Overview of the German Medical Device Market
As people around the world live longer, healthier lives, the demand for innovations in medical technology is skyrocketing. In Europe and internationally, devices made in Germany benefit from a distinguished reputation and a guarantee of quality. But what makes the German market tick?
SIMEON Medical managing director Dr Markus Keussen says: “Medical treatment in Germany reaches from basic treatment to high end, computerized medical care. The German market is characterised by fair competition, and offers a stable economic, political and regulatory environment.
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By GlobalData“We benefit from high transparency regarding customers’ decisions and premium suppliers in mechanics, electronics and software. Outstanding research facilities and key-opinion leaders are available due to excellent medical schools and universities. We can thus rely on a highly qualified workforce with engineers and medical specialists.”
A well-built infrastructure
Germany’s medical device sector is the largest in Europe and the third largest in the world, taking up 10.2% of global medical tech production after the US (39.6%) and China (11.1%). In 2015 it reached €27.6bn in sales, €17.6bn of which was in exports.
The industry thrives in part due to the sturdy infrastructure underpinning it – more than 99% of Germany’s 82 million residents have health insurance, and healthcare spending takes up around 11.3% of Germany’s GDP. This means that when a manufacturer develops a device in Germany and markets it to German citizens, the pathways are in place to enable it to reach patients and make a difference to their lives.
Medical device companies can also receive grants from the Kreditanstalt für Wiederaufbau (KfW) to support their business and can apply for government funding for many research projects. A series of clustering programmes are in place in Germany, such as the European Cluster Excellence Initiative and the go-cluster initiative, which incentivise companies to position themselves among the 100 innovation clusters across the country to foster collaboration and innovation between manufacturers. Approximately 130,500 employees work for around 1,200 manufacturers in Germany.
The country’s central location in Europe also puts Germany in the ideal location to export product across the continent, with 41% of German medical technology export going to EU member states and another 10% to other European countries. A further 18% of exports are shipped to North America and Asia.
Vibrant SME scene
The German medical devices industry is made up almost entirely of small and medium sized enterprises (SMEs), with SMEs having a 91.5% share of the market.
The SME-centric market for German medical technologies offers flexibility to innovate where the bigger American or Japanese corporations must focus on growth. Focusing on niche areas of medical technology development allows German SMEs to react flexibly, meeting a broad range of demands and supplying highly specialised products.
One standout Berlin-based start-up is Ada Health. Ada has created an artificial intelligence (AI) powered health platform intended to support clinical decision making to help people around the world understand their health. Over ten million symptom assessments have been carried out using Ada, which has grown to over seven million users. Users are able to describe their symptoms to an AI powered symptom checker, which will then make a preliminary assessment for them to take to their GP. Ada has raised a total of $69.3m over three funding rounds.
Ada Health co-founder and CEO Daniel Nathrath says: “Germany is home to internationally recognised research and medical institutions, like the Max Plank Institute and Charité, has an extensive health ecosystem, and sets a high benchmark for rigorous technical standards. As a German-founded company headquartered in the country’s capital, we have access to a diverse talent pool and industry-leading tech expertise, which has been a real advantage to our business as we’ve expanded globally.”
Since its launch in 2016 after six years of research and development, Ada was won ten prestigious awards, including the Europas Hottest Health Start-up, a Silver Cannes Lions Award, and the AI for the Betterment of Humanity Prize.
World class education
Germany is home to three of the top 15 medical schools in Europe: Charité Universitätsmedizin Berlin, Ruprecht-Karls-Universität Heidelberg and Ludwig-Maximilians-Universität München.
Germany also has the second highest rate of students enrolling in technological fields in the EU, with 29% of university students studying science, mathematics, computer science or engineering. There are over 150 different bachelors and masters courses available throughout the country for students to choose from which specialise directly in medical technology.
Interdisciplinary vocational education programmes in the medical field are also offered by numerous colleges and technical schools in Germany for those who do not choose to pursue a university education. For many school leavers, heading straight to career in medical technology is highly appealing due to the broad range of occupations available in the industry. Apprenticeships are readily available at many of the country’s top med tech firms, in close collaboration with the German Chambers of Industry and Commerce and the German Confederation of Skilled Crafts.
Medical device companies in Germany actively seek to foster interest in their technology among young people, with many setting up their own interactive museums to reach out to children and make the prospect of working in the field as adults more attractive to them.
Innovation for the elderly
By 2035, Germany’s over-65 population will reach 24 million, representing a third of the domestic population, while the over-50 demographic will represent at least half. As such, digital health companies in Germany have become heavily focused on the ‘silver economy’, working on developing medical devices which will improve the quality of life for an aging population.
Keussen says: “Robotic support in geriatric care and digital applications for home care are unique challenges which are relevant for Germany as well as for other markets with a rapidly aging society, e.g. Japan, China and Scandinavia.”
There are more than 400 departments or hospitals in Germany dedicated to geriatric medicine, and since 2003 there has been a national obligation to include medicine of aging and the elderly in pre-graduate medical training.
Geriatric medtech in Germany is heavily focused on technologies which alert carers when their patients need assistane. Start-up AssistMe is working on developing adult incontinence underwear with a built in sensor to alert care staff when they need changing, while MOIO care has developed a set of sensors designed to be worn on a patients lower back. MOIO’s sensors have multiple functions, including fall alert, atypical motion alert, and GPS tracking.
Setting international standards
The German medical device market is subject to strict safety regulations, something which should give manufacturers considerable peace of mind in the wake of the worldwide failures in medical devices revealed in the Implant Files investigation.
German medical devices have to comply with the EU-wide regulations of the CE mark, which must be obtained for all devices sold with an intended medical purpose in Europe. Medical devices are not certified by governmental institutions in Europe but by organisations known as ‘notified bodies’ which operate on the government’s behalf.
There are ten notified bodies headquartered in Germany, meaning manufacturers have plenty of pathways open when assessing the safety of the equipment they produce.
