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Medical Technology Innovation Gaining Ground in China, India

 |  By John Commins  
   January 20, 2011

China, India, and Brazil are gaining ground in their ability to make the latest medical technology innovations, and may surpass developed countries in innovative healthcare delivery over the next decade, according to a PcW report published this week.

PwC's Medical Technology Innovation Scorecard: The race for global leadershipfound thatgrowth in these emerging market economies isattracting innovation resources and activity, allowing these countries to take the lead in developing a new generation of small, faster, more affordable medical devices.

 "A confluence of social, demographic, economic and technology changes is altering the dynamics of the medical technology field," said PwC analyst Mike Swanick. "As a result, ecosystems that promote medical technology innovation – with supportive elements such as access to financing, scientific knowledge and patient interaction – are being established around the world, These changes are creating opportunities for companies – and entire nations – that are able to adapt to a rapidly evolving environment."

The PwC report assessed the capacity of nine countries to adapt to the changing nature of innovation: Brazil, China, France, Germany, India, Israel, Japan, the United Kingdom and the United States.

While there has been anecdotal evidence that the center of innovation is moving away from the United States, PwC says its report quantifies five factors, using 86 different metrics, to evaluate how well each nation promotes the advance of innovation, looking at the past five years and projecting change over the next decade to 2020.

The Innovation Scorecard ranks the overall capacity of each country on a scale of 1 to 9 with 9 being the highest score. A top-line view of the report finding reveals:

  • The U.S. currently holds its position as the global leader in medical technology innovation, and because of decades of innovation dominance, it continues to show the greatest capacity for medical technology innovation. The U.S. currently has a total score of 7.1.
  • The scores of the other developed nations (United Kingdom, Germany, Japan, and France) fall in a band of 4.8 to 5.4. Germany and the United Kingdom demonstrate the strongest support for innovation, and Japan the weakest.
  • Israel ranks near the level of the European nations, a reflection of its strong capacity to foster innovation.
  • China, with its economic growth engine, scores 3.4, ranking it higher than India and Brazil, each of which scored 2.7.

Looking to the future, the United States is expected to continue to lead in medical technology innovation, but also will lose ground to other countries during the next decade. The innovation scorecard also projects relative declines for Japan, Israel, France, the UK and Germany. By contrast, China, India and Brazil are likely to see gains during the coming decade.

China, which has shown the largest improvement in its medical technology innovation capacity during the past five years, is expected to continue to outpace other countries and reach near parity with the developed nations of Europe by 2020, PwC said.

PwC analyst Simon Friend said that if developed counties do not step up investment in innovation, over the next decade new markets will surpass developed countries in innovative healthcare delivery. "Stimuli for new technologies [are] being built through the education system and we will see businesses focusing on new markets for new ideas and expanding sales bases," Friend said.

The innovation scorecard examined where each of the nine countries evaluated stands in relation to five "pillars" that make the United States a leader in medical technology innovation: Financial incentives such as reimbursements for adoption of new technologies; resources for innovation, such as academic medical centers; a supportive regulatory system; demanding and price-insensitive patients; and a supportive investment community of venture capitalists and other investors, PwC said.

The scorecard showed that the innovation ecosystem itself is changing as the nature of medical technology innovation evolves. Some of this transformation is being driven by changes in the United States, such as more expensive, less-predictable regulatory approvals, an increased focus on value and cost-effective solutions in healthcare and increasingly international investments in research and development.

Other dynamics are the result of changes abroad, including increasing investment in local academic medical centers; investment in research programs; the return of foreign-educated scientists and doctors to their homelands; advancement of mobile health technologies that expand access to care; and a focus on the lean, frugal and reverse innovation necessary to deliver faster, better, cheaper and more effective healthcare solutions in these markets, PwC says.

As a result, medical technology companies increasingly are seeking clinical data, new-product registration and first revenue in markets outside the United States that are becoming more attractive and supportive of new innovation. Medical technology innovators already are going first to market in Europe and, by 2020, likely will move into emerging countries before entering the United States, PwC says.

Despite the size of the markets in China, India and Brazil, their global leadership in medical technology innovation is not preordained. Factors related to intellectual property protection, difficulty of doing business in some emerging countries and weak local supplier networks could make these markets less attractive, despite their size, and could hinder these nations' efforts to assume innovation leadership. PwC said.

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John Commins is a content specialist and online news editor for HealthLeaders, a Simplify Compliance brand.

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