Current Market Trends
Procurement & Tenders
Government Health Plans
Population: 65.6 million
GDP*: USD $2.9 trillion
The UK’s large and sophisticated healthcare system has a constant need for products and is very receptive to new and innovative technologies. It's divided between the public healthcare system, which is financed through taxation, providing services free at the point of delivery; and the private segment. Total healthcare expenditure in 2015 was $239 billion (9.9% of GDP), an approximate increase of 3.6% on the previous year (2014: $230.6 billion/9.8% GDP). According to the Office of National Statistics (ONS), Government expenditure on health accounted for around 79.5% or $190 billion of total spending (Private Sector: $49 billion).
The largest purchaser of medical products is the public healthcare system, the National Health Service (NHS)). It receives funding from the central government but is run as four separate systems: NHS England, NHS Scotland, NHS Wales, and HSC Northern Ireland. The much smaller private healthcare segment is funded through private medical insurance, self-pay or overseas patients. Approximately 11% of the population has health insurance, however, many policies stipulate upper spending limits or only cover specific medical conditions. The nature of the market means that private sector growth is closely linked to public sector performance, policy, and funding for core services.
The sector is supported by around 2,500 small to large multi-national companies and a large import market for supplies. The U.S., a leading supplier of medicines and medical products, has a strong presence in the market. Demand exists for all types of products and services such as health IT, home care, assistive and orthopedics etc.
The largest segment of the public health sector, NHS England which serves 83% of the population, is comprised of around 207 general practitioner-led clinical commissioning groups (CCG’s) that plan and commission NHS services, such as hospital care or community health services; 153 acute hospital trusts; 10 ambulance trusts; and 55 mental health trusts. Most medical product procurement is carried out by acute trusts. They have the choice of purchasing through centralized organizations such as NHS Supply Chain (www.supplychain.nhs.uk), which maintains a product catalog of approved medical products and services; buying individually; forming consortia with other trusts; or working through collaborative procurement hubs. Potential suppliers favoring a direct approach can contact trusts or relevant healthcare provider, register on portals such as Supplying to the NHS (www.supplying2nhs.org) or search
for contracts on the Contracts Finder site (www.gov.uk/contracts-finder). Suppliers can also approach NHS Scotland, NHS Wales and HSC Northern Ireland via their respective agencies or procurement agencies for opportunities.
As it can be challenging to sell directly to the NHS from overseas, many U.S. exporters find it easier to form partnerships with well-established local companies. This enables new entrants to take advantage of their partner’s market expertise as well as their access to buyers and other decision makers.
Potential suppliers also have the option of approaching private sector healthcare providers through their procurement teams. Opportunities exist in areas such as secondary care e.g. private hospitals or and tertiary care; fields not typically available through the NHS (cosmetic surgery); or where public health services are limited (elder care, dental).
Financial pressures will influence purchasing decisions by healthcare providers. NHS England was tasked with achieving $33 billion worth of efficiency savings between 2012-15. The consensus is that funding needs to increase, by at least $10 billion a year over the next three years, to meet demands on services. Government plans indicate a smaller increase of $5.9 billion per year between 2015/6 and 2020/21. A survey conducted by the Association of British Healthcare Industries (ABHI) in July 2017 found that the NHS financial crisis, higher manufacturing costs due to the weaker pound, and the potential impact of the UK's departure from the European Union (EU) in March 2019 will be key concerns for industry over the next couple of years.
The growing population and demographic changes will also place stress on the system. The number of people with three or more long-term conditions is expected to rise to 2.9 million in 2018. Government statistics state that 63% of adults are obese or overweight. Expect continued focus on public health and preventative care initiatives to address the rise in ‘lifestyle related’ conditions such as diabetes and heart disease. The number of people aged over 65 is forecast to increase from 17.7% in 2014 to 19.9% in 2024. This trend will drive the rise in age-related health conditions such as dementia, which was the leading cause of death in England and Wales in 2016, and demand for adequate social care according to ONS. One way the NHS is seeking to address this is through assistive and e-health technologies aimed at promoting patient self-monitoring and independence. The growing use of home technology is part of a trend towards a shift in healthcare provision from hospitals to community services.
The UK is likely to see a continuation of public/private partnerships to help ease the strain on the NHS. For example, the NHS Choose and Book System enables patients to opt for government financed treatment at a private hospital. Private hospitals such as HCA Healthcare also partner with NHS trusts to provide care within Private Patient Units (PPU's) in NHS hospitals. There have been efforts by the UK competition authority to increase competition within the private healthcare market. The acute private hospital segment alone is currently dominated by a handful of large groups, such as HCA Healthcare and Circle Health.
The UK medical technology sector is comprised of just over 2,500 mostly small to medium sized companies. They are evenly spread across the country with small clusters of firms in the Midlands and South East of England. Radiotherapy equipment, neurology and cardiovascular devices are top performing segments. Others include single use technology, in vitro diagnostic technology, and orthopedic devices. Approximately 98% of firms are classed as SMEs.
Many of the leading U.S. medical device, technology providers and pharmaceutical companies have subsidiaries in the UK and well-established relationships with the NHS. They include companies such as Baxter Healthcare, Medtronic, Pfizer, GE Healthcare, BMS, Cerner and Hyland.
The UK is heavily reliant on its import market. The EU, led by countries such as Germany and the Netherlands, currently accounts for around two-thirds of imports. This percentage may decrease, creating opportunities for non-EU importers, such as the U.S., once the UK leaves the EU.
The NHS spends approximately $25 billion a year on goods and services. Most domestically produced medical products are exported, hence the demand for imports. The U.S. is an important overseas source of medical devices with an
estimated 16% share of the market. It’s a leading supplier of diagnostic, dental, orthopedic equipment, and high quality wound care products to the UK.
The Department of Health is currently committing substantial resources in treating the following illnesses and diseases: Cancer; Alzheimer’s; Mental Health; Parkinson’s; Diabetes; Rheumatoid Arthritis; Obesity and Diabetes.
Most medical devices and medicines require a CE mark or marketing license to be sold and marketed in the UK. It's not currently known how the UK’s departure from the EU will impact the regulation of pharmaceuticals or medical products. Industry has indicated an interest in maintaining an alignment of UK and EU regulations. The Medicines and Healthcare Products Regulatory Agency (www.mhra.gov.uk), an agency of the Department of Health, governs the regulation of medicines and devices. Firms complying with EU regulatory requirements can apply to register with the MHRA Device Online Registration System (DORS) to sell their devices.
Prices for prescription medicines are based on agreement between industry and government. For example, one agreement for branded medicines, the Pharmaceutical Price Regulatory Scheme (PPRS), is a pre-approved scheme which regulates the profit drug companies receive on the sales of their drugs to the NHS. It requires participating firms to make reimbursement payments to the NHS based on sales.
Companies selling medical devices to the NHS are permitted to determine the price of their products; there are no specific product codes. However, as previously noted, NHS agencies are under intense pressure to cut costs and achieve savings so it's likely pricing will be subject to negotiation. Under the NHS reimbursement system in England, known as the National Tariff Payment System, Clinical Commission Groups (CCG's) pay healthcare providers for procedures per patient consultation and/or treatment. Charges are calculated using pre-determined tariffs and codes for treatments and conditions. Providers will therefore consider if there's enough funding within a respective code to cover the cost of using a medical device or product. The other NHS agencies, e.g. NHS Scotland, have similar reimbursement systems in place. A new scheme introduced by NHS England in 2016 enables hospitals to place orders for expensive medical devices via centralized procurement agency NHS Supply Chain. This scheme covers all devices listed under High Cost Devices within the National Tariff Payment System.
Certain products, such as stoma or incontinence appliances, are available to patients on prescription. Qualifying devices are listed within a monthly Drug Tariff which outlines what pharmacies will be reimbursed for devices, drugs, and their services. Suppliers can apply to NHS Prescription Services (www.nhsbsa.nhs.uk) to have their products added to the Drug Tariff. Products must adhere to relevant regulatory requirements, fall within the qualifying categories, and already be on sale in the UK to qualify.
U.S. companies should not encounter any political or trade barriers to market entry. The UK currently adheres to EU procurement rules and conducts most buying through commercial negotiation. That said, the NHS faces considerable financial pressure and so will often make purchasing decisions based on price alone, rather than factoring in quality or patient outcomes.
One hurdle that companies can face is the Health Technology Assessment (HTA) agencies such, as the National Institute for Health and Care Excellence (NICE) in England, which judges the clinical and cost-effectiveness of new and existing drugs, treatments, and medical devices. It provides the NHS with guidance on treatment strategy and influences procurement decisions by stating which products are reimbursable on the NHS.
Procurement & Tenders
Government procurement www.gov.uk/contracts-finder
NHS Supply Chain www.supplychain.nhs.uk
Regional collaborative procurement hubs e.g. www.eoecph.nhs.uk among others NHS National Procurement (Scotland) www.nhsscotlandprocurement.scot.nhs.uk
NHS Wales Procurement Services www.procurement.wales.nhs.uk
Procurement and Logistics Service (Northern Ireland) www.hscbusiness.hscni.net/services/1878.htm
Name: Health and Care Innovation Expo (NHS England)
Location: Manchester Central, Manchester
Dates: September 11-12, 2017 Web site: www.england.nhs.uk/expo
Description: Public sector health and social care conference and exhibition
Name: EHI Live 2017
Location: NEC, Birmingham
Dates: October 31-November 1, 2017 Web site: www.ehilive.co.uk/
Description: Health IT conference and exhibition
Name: BDIA Dental Showcase
Dates: October 19-21, 2017 Web site: www.dentalshowcase.com
Description: Dental exhibition
Location, NEC, Birmingham
Dates: April 25-26, 2018 Web site: www.naidex.co.uk
Description: Home, disability and rehabilitation exhibition
Name: UK e-Health Week 2018
Location: Olympia, London
Dates: May 15-16, 2018 Web site: www.ukehealthweek.com
Description: Health IT conference and exhibition
Name: The Dentistry Show
Dates: May 18-19, 2018 Web site: www.thedentistryshow.com
Description: Dental conference and exhibition
Name: Health Plus Care
Location: ExCeL, London
Dates: June 27-28, 2018 Web site: www.healthpluscare.co.uk
Description: Care commissioning conference and exhibition
UK Department of Health www.gov.uk/government/organizations/department-of-health The National Institute for Health and Care Excellence (NICE) www.nice.org.uk
Government Health Plans:
Northern Ireland www.health-ni.gov.uk/topics/health-policy
Association of British Healthcare Industries www.abhi.org.uk
British Healthcare Trades Association www.bhta.net
British In Vitro Diagnostics Association (BIVDA) www.bivda.co.uk
GAMBICA (Instrumentation, Control, Automation and Laboratory Technology) www.gambica.org.uk
U.S. Commercial Service Contact Information
Name: Cheryl Withers
Position: Commercial Specialist
Phone: +44 20 7894 0471
Healthcare spending (including investment)
.. as percent of GDP
. of which spent on inpatient services (including long-term care)
... of which spent on pharmaceuticals/consumables
$15.7 billion approximately
... of which spent on outpatient services
Hospitals, Procedures, Healthcare Professionals
Number of hospitals
Number of hospital beds
... NHS available beds per capita
2.7 beds per 1,000
Number of surgical procedures
...Top procedure Cataracts
(approximately 300,000 procedures a year)
...of which surgeons
...of which pediatricians
Population United Kingdom
65,648,000 million (England 55,268,100; Scotland 5,404,700; Wales 3,113,200; & Northern Ireland 1,862,100)
Life expectancy men/women
3,630 (average 4.5 per 1000 live births)
Percent of population older than 65
...caused by 1) England & Wales – Dementia
...caused by 2) Ischaemic heart diseases
Prevalence of 1)
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