Where are we headed in the medical industry with all the medical device regulations in place? For a number of years, medical device sales experienced a rise in sales, productivity, manufacture and ultimately revenue but recent government regulations, reduced government funding, and changes in the physician purchasing processes have dampened revenue growth somewhat for those in the medical device sales industry in the UK.
The causes of this reduction in profit margin are caused by the changes in health care decision making, and increased government regulations. For instance, where once it was the physician making the purchasing decision, now centralized procurement departments have taken over. The situation is made even more complicated by increased government inspections and device regulations placed on the industry.
The Health Technology Assessment Agency (HTA), the National Institute for Clinical Evidence (NICE) and the National Health Service (NHS) have all imposed regulations on the procurement of medical devices, with the intentions of offering higher quality standards for drugs, treatments and procedures. Unfortunately, meeting these added regulations can also often make it extremely difficult for device manufacturers to offer new or improved devices to the market.
Besides these difficulties, the industry also faces a lack of government funding caused by the cost of caring for an aging populations, financial deficits and economic crisis. This implies a slower repayment by medical field clients and tighter, more restrictive medical procurement budgets.
Understandably, the aim of the increased government regulations is to keep the new products entering the market safer, thereby protecting the consumer's health care safe, but at times these regulations are becoming too restrictive. The consequences are a lag in the development process with more production, investigative and marketing expenses, causing products to take longer to get to the market.
These regulations are also straining otherwise close relationships between device companies and physicians. There is a greater scrutiny of government entities and industry leaders into these relationships and new regulations require extensive reporting and disclosure when it comes to company healthcare interaction. Ultimately, this makes the procurement process uncomfortable and unpleasant for both doctors, procurement departments and even for the manufacturer or vendor.
To compensate for these negative effects in the medical device sales market, manufacturers must focus on clinical efficiencies, productivity and attractive prices. The trend is also causing manufacturers to consider production costs and entry of a certain medical device into the UK market, which ultimately may cause health care deficits in other areas.