With high demands, exacting standards and tough legislation, supplying polymeric products to the medical industry can be difficult – but if you get it right the rewards are there to be had. Dr Matthew Thornton from the Polymer Sector of the Materials KTN summarises some of the work the network has done to help companies access this potentially lucrative market sector.
Taking the decision to move a business into the healthcare market can be a tough one, as the industry’s requirements are extremely high and the legislative burden can seem overwhelming. You also have to be willing to commit for the long term – contracts can last for 20 years if you are able to guarantee supply at high quality. However, according to Materials KTN Technology Expert Dr Sally Beken, ‘If you are already in the polymer industry there is no reason, other than money and resources, why you couldn’t supply the medical sector. And the reason for wishing to do so is simple – profit.’
To help companies wanting to make the move, the Polymer Sector has produced two reports, available online from the Materials KTN reports library, providing advice and information to help companies make the jump. The reports, Polymeric Coatings for In Vitro Healthcare and Medical Devices and Supplying Polymer Based Products to the Medical Industry – a How-to Guide for SMEs, give an overview of the industry as well as more specific information relating solely to polymeric coatings for in vitro applications.
Healthcare items range from basic infrastructure, such as door handles or medical gowns, to the more technical, such as monitoring equipment. Medical devices also range from simple to complex, from bedpans to programmable pacemakers and laser surgical devices. Add to that another category of medical devices, in vitro diagnostic products such as lab equipment and test kits, and you start to see how diverse this sector is. The scope for involvement is huge.
In terms of finance, major device companies do not typically invest heavily in internal, early-stage research and development. Instead they tend to grow their product portfolio by licensing and acquiring so-called near market opportunities, so while financial help is still there if you can provide a useful product, device ideas tend to be created by individual clinicians or academics. A successful minority of these innovations are then developed through small companies, which later license or sell their products to be marketed by larger conglomerates.
According to US consultants MarketsandMarkets, the device sector is expected to grow by 14% from 2009–2014 and was already worth US$265bln in 2006. With the USA having an ageing population similar to the UK, the value is only going to keep on growing and similar trends have been predicted for the European market. As well as growth, there is also a move towards the outsourcing of third parties, which can help medical companies reduce product development costs by as much as 10–30%, as estimated in the report for SMEs. With such high growth and the trend towards outsourcing, there is a clear opening for new companies to establish themselves in the area.
High growth does not always translate into stability, but with longer life expectancies and increasing demand from China, India and South America, the healthcare technology market is a much more stable sector than, for example, aerospace or automotive. Another benefit is that a product used in the UK can usually also be sold worldwide, so it is a genuinely global market. Finally there is the area’s diversity – there is a need for both high-volume, low-price consumables and lower volume niche or value-added products.
Tips and tricks
While healthcare represents a great opportunity, there are still some considerations to be made. The standards required to make medical products are more stringent than in other fields and, as well as investing in new equipment, companies may also need to invest in new staff to deal with legislative issues.
Moving into the medical sector should be a strategic management decision as the mindset required is different to, for example, moulding automotive parts. Changing approach extends to building contacts and companies will need to be proactive – going to medical shows, calling medical device manufacturers, taking part in medical seminars and working with design agencies, as all of these can be a good introduction to medical companies.
Despite the need for time and effort, moving into the medical sector does not have to be at the expense of other business – indeed many companies incorporate it alongside their existing work. And don’t be put off by the prospect of high standards and copious legislation, as the medical and healthcare sector is a stable and growing marketplace that uses precisely the skills that UK SMEs possess. There are opportunities to develop innovative and customised solutions – opportunities not just for survival but for innovation and growth.
Why are companies choosing the medical market?
- Some businesses are being forced to diversify due to lack of growth opportunities in their current sector.
- Others are being more proactive as they see an opportunity for new business and the promise of increased profits, often offering new products or services that have no technological or commercial likeness with the organisation’s current range.
- Changing position in the value chain is another reason to make the move. This could mean going from manufacturing already specifi ed components to offering bespoke engineering services – or perhaps even full design, development and manufacturing of systems.
- As well as the opportunity to move up the value chain, the healthcare market can allow companies to provide their products and services into a new market, particularly when it comes to supplying basic infrastructure.
To read the latest polymer news and reports, join the Materials KTN free of charge at www.materialsktn.net and click on ‘Polymers’. To keep in touch with ongoing work in this area, join the Polymers Group or email email@example.com or firstname.lastname@example.org
Follow the Materials KTN Polymer Sector on Twitter: @MatKTN_Polymers
You will need to be a Materials KTN member to download the reports mentioned in this feature, but membership is free of charge. Polymeric Coatings for In Vitro Healthcare and Medical Devices and Supplying Polymer Based Products to the Medical Industry – a How-to Guide for SMEs are both available from the Materials KTN reports library at www.materialsktn.net or directly from http://bit.ly/MedicalReports