ACCESS Roadmap for market entry

Access Roadmap Do you have any trouble with the MDR or with national regulations? Do you know the differences between the Danish and the German healthcare sector? Do you have challenges with communication due to the language? Do you need funding for your product to be a success? Are you looking for information regarding the market entry?
Access – Roadmap (developed by the Access & Acceleration WP-6 Team)

Market entry barriers

It is notoriously difficult to access the Danish and German markets for healthcare products with new technological solutions. It is especially hard for small and medium-sized enterprises (SMEs) that do not possess the necessary knowledge and market insight to enter the healthcare industry. Being a part of an ecosystem that knows the healthcare sectors and has clear market access strategies supported by relevant partners, services, tools and methods, will be very valuable for Danish and German companies.

Our project evaluated various barriers to entry for the Scandinavian and German healthcare market for innovative products. The evaluation covered reasons, challenges and entry barriers related to entering the Scandinavian and the German market, market trends, target groups, sales channels and cooperation with users and buyers.

We identified the common barriers to market access, and developed strategies for overcoming these barriers. Interviews, workshops and an online survey with relevant stakeholders served to identify market access barriers. Companies, consultants and researchers from Denmark and Germany participated in these activities.

Target market

The Danish medical industry in numbers: About 250 companies in Denmark work dedicatedly with the various branches of the medical industry. But in total, just over 1,000 companies are to a greater or lesser degree employed in the medical field. The 20 largest companies account for approx. 75 pct. of revenue 2/3 of the companies in the industry have less than 50 employees. The Danish market for medical devices accounts for 0.5% of the global market. Expenditure on medical equipment amounts to approx. 5 pct. of the total public expenditure on our healthcare system “Espicom” [Online]. Available: Link.

The public health service via the five regions is the largest buyer of the industry’s products. Other customers are municipalities (e.g. in connection with care and rehabilitation), private hospitals or private citizens. The export market in 2014, the USA was Denmark’s largest export market for medical equipment with 25% of exports. This was followed by Germany (15%), Sweden (6%), Japan (4%) and China (4%). “Espicom” [Online]. Available: Link. Over 95 pct. of Danish production is exported.

Germany as target market: Compared with the economy as a whole, the healthcare industry is showing above-average growth rates. At 4.1 percent per year, it has grown faster than the German economy as a whole over the past ten years. The German healthcare industry employs 7.6 million people and generates almost 370 billion euros. This corresponds to a share of 12.1 percent of gross domestic product. The industry makes a significant contribution to achieving key economic policy objectives and influences them in terms of adequate and steady economic growth and high employment levels.

The medtech sector in Germany is dominated by medium-sized companies. 93 percent of medtech companies employ fewer than 250 people. There are 13,000 micro-enterprises alone with around 60,000 employees. Only 90 medtech companies in Germany have more than 250 employees. The medtech industry is innovative and has very short product cycles. German medical technology manufacturers generate about one third of their turnover with products that are not older than 3 years. “BVMed – Branchenbericht Medizintechnologien 2020,” [Online]. Available: Link

Healthcare in Denmark is provided by the local governments of the five regions, with coordination and regulation by central government, while nursing homes, home care, and school health services are the responsibility of the 98 municipalities.

Danish government healthcare expenditures amount to approximately 10.4% of the GDP, of which around 84% is funded from regional and municipal taxation redistributed by the central government. Because necessary healthcare is taxpayer-funded, personal expenses are minimal and usually associated with co-payments for certain services. Those expenses are usually covered by private health insurance.

Use of electronic health records is widespread, and efforts are underway to integrate these at the regional level. For every 1,000 people in Denmark, there are about 3.4 doctors and 2.5 hospital beds. Spending on hospital facilities, at 43% of total health care spending, is above the average for OECD countries, even though the number of beds has decreased considerably.

Measures to overcome this barrier – further information can be found in the boxes on the right side

  • Get overview of funding programs
  • Registration at economic development associations
  • Membership in Cluster Organisations
  • Membership in Networks
  • Participation in Webinars

The medtech industry is an important economic and labour market factor. The industry employs a total of over 215,000 people in Germany.

Over 12,000 new jobs have been created in the last 5 years alone. Each job in the industry also secures 0.75 jobs in other sectors. The total turnover of the MedTech sector in 2019 was 33.4 billion euros. The export ratio is around 65 percent. The medtech sector is dominated by medium-sized companies. “BVMed – Branchenbericht Medizintechnologien 2020,” [Online]. Available: Link

Measures to overcome this barrier – further information can be found in the boxes on the right side

  • Get overview of funding programs
  • Registration at economic development associations
  • Membership in Cluster Organisations
  • Membership in Networks
  • Participation in Webinars

MDR / National regulations

The Medical Device Regulation (MDR), European Regulation for Medical Devices, together with the Regulation for In Vitro Diagnostics (IVDR) officially came into force on May 25, 2017. After a four-year transition period, the MDR is mandatory as of May 26, 2021. Initially, the entry into force of MDR was planned for 26 May 2020.

However, the European Parliament and the Council decided by means of a regulation to postpone the date of application by one year (Regulation (EU) 2020/561 of the European Parliament and of the Council amending Regulation (EU) 2017/745 concerning medical devices as regards the date of application of some of its provisions, 23 April 2020). This was a response to the tight situation on the medical devices market due to the lack of notified bodies, the challenges of the Covid 19 crisis and the threat of supply shortages. “European Commission – MDR Timelines,” [Online]. Available: Link

The capacity of the notified bodies (NB) is significantly decreased under the MDR compare to earlier under the directives. The so far Danish notified body, Presafe, is not certified for the MDR, which means that the lack of NB is further increased in Denmark.

In December 2020 TÜV SÜD was emerged as the winner of the Ministry of Industry, Business and Financial Affairs’ tender of 14.7 million.

Measures to overcome this barrier – further information can be found in the boxes on the right side

  • Foundation of a special department
  • Hiring specialists for the company
  • Knowledge exchange through networking
  • Hiring an external service provider

At national level, the adaptation of national law to MDR also began in October 2019 with the Medical Devices EU Adaptation Act (MPEUAnpG).

In particular, the still current German Medical Devices Act is being adapted to the MDR and the opening clauses opened by the MDR are being regulated in more detail. This is followed by the revision of the Medical Devices Tax Ordinance, the Medical Device Operator Ordinance and other ordinances by the Federal Ministry of Health (BMG) in the context of the conversion to MDR.

In doing so, the German legislator is also taking into account the postponement of the entry into force of the MDR, so that the previous national medical device law will be retained until May 2021 and the entry into force of the MPEUAnpG will essentially be postponed until 26 May 2021. J. Franze, “Pharmazeutische Zeitung – Neue Haendlerpflichten fuer die Apotheken,” [Online]. Available: Link

Measures to overcome this barrier – further information can be found in the boxes on the right side

  • Foundation of a special department
  • Hiring specialists for the company
  • Knowledge exchange through networking
  • Hiring an external service provider

Structure of the healthcare system

German hospitals can be compared to a profit centre, whereas in Denmark it is more a social institution. Germany has over 200 health insurances compared to only one in Denmark.

The German and the Danish healthcare system are notable different for two essential characteristics:
  • 1) The sharing of decision-making powers between states, the federal government and self-regulated organisations of payers and providers; and
  • 2) The separation of Public/Statutory Health Insurance (SHI) (including the social LTCI) and Private Health Insurance (PHI)(including the private LTCI).

SHI and PHI use the same providers. Hospitals and physicians treat both statutorily and privately insured patients, unlike hospitals in many other countries. Private insurances have some influence on the German market, whereas they play a minor role in the Danish market.

Especially the insurance differences can lead to differency in the treatment. The danish primary sector is focused on the rehabilitation and preventive treatment, as well as home treatment and telemedicine, since this is more cost-effective than admission of the patient. In Germany the focus on prevention is less because these products are not on the Hilfsmittelverzeichnis list, and therefor will the prevention treatment not be cowered by the insurance to the same extent.

Further, is the Denmark an international front-runner digitalization of the healthcare sector in Denmark more developed and predecessors for the digitalization in Europe and the rest of the world. Healthcare Denmark,” [Online]. Available: Link

Denmark has a decentralized health system where the national government provides block grants from tax revenues to the regions and municipalities, which deliver health services.

The 5 Regions are responsible for the secondary care and the 67 municipalities are responsible for the primary care. All residents are entitled to publicly financed care, including largely free primary, specialist, hospital, mental health, preventive, and long-term care services.

At all levels in the health system Information technology (IT) is used and part of a national strategy supported by the National Agency for Health IT.

All citizens in Denmark have a unique electronic personal identifier, appearing in all public registries, including health databases and electronic medical card. Danish general practitioners were ranked first in an assessment of the overall implementation of electronic health records in 2014.

Measures to overcome this barrier – further information can be found in the boxes on the right side

  • Access to potential customers (doctors, pharmacies…) – fairs, events…
  • Access to innovation department on the university hospitals
  • Knowledge about and access to the tender process
  • Employment / commissioning of an expert of the tender process
  • Access and registration at international cooperation exchanges for partner search (databases, programs)

In Germany, the principle of self-administration applies: Although the state sets the legal framework and tasks, the insured and contributors as well as the service providers organize themselves in associations that are responsible for providing medical care to the population.

The state holds most university hospitals, while municipalities play a role in public health activities and hold about half of all hospital beds. Patients health insurance covers costs that are directly associated with the treatment in the hospital. The federal state in which the hospital is located finances so-called ‘investment costs’ such as diagnostic machinery, ambulance vehicles, and building maintenance.

The German health care system is supported and self-managed by many institutions and actors. The core area, also known as the first healthcare market, comprises the area of “classic” health care, which is largely financed by statutory health insurance (SHI) and private health insurance (PHI) including nursing care insurance. All privately financed products and services related to health are referred to as the second healthcare market. BMG, “Bundesgesundheitsministerium – Gesundheitswirtschaft im Überblick,” [Online]. Available: Link

Measures to overcome this barrier – further information can be found in the boxes on the right side

  • Access to the “Hilfsmittelverzeichnis” (HMV)
  • Access to potential customers (doctors, pharmacies…) – fairs, events…
  • Knowledge about and access to the tender process
  • Employment / commissioning of an expert of the tender process
  • Access and registration at international cooperation exchanges for partner search (databases, programs)

Language

It can be difficult to enter the market due to the fact that each country has its own legislation on medical devices. This concerns finding the national legislation on the website of the health authority in the target country. The national legislation is often stored in the national language and could not be found in English.

For some products sold on the Scandinavian / German market, labels in the local language are a requirement that is applicable in EU and include the instructions of use. Another example of language as a barrier is the difficulty in finding important information on, e.g. national healthcare structure on the webpages of the health authorities. These pages are often not written in English but only in the national language.

Regarding a report from ELAN, recruiting native speakers with language skills appears to be widely used as a language management technique, with 22% of businesses drawing on this resource. (page 5) ELAN: Effects on the European Economy of Shortages of Foreign Language Skills in Enterprise

Measures to overcome this barrier:

  • Commissioning of translation agencies
  • Commissioning a native speaker
  • Native speaking employees

HMV: The application for inclusion of a product in the HMV as well as the supporting documents must be submitted in writing and in German. The aid must also be provided with the necessary information in German for proper and safe handling.

Reimbursement: There are numerous publications on the reimbursement of medical devices and drugs in Germany in English and there are some German websites with valuable information on this topic.

MDR – Article 41 Language requirements: All documents required pursuant to Articles 38 and 39 shall be drawn up in a language or languages which shall be determined by the Member State concerned. Member States, in applying the first paragraph, shall consider accepting and using a commonly understood language in the medical field, for all or part of the documentation concerned.

Measures to overcome this barrier:

  • Commissioning of translation agencies
  • Commissioning a native speaker
  • Native speaking employees

Funding of international activities

The European Union supports companies and research institutions with a variety of funding programs and financing instruments. In addition to research and development projects, the EU also funds projects in the area of opening up new markets.

On the website of the European Commission specifically on financing and tendering, companies can find a wide range of information about the tendering process and opportunities for doing business with the European Commission.

Denmark is among the world’s leading countries within innovation, especially concerning international partnership collaborations, high quality research outputs and networks at an international level, innovative-friendly environments and finance, according to European Innovation Scoreboard 2020.

The fundamental elements to achieve a high-level innovation performance comprises a balanced innovation system that is built from highly educated labour and public-private collaborations. However, one of the main parts of the innovation strategy is to ensure funding, which is done through funding programs. Funding of international activities related to Danish healthcare.

Measures to overcome this barrier – further information can be found in the boxes on the right side

  • Get overview of funding programs
  • Registration at economic development associations
  • Membership in Cluster Organisations
  • Membership in Networks
  • Participation in Webinars

The federal government has launched the Export Initiative for the German Healthcare Market, which is supported by Germany Trade & Invest for funding companies.

At the state level, there are economic development agencies for supporting investment projects of foreign or domestic investors in the region. Every federal state in Germany has its own economic promotion agency.

In addition, there are other opportunities for companies to obtain financing from organizations, associations and networks.

Measures to overcome this barrier – further information can be found in the boxes on the right side

  • Get overview of funding programs
  • Registration at economic development associations
  • Membership in Cluster Organisations
  • Membership in Networks
  • Participation in Webinars