘Improving Tender Performance Using AI’ provides additional details on this topic, including how roughly 40% of tasks in procurement are automatable (source: McKinsey). Automated e-processes can speed up these tasks and allow VBP to be achieved more easily.
It would be impossible to manually search through all tenders and identify MEAT-based criteria. To circumvent this, Vamstar has developed AI which allows VBP contracts to be secured much faster. The AI finds data, cleans it, and then presents it in accessible forms to interested parties. It scans multiple sources, such as hospitals, for contracts. Tenders are then matched and auto-scored for eligibility. From there, VBP contracts which benefit both buyers and suppliers can be more quickly made. As a result, medical technology could be in even higher demand and the market even more profitable.
Vamstar and the Future of MedTech
The medtech sector is important to Europe’s economic growth—it is a source of innovation, it supports healthcare provision, and provides sustainable employment. VBP can allow the healthcare sector to capitalize on a value-based approach for medtech.
However, achieving VBP is a process with barriers. A lack of automated systems slows procurement and prevents the most suitable contracts from being formed. In addition, not all tenders with non-profit criteria are termed ‘VBP’ tenders, these are not easily identifiable. Vamstar’s AI-driven healthcare and life sciences marketplace helps to solve both issues. The system dissects the entire contracting landscape to recognize when VBP is possible. As the largest healthcare marketplace bidding platform, Vamstar is uniquely placed to assist companies with navigating VBP.
