HEALTH CARE MARKET HEALTH CARE MARKET

presented by

Veronika Novakova HC Team Europe Liaison &

Commercial Specialist, Prague, Czech Republic

AACC Washington, July 2008

EUROPEEUROPE

• 27 EU members• Candidate

Countries:Croatia TurkeyMacedonia

• Other countries: SwitzerlandNorway, etc.

• http://europa.eu

WHAT IS EUROPE?WHAT IS EUROPE?

MARKET SIZEMARKET SIZE

• Population: EU27 – 495 mln. inhabitants (+ Candidate countries + Norway, Switzerland, Ukraine, etc.) versus USA - 304 mln. inhabitants, Europe market is about twice the size

• Economic output (GDP): EU27 – EUR10,957 bln. versus USA – EUR10,012 bln.

• HC market: Market no. 2 after US, Japan is third

• Europe: EU Single Market x Regional Approach: Western Europe, Central Europe, Eastern Europe, non-EU countries & former Soviet Union countries

EU LEGISLATIONEU LEGISLATION

• EU does not have FDA the European Commission works in cooperation with member state health authorities• CE Mark

• Medical devices regulated under three directives:1. The Medical Devices Directive (MDD) – all general medical devices not covered by the other two directives.2. Active Implantable Medical Devices (AIMD) - all active devices and related accessories intended to be permanently implanted in humans. 3. In Vitro Diagnostic Devices (IVDD) - all devices and kits used away from the patient to make diagnosis.

• Competitive market with a good potential for innovative and state of art technologies

• Top three markets: 1. Germany - no. 3 in the world, 6.9% of the world market ($12.9 bln.); 2. France ($7.14 bln.); 3. UK – high price market ($4.9 bln.)

• Western Europe X Central & Eastern Europe

MEDICAL DEVICEMEDICAL DEVICE

Medical Equipment Category 2007 2008

Medical Supplies $437.8 $453.1

Medical X-ray Film $104.2 $107.9

Surgical Gloves $57.3 $59.3

Medical & Surgical Sterilizers $26.1 $27

Wheelchairs $46.9 $48.5

Contact Lenses $125.1 $129.5

Medical Equipment $2,584.9 $2,675.4

Electro-medical Equipment $594.1 $614.9

Syringes, Needles & Catheters $656.7 $679.6

MARKET STATISTICS IMARKET STATISTICS I

EU Projected Medical Equipment Market in 2007-8 (in $, mln.)

Medical Equipment Category 2007 2008

Dental Instruments & Appliances $125.1 $129.5

Ophthalmic Instruments & Appliances $83.4 $86.3

Other Medical & Surgical Instruments $1,120.5 $1,159.7

Therapy Apparatus $229.3 $237.3

Orthopaedic & Prosthetic Appliances $995.4 $1,030.2

Medical X-ray, Alpha, Beta, Gamma Ray Eq. $531.6 $550.2

Medical Furniture $78.2 $80.9

Total $5,211.5 $5,393.9

EU Projected Medical Equipment Market in 2007-8 (in $, mln.)

MARKET STATISTICS IIMARKET STATISTICS II

Source: EpiscomBus Intelligence – 01 June 2005 (taken from Austrade PPP)

• The Federation of the European Dental Industry (FIDE) - www.fide-online.org regulatory issues

• Number of dentists: problem in some CEE

• Estimated Market size: $129.5 mln.

• Best prospects: cosmetic dentistry, innovative products and equipment

DENTAL EQUIPMENTDENTAL EQUIPMENT

• The 12 states in CEE are an overall market of EUR11.8 bln., less than 10% of the total pharmaceutical market of EU-15 (EUR162.2 bln.); CEE growth 6% x EU15 2-3%

• Regulated market: balancing expenditures and patient health & treatment accessibility

• Reference pricing: used in many European countries transparency issues (EU Transparency Directive)

• Increasing level of private expenditures especially in Eastern Europe OTC drugs, supermarket sales on rise

• Europe 30% of world market x NA 47%

PHARMACEUTICALSPHARMACEUTICALS

GENERICSGENERICS

Source: EGA internal survey 2005

SUPPLEMENTSSUPPLEMENTS

• Highly competitive market: rise in custom duties for supplements from US after EU entry for new members

• European Union Food Directive: challenged at the EU court, went into effect in August 2005; Annex of Directive 2002/46/EC and its 2006 Amendment (2006/37/EC) list all vitamins & minerals allowed on the EU market http://ec.europa.eu/food/food/labellingnutrition/supplements/index_en.htm

• Trends: CEE: self-medication (young generation), informed customers, spending power on rise, growth in supplements popularity, demand for consultation services

• IVD Expenditures out of THE (2006): EU 15 - 0.9% (i.e. €21.3 per capita), New EU states - of 1.5% (i.e. €6.2 per capita) X US -1.1% (i.e. €36.7 per capita) • EDMA: European organization for national associations of the in vitro diagnostics industry www.edma-ivd.be

IN VITRO DIAGNOSTICSIN VITRO DIAGNOSTICS

• Growth of the market: expected at around 7%; new EU countries offer good potential as their private sector expands• Opportunities: national e-Health initiatives - Germany's Health Smartcard, the English NHS's National Program for Information Technology • The European Commission's e-Health initiative – voices for single EU harmonized systems

HEALTH CARE ITHEALTH CARE IT

• Product Registration: all the products have to be registered to sell in Europe –sometimes lengthy process

• Reimbursement: challenging problem especially in pharmaceutical sector - calls for transparency

• Late payments: especially in case of hospitals, in some cases delay in payment may be over 1 year (challenge for distributor)

MARKET CHALLENGESMARKET CHALLENGES

• World’s second largest market • Demand for innovative US technologies – US products considered high quality backed by extensive research • EU Tender databasewww.buyusa.gov/europeanunion/tender_search.html • Financing

US Trade and Development Agency (TDA) - www.ustda.gov

US AID – www.usaid.gov

EU Funds - http://www.buyusa.gov/europeanunion/eu_funds.html

OPPORTUNITIESOPPORTUNITIES

Ms. Veronika NovakovaMs. Veronika Novakova

Commercial Specialist

US Commercial Service, US Embassy

Trziste 15, 118 01 Praha 1, Czech Republic

Phone: +420 257 022 437, Fax: +420 257 022 810

E-mail: Veronika.Novakova@mail.doc.gov

www.buyusa.gov/czechrepublic

www.buyusa.gov/europe

CONTACTSCONTACTS