A European Union regulation for medical devices produced and sold in the bloc has boosted cross-border expansion opportunities for firms that have adapted to the new rules, according to Mark Braganza, managing director at Sun European Partners.
The Medical Device Regulation (MDR) came into force gradually from its publication in May 2017 and has applied fully since May 2021. From May 2024, all devices placed on the market must conform with the MDR and by May 2025, any devices still in the supply chain that have not reached a final user must be withdrawn.
By introducing greater levels of harmonisation, the regulation has provided a little more stitching to the fractured European healthcare sector.
“The advantage that some product spaces have is that regulation can provide consistency and Europe, since the European Medical Agency’s founding, has gone through more and more harmonisation of the standards,” Braganza told PE Hub Europe. “There have been some recent shifts in the medical device legislation in Europe that have slightly shifted the way that European regulators look at medical device regulation, which is great for those businesses that are well set up to do it and slightly more challenging for businesses that haven’t been ahead of it and seen it coming.
“But it does allow those products to be taken cross-border if you’re set up for it.”
The regulation improves cross-border harmonisation in several ways. As a regulation rather than a directive, it does not need to enter national law – reducing the risk different interpretations across the EU market.
Additionally, each medical device will have a unique device identifier and a production identifier to identify the unit producing the device. The MDR has also broadened the range of products that fall under the regulation compared with previous iterations. Regulators have created the European Database on Medical Devices (EUDAMED), which tracks the lifecycle of medical devices available in the EU and collates information on devices and related companies, such as manufacturers.
A similar regulation for in-vitro devices, the IVDR, has applied since May 2022.
When the EU MDR launched, several medical products experts applauded the fact the EU MDR brought the bloc’s standards closer to that of the US Food and Drug Administration – potentially opening even more cross-border growth opportunities.
“It also allows you to think about how a product fits with the regulation in other geographies, not just the US,” said Braganza. “For great products that are built here in Europe, with the right mindset, there is absolutely no reason why those great products can’t be moved into other geographies as well.”
While efforts such as the MDR provide more harmonisation across the EU in terms of medical products and bring that market closer to the integration of the US, Europe is likely to remain behind on medical service harmonisation across borders.
“We are focused on working with local champions with products or product-like services that can be scaled,” said Braganza. “The key issue is how can we help these businesses grow. In Europe you have a more fragmented market. There will be some services that scale and cross borders quite happily; we would be very happy to do that.
“In other circumstances, there are services that maybe are more constrained by the borders, in which case, it’s a question of at what point do we get involved with that business? Do we think we can help that business grow at a pace that maybe it wouldn’t do on its own or with another sponsor? One of those aspects is what you can do outside of the geographic constraints of where the business is located.”
Another challenge, as Braganza mentioned, is making sure all European companies embrace the new regulation. According to a survey conducted in April and published in July by trade body MedTech Europe, MDR certificates have not been issued for more than 85 percent of the 500,000-plus devices previously certified under the older regulations. And more than half of respondents said they do not intend to transition some of their portfolio to the MDR.
Sun European Partners, based in London, is the European adviser to US-based Sun Capital Partners, which has offices in Boca Raton, Los Angeles and New York.