Vamstar at The MedTech Forum 2023

Usage of ESG Criteria in MedTech Tenders Across Europe

Vamstar was present at the largest health and medical technology industry conference in Europe, organized by MedTech Europe in Dublin, Ireland, from May 30th to June 1st, 2023. Vamstar CEO Praful Mehta spoke to a room full of industry leaders about how we are using artificial intelligence to identify ESG criteria in tenders and moving commercial and procurement teams to a higher level of performance. As the world has been buzzing around the term AI and its potential implications for the future, Vamstar has already been using AI for many years as part of its pragmatic set of tools to bring innovations and more efficiency to tendering and procurement in healthcare. However, the next big shift in public procurement is from a transactional price-based approach to a broader value-based approach. This change in paradigm requires much more information.

Finding a needle in a haystack – data gathering

First, Praful explained how our team of experienced AI and machine learning engineers aggregated tender data from more than a thousand sources, conducted targeted sampling in the most prominent countries, used our proprietary AI to identify when language regarding ESG criteria was included, and developed a structured data model to enable more than 3,500 relevant tenders to be analyzed by product category. The analysis showed that in the big European countries, there is strong momentum in ESG adoption in MedTech tenders (7.5% compound annual growth), with some mandatory regulations taking full effect from this year onwards.

Making sense of the data 

Secondly, Praful showed how gathering all this data is one thing, but making sense of these terabytes of data is something entirely different. The Vamstar data scientists and engineers work together to identify patterns and correlations by analyzing meta data and the precise language that is used in all these various tenders. Using AI can be extremely powerful in this task, as shown by language-based AI models such as Google’s Bard and OpenAI’s Chat-GTP have shown. Secondary research on policy frameworks was added to the data analysis to create a complete view of ESG implementation today. 

Thirdly, emphasis was placed on the human intelligence and health experts who critically assess what other information is missing from the picture and how different factors in the tendering process are influencing each other.

Environmental, Social, and Corporate Governance criteria

Over the last five years, there has been an increase in the amount of medtech tenders that incorporate ESG criteria. This growth will only continue since many EU and local regulations come into effect over the next several months and years, which further require public health institutions and companies to adhere to ESG criteria. 

Vamstar’s technology can specifically identify language related to ESG themes to accurately highlight which part of tenders are focused on ESG criteria. Examples of the language used to identify terms include the need for ‘eco-labels on products,’ the ‘percentage of recyclable equipment required,’ ‘carbon emission calculations,’ ‘adherence to various declarations regarding human and workers’ rights,’ societal challenges such as ‘inequities and equal opportunities,’ and ‘workers’ protections.’

Interestingly, Vamstar sees more growth in environmental and social criteria being required while governance criteria often lag. The most frequently seen criterion within the environmental theme is the recyclability of products and packaging, whilst complete net-zero emissions or entire life cycle environmental impact assessments are less frequently required. Most of these ESG regulations are not product-specific but rather extended across various product segments, such as consumables, imaging, devices, and single-use items.

Currently, the Nordics (Norway, Sweden, Finland, and Denmark) are leading the European implementation of healthcare tenders with ESG criteria, whilst some countries with a bigger-sized medtech industry, such as Italy and Germany, need to catch up with their policy frameworks. However, as mentioned before, most of the European countries are committed to quickly implementing these ESG criteria over the next few years; thus these current laggards could become the leaders of tomorrow. Furthermore, we see that some specific buyers are more aggressively selecting for ESG criteria than their country on average, indicating that the tender process has a local as well as an international aspect.

Creating meaningful change in healthcare procurement requires careful alignment between all stakeholders in the medtech sector. That is why events like the MedTech Forum Europe are essential for meeting other industry leaders, facilitating meaningful discussions, and sharing insights, challenges, and new ideas. Vamstar is proud to be part of a wider community leading for sustainable change in healthcare. 

We strive to bring more procurement efficiency by using new tools and creative innovations. If you are interested in getting to know more about what Vamstar is doing and how we could help you with procurement challenges – both as a buyer and supplier – you can book a demonstration with our expert team.

MTF2023 | MedTech | Buyers | Suppliers | Sustainability | Supply Chain Disruptions | Artificial Intelligence | Medicine | Value-Based Procurement | Clinical Evidence | Europe