MEDICAL TECHNOLOGY INDUSTRY SECTOR BLUEPRINT 2011 A global ambition A thriving medtech economy A global ambition A thriving medtech economy The Medical Technology Association of New Zealand (MTANZ) is the leading industry body representing medical technology manufacturers, importers and distributors of medical devices in New Zealand. MTANZ aims to increase awareness of the medical technology industry in New Zealand and to ensure patients benefit from the innovative medical devices available today. MTANZ supports New Zealand researchers and manufacturers in developing medical devices for international markets. MTANZ represents manufacturers and suppliers of medical technology used in the diagnosis, prevention, treatment and management of disease and disability. MTANZ promotes policies for a legal, regulatory and economic environment to advance access to innovative medical technologies. THE MEDICAL TECHNOLOGY ASSOCIATION OF NEW ZEALAND PO Box 74116, Greenlane Central, Auckland 1546 P + 64 9 917 3645 F + 64 9 917 3651 2 3 A global ambition A thriving medtech economy The medical Over the next 24 technology sector of months, 22 companies New Zealand in the New Zealand plans to hire over medical technology 165 full-time sector plan to raise skilled workers $44.1 million. in the next 24 months. In the last financial The New Zealand year, the New Zealand medical technology medical technology sector spent over sector earned over $65.3 million on $578.8 million in research and exports. development in the last financial year. www.mtanz.org.nz 2 3 A global ambition A global ambition A thriving medtech economy A thriving medtech economy ACKNOWLEDGEMENTS EXECUTIVE SUMMARY 1. THE ROLE OF MEDICAL TECHNOLOGY IN NEW ZEALANd’s ECONOMY 1.1 National Prosperity and Medical Devices 1.2 Increasing Our Share of the TIN100 1.3 Closing the Gap with Australia 1.4 Building a “Healthy” Healthcare System 1.5 Incubating Growth 1.6 What Success Looks Like for Medical Technology 2. GLOBAL MARKET OVERVIEW 2.1 Global Market Size 2.2 Healthcare Spending 2.3 Global Economic Recession 2.4 Growth Predictions for the Medical Technology Industry 2.5 How Can New Zealand Capitalise on the Opportunities? 3. THE MEDICAL TECHNOLOGY SECTOR IN NEW ZEALAND 3.1 Company Establishment and Focus 3.2 Employment 3.3 Revenue and Export Focus 3.4 Innovation and Product Development 3.5 Clinical Trials 3.6 Funding 3.7 Constraints 4. ACTIVITIES SINCE THE 2009 REPORT 4.1 Medical Technology Association of New Zealand (MTANZ) 4.2 Government Initiatives 4.3 Commercialisation Initiatives – A Sector Perspective 4.4 University Commercialisation Offices of New Zealand Workshops 4.5 Master of Engineering Studies in Medical Devices and Technologies 5. RECOMMENDATIONS AND CONCLUSIONS 5.1 Coordinating Initiatives 5.2 Bridging Funding Gaps 5.3 The Road Forward: Bigger, Better, Brighter 5.4 What Does the Sector Need to Grow? REFERENCES 4 5 A global ambition A global ambition A thriving medtech economy A thriving medtech economy ACKNOWLEDGEMENTS The conclusions reported in this sector blueprint result from an online survey and follow up discussions with various sector and research representatives. This research was conducted by the Medical Technology Association of New Zealand and appointed consultants. The authors would like to thank those who have generously contributed to this document. Thank you to all the survey participants for their insightful information and comments which created the basis for this document’s content. There are many others to be thanked and these include: The Composition Specialists; Advocacy Works; Dr Stuart Ryan; Dr Garry Nixon; Dr Jonathan Sackier; Dr Mathieu Petitjean; New Zealand Trade and Enterprise; Ministry of Science and Innovation; Dr Dan Schultz; Dr Diana Siew; Rod Ruston; KeyResearch; Brightwall; and Brigid Glass & Associates. Your contribution towards the content of this sector blueprint has helped the authors produce a high quality review and in-depth analysis of the medical technology sector. The Medical Technology Association of New Zealand would like to thank New Zealand Trade and Enterprise and TechNZ part of the Ministry of Science and Innovation for the grants to support this project. We have done our best to ensure that the data presented in this sector blueprint is as accurate as possible. The Medical Technology Association of New Zealand remains responsible for any errors of fact or interpretation. 4 5 A global ambition A global ambition A thriving medtech economy A thriving medtech economy ROLE OF THE MEDICAL TECHNOLOGY SECTOR IN NEW ZEALANd’s ECONOMY New Zealand’s economic climate is currently challenging, highlighting the importance of the national growth strategy. Raising export revenues, increasing high value jobs, cultivating new businesses in regional centres and encouraging expansion in inventive and high-tech industries are all fundamental activities that support economic growth. The medical technology sector in New Zealand has excellent potential to grow from its already strong foundations, and has a strategy in place to achieve this growth. The healthcare system as a whole plays an important role in the innovation of medical technology. Having the innovation of home grown technology champions alongside international ideas and breakthroughs from multinational companies gives the best environment to support innovative technologies being generated domestically for international use. Converging technologies – such as the increased overlap between health IT and medical devices - is another important path for innovation in the healthcare sector as a whole. Given that many innovations in medical technology result from clinicians using technologies, a fertile clinical trial sector in New Zealand will help the country continue to be a great market for innovation. The role of the professional relationships between clinicians, health boards and medical technology companies is also vital to the ongoing growth of the sector. Success for the sector will be found in a number of measurable ways: • more new companies; • more niche ideas that can be exported; • more emphasis on using current innovations to chart a course for future invention; • continuing working with clinicians to maximise the impact of domestic developments and explore new and better ways to use technology; • cultivating a home-grown industry with good jobs and attracting great talent. 6 7 A global ambition A global ambition A thriving medtech economy A thriving medtech economy THE GLOBAL MARKET The global medical technology market is estimated at approximately US$350 billion. The largest market is the United States with the New Zealand medical technology market estimated at US$977 million – approximately 0.3% of the global market. While the long-term picture indicates growth in healthcare spending, including on medical devices, the ‘Global Economic Recession’ has had an impact on businesses. The slow recovery of the capital markets in particular may affect the ability of new and younger companies to compete. Research and development (R&D) spending cuts in large multinationals could see weakness in their pipelines in the future, perhaps opening up opportunities for partnership and acquisition. In addition, the shift in focus to emerging markets may change the dynamics in these markets and may result in greater competition. The convergence of devices, pharmaceuticals, health information technology and diagnostics is creating new possibilities of prevention, treatment and cure of chronic diseases. This innovation, combined with an ongoing focus of healthcare improvement by governments – in the face of rising healthcare costs, aging populations, increasing consumer expectations and limited clinical capacity - indicates the medical technology market will continue to thrive. Market dynamics are shifting, with the United States likely playing a less dominant role over the next 10 years. This shift, combined with solid growth opportunities gives New Zealand an opportunity to provide a breeding ground for globally-competitive medical technology companies. New Zealand already has some great success stories in this space; Fisher & Paykel Healthcare, Orthopaedic Synergy, Dynamic Controls and Triodent are all examples of success export-driven medical technology companies. KEY FIGURES FROM THE SURVEY The survey was conducted by the Medical Technology Association of New Zealand and was directed at New Zealand-based manufacturers of medical devices. Sixty seven companies were identified that fitted this description. Two-thirds of the respondent companies indicated their company had begun as a start-up. Only 17% of companies were established before 1990, reflecting the emerging nature of the medical technology sector. While the sector is still emerging, it does have relatively high employment counts compared with average New Zealand businesses; in addition the sector also plans to hire at least 165 highly skilled full time equivalent employees over the next 24 months, indicating strong expansion plans. Revenue for the sector in the last financial year was conservatively estimated at $611.595 million, with $578.857 generated from exports over the same period. The top export markets for the sector are North America, followed by Australia, Europe, Asia and the United Kingdom. Asia was most commonly 6 7 A global ambition A global ambition A thriving medtech economy A thriving medtech economy identified by companies as a region they are planning to expand into in the next 24 months. The difference in survey