The European Hospital Purchasing Landscape
Selling Medical Devices In European hospitals
As a manufacturer and distributor in the medical device industry, you will no doubt be considering the European market as an important potential sales target.
That said, how should you approach the complex purchasing landscape in Europe? How can you best sell your products to medical professionals that may feel intimidated by the wide variety of technologies currently available on the market?
The following article explores these questions, with practical advice for finding success in the European hospital purchasing landscape.
At GrowthMedics we have assisted worldwide medical device manufacturers with expanding their presence in the European healthcare market through distributors and direct into European hospitals and clinics. If you are looking to expand, feel free to book a meeting with us here or firstname.lastname@example.org.
How Are Hospitals In Europe Funded?
Hospitals in the EU are largely funded by government sources or statutory insurance.
In terms of public health facilities, there are two main funding sources:
- Insurance companies
- Government budgets
In terms of private health facilities, there are three main funding sources:
● Private health insurance
● Private healthcare
● Non-profit networks and charities
European hospital statistics
On average healthcare represents 10% of GDP in European countries and about a third of their expenditure. There is a light trend towards centralizing hospitals and increasing beds over building new hospitals. The number of European hospital beds will continue to grow over the next years. The EU is ageing offering long-term opportunities for medical device companies and healthcare providers. Figures show currently an average of 20% is 65+ years of age which will increase to 31.3% of the EU population in the next 30-50 years.
► There are currently 24,200 hospitals in Europe. Forecast shows 24,217 hospitals in 2025.
► Hospital bed count forecast in Europe shows substantial growth from 2.4 million hospitals in 2018 to a forecasted 4.596 mln beds by 2025
► European hospital bed density in Europe is average 5.49 beds per 1,000 people
► Germany has the most private owned hospital beds and Hungary the most public hospital beds
► Germany, Austria, Hungary, Czech Republic and Poland have the most hospital beds per person while Italy, Spain, Ireland and the UK the least
► The biggest hospital revenues come from Germany hospital groups: Fresenius Helios, Rhoen-Klinken, Asklepios, Sana Kliniken, Capio (Nordics) and Gruppo San Donato (Italy)
Tendering processes in European hospitals
The EU follows a national tendering process when it comes to high-ticket contracts. This acts as the main purchasing platform for equipment, meaning that hospitals are required to follow a tendering process before placing an order.
When it comes to the UK, the NHS tendering process is vast and can be confusing for first timers. According to stipulations, contracts with thresholds lower than the Official Journal of the European Union (OJEU) are allowed to be quoted directly.
However, if the contract value exceeds or even matches the OJEU threshold, it can only be procured through tendering.
To find out more about who can use the NHS framework, you can take a look here.
Typically, service and supply contracts follow a threshold of €428,000 according to Directive 2009/81/EC. Though this may vary in some cases, it’s best to look up specific guidelines for each country.
The tendering process provides hospitals with the opportunity to compare models and pricing before an order is placed. There are several tender options:
● Open procedures
● Restricted procedures
● Competitive negotiated procedures
● Competitive dialogue
● Design contests
After that, suppliers must provide detailed information on financial history, creditworthiness, and management experience.
Tender thresholds vary according to a few rules. For a more detailed procurement threshold guide, you can take a look at this link.
Selling Equipment To EU Hospitals As A Non-Native Manufacturer
There are many guidelines that you need to follow when it comes to selling medical devices to EU hospitals.
Below, we’ll answer a few of the most common questions to clear your mind:
How Important Is It To Have A Local Distributor In The Country You Plan To Sell Your Hospital Equipment To?
If you want to start selling medical equipment to a specific country, you’ll need in most cases, a distributor that is based in that country. Having a local partner will help you to gain more information about the hospital, while also making it easier for you to access the hospital.
Since healthcare suppliers in Europe are so numerous, it can be difficult for hospitals to figure out who they should contact. Having a local distributor minimizes these difficulties while making it easier for hospitals to trust you.
Do You Need A Local Partner To Sell To Hospitals In The EU?
Regardless of whether you are selling to hospitals in the United Kingdom, the European Union, or anywhere in Europe in between, you will want to make sure that you have a local partner.
Many hospitals also have service requirements in their tender, a local distributor can help you fulfill this requirement.
Some countries even require that you comply with domestic regulations before you can supply to their hospitals. (Note to client: page 12, chapter 7, i)
Choosing The Right Markets: Which Are The Best Markets To Sell Your Equipment To?
Depending on your country of choice, you may want to sell your medical devices to either public or private hospitals. In general, public hospitals tend to have a larger budget because they receive a considerable amount of public funding. You should focus your time and effort on these hospitals.
When it comes to hospitals in Europe, you’ll need to spend some time researching the different markets and comparing their advantages and disadvantages.
In 2018 there were 2.4 million hospital beds available in Europe with an average of 6.4 days length of stay across 24 318 hospitals. Russia (>5000) leads Europe with the number of hospitals followed by Germany and France (~3000), France, UK, Turkey, Italy, Ukraine and Poland. This report will give you a detailed overview. You can also check out this hospital comparison report.
In conclusion, selling medical equipment to hospitals in Europe can be fairly straightforward, provided you educate yourself about its various requirements. Selling direct to hospitals will initially be most successful when working with local distribution partners that can carry stock, provide service, has the local contacts and speaks the local languages or with your own boots on the ground team and infrastructure. You can follow all tenders yourself directly on this platform.
Hopefully, this article has provided you with some helpful information about the current purchasing landscape, as well as some practical advice on how to approach this complex process.
Your Medical Device Global Expansion Partner
Our mission is to help our clients achieve their international growth objectives in medical markets. Feel free to reach out to us for more information and guidance on how to approach the European medical device tender market.