Non-European medical device companies face a number of challenges — and opportunities — when attempting to enter the European market. Addressing these issues early in the process helps avoid unnecessary and costly delays and ensures a greater chance for a successful transition. Part of the plan should include partnering with an established and experienced 3PL to act as a consultant in setting up the operation from a full supply chain perspective.
The following prioritizes and examines a few key elements of an efficient market access plan as they pertain to the European market.
Lay of the Land
Despite economic uncertainty in some areas, the overall outlook for the medtech industry in Europe is positive. A company that can keep one step ahead of the trends that are shaping the market has a distinct advantage. Increasingly sophisticated buyers are demanding higher value and lower prices, which, in turn, intensifies competition. These pressures, along with regulatory changes, the growing demand for high-end medtech products and fast-growing Asian markets, require companies to respond quickly and effectively. A company that becomes complacent is at risk of falling behind.
Choosing the best country in which to locate your business is key. Currently the Netherlands, Belgium and Germany are the most desirable destinations due to tax deferments, air and ocean ports, infrastructure, workforce availability, education, logistics knowledge and fiscal advantage. The Netherlands is, at present, the largest trading country in medtech in Europe.
While the infrastructure throughout Europe is not of consistent quality, it is still very efficient and modern. The EU is well connected through an extensive system of roads, highways, bridges, railways and international airports and seaports. Northern Europe in particular boasts sophisticated and plentiful roads and highly developed railways, while Southern Europe lags behind somewhat. However, Europe invests 5 percent of its GDP on transport and water infrastructure — more than twice that of the U.S. — ensuring constant improvement and upkeep.
While each country has its own individual rules and regulations, there are specific EU rules for the registration and identification of medtech products in Europe. These rules apply to the 28 countries that make up the EU and may differ from those in the U.S. or other regions. An experienced 3PL can assist the company by working with any of a number of EU organizations (so-called Notified Bodies) designed to support a medtech manufacturer during the initial registration of their products and supply chain set-up process.
Before a medical device can be placed legally on the European market it must receive CE marking approval, signifying that the product meets the essential requirements of all relevant Medical Device Directives in the EU. The 3PL partner assists the manufacturer during the conformity assessment conducted by the Notified Body to help ensure efficient navigation of the path to compliance and avoid costly delays in meeting market deadlines.
Worldwide the regulations regarding medical devices follow the global requirements of the International Organization for Standardization (ISO) 13485, creating a much more aligned quality system. A 3PL provides the expertise to navigate within an ISO 13485 compliant process.
It is recommended that a company establish a legal presence prior to entering the market. 3PLs, however, can work with financial services providers that are able to serve as a fiscal representative on behalf of a shipper in the event that they don’t want to set up a legal entity.
ther important topic is the regulation on product labeling. The so-called Unique Device Identification (UDI) initiated by the FDA in 2012 and the European Commission in 2013 is in full implementation and sets strict requirements on the labeling of class I, II and III devices for the coming years. It is important that the 3PL can assure the processing of these bar codes through their WMS and TMS systems to provide the company with the required visibilty in the medical device supply chain.
Globally, the labor market is evolving. The skills and competencies identified by employers as vital change as well, and it’s important to be aware of the availability and qualifications of the local workforce. In Europe, specialized training is required in the healthcare industry and the workforce is less transient than in many other regions, providing a welcome stability in the labor force.
Partnering with a 3PL
3PLs offer a wide spectrum of consultancy services in setting up the operation from a full supply chain perspective. As previously mentioned, fiscal representation can be arranged as well as specialized guidance regarding medtech compliance with ISO certifications. Additionally, 3PLs leverage knowledge concerning healthcare operations across a range of accounts and regions.
Often, medtech shippers who want to enter the EU market are smaller companies that don’t sell in the EU, ship direct from the U.S. or sell via distributors or wholesalers. A 3PL partner can provide a multi-client solution in the EU and reduce supply chain costs.
Larger medtech shippers, meanwhile, are looking more and more for postponement and VAS activities in each region in order to reduce SKUs and simplify production. 3PLs offer these services within the framework of an ISO 13485 compliant process.
Medtech manufacturers frequently require last mile or white glove deliveries of their products to the final customer. Recently we have experienced an increase in the number of B2C deliveries as well. A 3PL partner can provide transportation management services in order to supply a non-asset-based transport network that meets the quality and traceability/visibility requirements in medtech.
And finally, some medtech products use EtO sterilized components or consumables that, in larger quantities, require special storage and investments already in place at a medtech 3PL.
Partnering with a 3PL establishes the appropriate culture of shared purpose between both organizations to implement structured and continuous improvement by applying the Lean process to medtech supply chain logistics. The potential for development in the medtech industry in Europe establishes a unique opportunity for a partnership between these companies and 3PLs to create an efficient and productive entry into the European market. 3PL’s with a strong developed lean culture offer, besides the focus on continuous improvement, also a strong developed process driven approach in their operations. This is of great benefit for Healthcare manufactures in order to guarantee the required quality levels in their supply chain.
Arthur van Gerven is the Senior Director Business Development and Key Account Management for Menlo Logistics, Europe. He is responsible for EU marketing, sales, solutions, key account management and 4PL services. Based in Amsterdam, he’s been with the company for 17 years, with more than 25 years’ experience in supply chain and logistics, specifically in the Healthcare industry.
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