We identified various barriers that make it challenging to launch a product on a specific market. We address these barriers and contribute with help in multiple forms.

Roadmap for market entry

Market entry barriers

It isn’t easy 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) without the necessary knowledge and market insight to enter the healthcare industry.

We evaluated various barriers to entry for the Scandinavian and German healthcare market for innovative products. The evaluation covered reasons, challenges and entry barriers, 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.

Measures to overcome this barrier

  • Get an overview of funding possibilities
  • Registration at economic development associations
  • Membership in cluster organisations
  • Membership in networks
  • Participation in webinars

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” 

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. 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. Over 95 pct. of Danish production is exported.

Healthcare in Denmark is provided by the five regions’ local governments, with coordination and regulation by the central government. At the same time, 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.

Electronic health records are 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. At 43% of total healthcare spending, spending on hospital facilities is above the average for OECD countries, even though the number of beds has decreased considerably.

 Links

Germany as the target market

Compared with the economy as a whole, the healthcare industry is showing above-average growth rates. At 4.1 per cent 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 per cent of gross domestic product. The industry contributes to achieving key economic policy objectives and influences them in terms of adequate and steady economic growth and high employment levels.

Medium-sized companies dominate the MedTech sector in Germany. 93 per cent 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”.

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 per cent. Medium-sized companies dominate the MedTech sector. BVMed – Branchenbericht Medizintechnologien 2020”.

 Webinars

Structure of the healthcare system

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

The German and the Danish healthcare system are notably different for two essential characteristics:
  • The sharing of decision-making powers between states, the federal government and self-regulated organisations of payers and providers; and
  • 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 influence the German market, whereas they play a minor role in the Danish market. However, 2,9 million Danes have additional private health insurance, “cepos“.

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

Further, is Denmark an international front-runner in digitalization of the healthcare sector and predecessor for digitalization in Europe and the world “Healthcare Denmark”.

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 secondary care, and the 98 municipalities are responsible for 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.

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”.
Webinar on the German healthcare system ,
The link provides insights into the German healthcare market in the form of a video, based on a recording of the network WelfareTech at an event in March 2019.

Measures to overcome this barrier

  • 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)

MDR / National regulations

The Medical Device Regulation (MDR), European Regulation for Medical Devices, and 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 through 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,”. 

Measures to overcome this barrier 

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

The notified bodies’ capacity (NB) is significantly decreased under the MDR compared to earlier under the directives. The so-far Danish notified body, Presafe, is not certified for the MDR, which means that the lack of an NB is further increased in Denmark.
In December 2020, TÜV SÜD emerged as the winner of a tender and will overtake NB in Denmark.

At the national level, the adaptation of national law to MDR 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 MDR entry into force so that the previous national medical device law will be retained until May 2021. The entry into force of the MPEUAnpG will essentially be postponed until 26 May 2021. J. Franze, “Pharmazeutische Zeitung – Neue Haendlerpflichten fuer die Apotheken”.

Language

It can be difficult to enter the market since 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 cannot 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 the EU and includes 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

With our roadmap to market we provide translated material and a lot of helpful links in multiple languages.

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 English and there are some German websites with valuable information on this topic.
Links