Cost pressures hit Irish
medical tech sector


22 May 2006

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Competitive pressures such as mounting non-pay costs and the need to remove regulatory constraints on beneficial research and development (R&D) and innovation are the key issues facing Ireland’s medical device technology sector, the annual conference of IBEC’s Irish Medical Devices Association (IMDA) heard.

The director of the Centre for Devices and Radiological Health at the US Food and Drugs Administration Dr Dan Schultz told attendees: “It is important to minimise avoidable constraints on beneficial innovation. It is important for the regulators to communicate the risk-benefit of medical technology products.”

The conference was attended by more than 200 medical device technology product manufacturers based in Ireland to keep abreast of EU and US regulations. They heard that although the medical device and diagnostics industry is currently among the strongest sectors of the Irish economy, companies are under relentless pressure to ensure that a steady pipeline of new viable products come on stream to replace existing product lines.

Schultz’s comments were welcomed by Sharon Higgins of IMDA. She said: “There are over 26,000 people directly employed in the manufacture of medical technology products in Ireland today. Some 90pc of our products are exported overseas. In a world where ‘first to market is king’, the challenge for Europe and Ireland is to develop safe and beneficial medical device and diagnostic products ahead of the competition.

“The products that will be manufactured in five years time are in most cases still a mere pipe dream,” Higgins added.

Higgins said that it is paramount that legislation safeguards patient safety and public health. However, it is equally important for the continued development of Ireland’s vibrant medical technology sector to eliminate unnecessary controls, administrative work or delays in putting new products on the market.

“Effective regulation can and should boost economic prosperity through developing a competitive marketplace and an efficient, cost-effective healthcare sector. Without this we risk undermining our ability to compete globally.

“Ever-rising costs that are seriously undermining the industry’s ability to sell its goods overseas. While the last year has seen new products being developed in Ireland we also had the closures by Hospira, Cambridge Diagnostics and BSN Medical because of the high cost of doing business in Ireland.

“Ireland’s manufacturing companies must compete at the high end by introducing R&D, marketing and other added-value services but vitally we must control costs to business currently rising at unsustainable levels,” Higgins added.

Higgins said that total non-pay costs rose by an average of 7.9pc in 2004 and by 8.1pc in 2005. “This represents a cumulative increase of 16.7pc over the two-year period as against a cumulative inflation rate over the same period of 4.8pc to 2.2pc in 2004 and 2.5pc in 2005.”

By John Kennedy