The Nordic region is a potentially lucrative area for medical device companies to expand into, with analyst research estimating Sweden alone to have a 2.7% market share of the €140bn European medical device market. But practical challenges, in particular operational obstacles on the regulatory side, have deterred many manufacturers from making the leap into this geography. Bob Tiling, VP Global Sales at Kallik, explains how effectively managing the simple device label could be key to overcoming the challenges of entering the Nordic market.
Expansion into one or even several Nordic countries may seem like a minor leap to today’s large, multinational medical device manufacturers – but business leaders with an eye on new market growth should beware the pitfalls. These range from special logistics labels on products for each healthcare association through to large-scale downstream compliance challenges. Dedicated label and artwork management software solutions have made significant strides in bringing advanced digital capabilities to bear on many of these challenges – and could yet again bring peace of mind to those exploring a push into the Nordic medical device market.
Here are my three major considerations that medical device manufacturers should focus on when weighing up expansion into the Nordics – and how technology can help solve them:
High risk, high reward? Weigh the costs vs. benefits to your business
At first glance, expansion into the Nordic market may seem like a case of ‘high effort, low reward’ for many medical device companies. The entire Nordic medical device market, for example, is smaller than the German market alone, and the Nordic market is far from the largest by value, given the relatively small populations of each nation within the region.
Yet medical device margins are significantly higher in the region when compared to most European nations and indeed to countries beyond. Nordic countries have a very high standard of living and per capita wealth is equally strong, with effective healthcare systems and high-quality products used in treatment. Healthcare spending is also typically very high as a percentage of GDP.
Expanding into or setting up in the Nordic market ultimately represents a calculated risk for many medical device companies – do they replicate compliance tasks and increase the volume of labels and assets managed internally to sell into this market, or do they cut their losses and focus on large, more lucrative targets such as Germany and the UK?
If manufacturers conduct suitable research and can identify a strong appetite or market niche in the Nordics to position proven, fully compliant medical device ranges, there is a potentially rewarding opportunity. The short-term risk, therefore, may be comfortably worth the long-term reward – but only if manufacturers have suitable systems in place to comfortably handle country-specific labelling and artwork requirements that can be customised to effectively handle national nuances.
National nuances mean labelling is a nightmare – a wake-up call for digital management
One of the main challenges facing medical device companies looking to ‘crack’ the Nordic market is the scale of it. Spanning Denmark, Norway and Sweden, Finland and Iceland, the market is fraught with differing product preferences, healthcare system priorities and customer expectations. Each national healthcare authority is also far smaller than other European counterparts such as the NHS, and each has differing back-end processes such as those covering general management, documentation and reimbursement. Beyond this, Nordic regulation and labelling requirements also closely follow the same path as the majority of Europe – following EU directives as a core regulatory framework. This today includes the recently introduced MDR and IVDR, and formerly MDD.
As a result, medical devices sold to and used in these Nordic countries require extra labels and markings on product packaging. Some manufacturers, still conscious of their often- disruptive compliance efforts to satisfy MDR and IVDR deadlines, have opted to avoid the market for fear of replicating similar compliance burdens several times over. Again, by looking to digital alternatives to the more ‘traditional’ legacy methods of manual spreadsheets and disparate systems, this is far easier to get to grips with on a single easily managed platform.
M&A ambitions just add to the problems with onboarding challenges
Can you buy your way in? Can medical device companies looking to expand in the Nordic market instead aim to achieve this relatively pain-free through merger or acquisition? The answer is not so simple.
Manufacturers that take over existing Nordic medical device companies could face a burden similar to the scale of MDR or IVDR compliance projects – something we at Kallik have seen pose a major challenge to day-to-day operations of medical device companies of all sizes.
Significant increases in the number of assets that must be amended for rebranding product lines, newly discovered siloes of information and a scattered workforce could all threaten to make a typical acquisition into an unexpected time- and resource-consuming challenge. Add the usual M&A challenges of translating assets into multiple languages for the region, and without the right digital backbone this quickly becomes a non-starter.
Focus on digital maturity now to avoid new market ‘growing pains’
It is clear that expanding existing medical device operations into the Nordic market is far easier said than done, with downstream compliance challenges, asset management and multiple languages all obstacles to be overcome. Embracing end-to-end label and artwork management within a single digital system offers a lifeline to medical device manufacturers. It helps ease the onboarding burden by allowing companies to establish pre-set templates and layouts suitable for products being sold into each Nordic country, and bulk update existing assets for acquired product lines.
Most problems stem simply from an enforced need to manually create, update and manage labels and other product assets – a lesson industry as a whole learned during the MDR and IVDR compliance rush.
Digital alternatives offer far more than a ‘luxury’ alternative to this – they are increasingly the norm for manufacturers to weather the storm of emerging regulations, customer expectations around product traceability, and other unexpected industry disruption. Those that can deploy and maintain a truly mature digital environment for label and artwork management will be laying the groundwork to flourish in potentially lucrative markets such as the Nordics.