Transnational trade in healthcare


Transnational trade in healthcare overview

That the healthcare sector is important to trade within the European Union is without doubt. FTI Consulting (2016) states that the sector drives a significant percentage of trade inside and outside the EU market, and that healthcare consumes, on average, 10% of national budgets across the EU, making it a huge market sector that provides a wide range of opportunities for businesses of all sizes and across product specialisms.

It is argued that trade has a natural role in healthcare and that in addition to the wide range of products and services—including thousands of items of medical equipment and pharmaceuticals—that form the basis of much of this trade, there is increasing opportunity for an expansion of trade both spatially and in relation to technological innovation (Erixon et al, 2015).

European pharmaceutical sector

The European pharmaceutical sector is regarded as one of the EU's top performing high-technology sectors and had an estimated 361,500-million-euro value in exports in 2015 (EFPIA, 2016). 23% of the world's new medicines were launched in Europe between 2010 and 2015 and 31,500 million euro was invested in pharmaceutical R&D in 2015 (EFPIA, 2016).

SMEs are increasingly important in pharmaceutical innovation—SME applications for the marketing authorisation of new medicines comprise 10–15% of the overall number of applications to the European Medicines Agency (EMA), and more than one in two medicines developed by SMEs (recommended for marketing authorisation) in the past 10 years contained a new active substance. This shows that SMEs are an important source of medicines—42% of these medicines being orphan medicines for rare diseases—with 1,619 companies from across the EU being registered as SMEs with the EMA (EMA, 2016).

The medical-technology sector

Many businesses operate in the medical-technology sector, which incorporates sticking plasters to syringes, wheelchairs to hearing aids, blood-glucose monitoring devices to replacement joints, and everything in between.

Globally, there are some 500,000 medical-technology products and in Europe there are 26,000 med-tech companies of which 95% are SMEs and most of which employ less than 50 people, i.e. are small- and micro-sized companies (MedTech Europe, 2016). Around 10% of GDP in Europe is spent on healthcare and it is estimated that, of this figure, about 7.3% (or less than 1% of GDP) is spent on medical technologies, providing a market worth an estimated 115 billion euro in 2015—around 28% of the world market (MedTech Europe, 2016). Individual countries in Europe have different sized medical technology markets as shown below.

medical technology market by country

Of these medical technologies, there are some sectors that stand out as being the most market dominant, with in-vitro diagnostics, cardiology and diagnostic imaging being the largest. That said, there are still substantial opportunities in many other areas including orthopaedics, dentistry and endoscopy, as the graph below shows.

medical technology market by area

The digital-health sector

It is argued that the digital-health sector is still 'young'. In a recent eHealth Hub project survey of 300+ digital-health SMEs, 82% of EU start-ups reported revenues of under €100 K, with 39% of them being at the pre-revenue stage and most trade being of the B2B type—because it is also argued that the B2C trade is reliant on consumers being much more active in purchasing products for managing their own healthcare and this is not happening on a very large scale at the current time (Lardier, 2017).

See scheme with an overview of the findings: