The medical device industry in Ireland: Creating an environment for innovation (when academia,government,and industry collaborate)

Introduction

The European medical technology (medtech) sector accounts for 31% of the world market, taking second place only to the US. ¹ How does such a small country, like Ireland, remain competitive in the medtech sector compared to a super power country like the US? Creating an environment for innovation, through collaborative efforts between academia, clinical, government and private industry stakeholders, is laying the ground work to effectively meet the needs of an aging population experiencing longer life, but with an increasing prevalence of chronic diseases. The increase in chronic diseases, and related soaring healthcare costs to manage these conditions, is challenging healthcare providers, and other leaders in the medical device innovation process, to think in radical ways when addressing unmet needs, ways to increase efficiencies, while controlling costs.

Medical device industry in Ireland

The Irish medtech sector is a major contributor to the overall growth of the Irish economy, accounting for 9% of all exports. ² Ireland is home to 9 of the world’s top 10 medical device companies. ³ The medtech sector employs over 35,000 people in Ireland and is the second largest employer of medtech professionals in Europe. ⁴ Ireland is one of the largest exporters of medical products in Europe with annual exports of €12.6 billion in 2016. ⁵ As many as 18 of the world’s top 25 medical technology companies have a base in Ireland and 50% of the 450 medtech companies based here are indigenous. Ireland also boasts an incredible strong services and contract research and manufacturing base; 50% of the companies located here are in the business to business space. There is no sense of complacency across the sector in Ireland where industry and Government alike are constantly looking for new ways to enhance competitiveness, develop new capabilities and ultimately generate new sustainable growth.

Ireland’s appeal

Ireland’s attractiveness to global medtech companies stems from a concerted effort between academia, government and industry to draw foreign direct investment. Employment in the medical devices sector more than doubled between 1996 and 2006. ⁶ From a cultural perspective, no language barrier to entry and operations exist between Ireland, and major medtech hubs in countries like the US and Australia. Further, it offers a stable political and economic environment, with a stable currency, and a low cost to do business. It is centrally located, offering quick and duty-free access to other European locations in the region.

The Irish government has also contributed to the medtech sector’ successes by setting a 12.5% corporate tax rate, the lowest in Europe, and a 25% R&D tax credit. In addition, the government has supported initiatives to create a well-developed industrial and business infrastructure, and an exceptional and competitively priced telecommunications system to lure many industries, including the medtech sector.

Many of the Irish universities have responded to the growing importance of the medtech sector by modifying their focus to meet the need for a specialized work force focused on biomedical engineering. The modification resulted in the creation of a young, highly skilled, well-educated workforce, with abundant technological and business skills, readily available to the medtech multi-national and indigenous companies.

Limitations and challenges

Despite Ireland’s overwhelming success in the medical device sector over the decade, there are several key areas of concern that will need to be addressed, and continually monitored.

Currently in Ireland, as with other developed countries, manufacturing jobs have been declining over the past decade, putting innovation and growth at risk. The decline is a result of developed countries losing the battle of cost competitiveness to developing countries. Structural improvements will need to be made to improve cost competiveness in the global market place.

In an effort to reduce their corporate tax rates, many US companies have moved their business to Ireland. With the significant reduction in the corporate tax rate in the US, the corporate tax rate gap, between the US and Ireland narrows. As President Trump begins to put pressure on US companies to bring their businesses and work force back to the US, Ireland is considering further reduction of the 12.5% tax rate to remain competitive.

Irish-owned companies currently experience major barriers when trying to secure funding for capital intensive manufacturing activities and start-ups. Finding and maintaining investors to fund these efforts continuing to pose a challenge.

Several of the biggest employers in Ireland have warned that the housing crisis is so extreme that it could harm Ireland’s competitive edge. New companies, as well as companies that are expanding, are continually burdened with housing staff because of a temporary housing shortage. A report for the American Chamber of Commerce Ireland cites housing as one of the most critical “pressure points” when looking to recruit to expand their Irish operations. ⁷

Role of private industry

Ireland is known as being an open and pleasant country to do business. This type of environment presents a great opportunity for competitors, in private industry, to become collaborators. Industry and academia are finding opportunities to collaborate on joint research resulting in new R&D possibilities. Partnerships between medical device companies and other strategic partners are predicted to be the main driver of future innovation and collaboration. Ireland’s thriving medical technology and device industry is a great example of how all stakeholders benefit from bringing together national and international researchers and institutions, creative Irish companies, successful multinationals and industry experts.

Role of government

The Irish government plays several key roles in the medical device market including overseeing regulation, providing funding and encouraging collaboration amongst research centers across Ireland. The regulation of medical devices in Ireland is largely driven by EU Legislation, of which the applicable law is set out in the Medical Device Regulation (MDR). MDR is a new regulation that applies to all medical device manufacturers who intend to place their products in the European Union (EU). The new regulation was published in 2017. The Health Products Regulatory Authority (HPRA), the equivalent to the Food & Drug Administration (FDA) in the U.S., oversees the industry compliance for the new regulation. The MDR gives medical device manufacturers a three-year transition period, through 2020, to implement several key changes including ⁸ :

Unannounced factory audits

Similar to the FDA in the U.S., HPRA is well connected with regulators in other countries because a large amount of medical devices are exported from Ireland to other countries, allowing the exchange of best practices across many countries’ regulatory processes.

The Irish government has allocated considerable resources to create government organizations, established to attract and help develop foreign companies to set-up operations in Ireland. Ireland’s inward investment promotion agency, the IDA, is a non-commercial, semi-state body that promotes Foreign Direct Investment into Ireland. ⁹ IDA Ireland, formerly known as the Industrial Development Authority, was founded in 1949. Over the last six decades, the agency has been experiencing major success in targeted areas, particularly the life sciences. They serve as a stimulus, supporting companies in developing their businesses by investing in R&D, upscaling their workforce and diversifying their activities, through funding programs and incentives.

For example, Boston Scientific entered the Galway region in 1994 after some of the digital technology organizations closed their manufacturing facilities. Today, the Galway site is the company’s largest manufacturing facility. The extensive operation uses over 50 leading edge manufacturing technologies, and the site has expanded its capability in the last decade to include areas such as new product development, regulatory affairs and analytical laboratory testing. ¹⁰ The location has become one of the company’s centers of excellence for the development of Drug Eluting Stent products and has played a central role in developing products to treat endovascular, and gastroenterological diseases.

In response to a biotech trend, where more and more medical devices were being approved, and companies were expanding their workforce, the government responded quickly by investing 100 million dollars in creating a specific research and trading center for biotechnology, called the National Institute for Bioprocessing Research and Training (NIBRT). ¹¹ In 2015, NIBRT trained over 4000 people in biotech manufacturing and development. ¹² Since NIBRT provides such specialized training, companies can hire people who have already been trained through at NIBRT, or send people they have already hired to NIBRT for deep, immersive training. Barry Heavey, from IDA Ireland, describes NIBRT as a “flight simulator for biotech manufacturing” because the people who’ve trained at NIBRT have worked on real-world equipment in a real-life situation, so their level of knowledge and experience when they enter good manufacturing practices facilities is much higher than it would be otherwise. Developing highly skilled workers, specifically for biotech manufacturing, is a critical resource for the medical device industry, and a great example of the government working diligently to make it as simple as possible for companies to hire appropriately trained people in Ireland.

Role of industrial development authorities

Similar to IDA Ireland, Enterprise Ireland (EI) is a government organization specializing in the development and growth of Irish enterprises in world markets, as well as start-ups from outside Ireland. The organization works in partnership with Irish companies to help them start, grow, innovate and export new sales in global markets. EI works with entrepreneurs and businesses across the entire business development spectrum, from early stage development, to established business owners and Irish multinational companies.

IDA Ireland is the agency responsible for the attraction and development of foreign direct investment in Ireland, and collaboration with existing foreign investors to expand their business in Ireland. IDA Ireland’s main objective is to encourage investment into Ireland by foreign-owned companies. It works as a strategic partner and provides consultancy and support services free of charge to help organizations establish themselves and grow.

Role of universities

Universities can play a critical role in the development and sustainability of areas with a large medical device industry presence by providing for the educational, training and research needs of the industry to ensure success and growth. The Irish Government’s support for research in Ireland’s universities increased dramatically over the last two decades, spending €1.22 billion since 1998 to strengthen national research capabilities. ¹³ As part of the process, research funding agencies and universities identified faculty with knowledge and interest in technology transfer to spur innovation. Collectively, these efforts are developing a culture of commercialization in Irish universities. As early as primary level education to higher level education, entrepreneurial thinking is embedded across the entire academic spectrum. Moving forward, efforts are underway to support the development of new opportunities in the medical device sector such as apprenticeships, to give students opportunities to become part of the medtech industry.

BioInnovate Ireland

In 2011, BioInnovate was created as a national medical technology training program that offers a neutral territory where academia, clinicians and industry can collaborate to develop novel medical technologies. ¹⁴ BioInnovate is a partnership established between several universities in Ireland whose role is to train participants to change their mindset from being technology driven to taking a needs-led methodology, creating an environment for innovation. By bringing people together with diverse backgrounds, the teams collaborate and gain understanding of each other’s backgrounds. Through nurturing these connections, BioInnovate participants are able to take their ideas through the needs-led process and bring their ideas back to the industry to create their own companies.

An example of a technology in development that recently came out of BioInnovate is a “seamless stitches” innovation developed by BioInnovate graduate, Dr. Cyrus Doctor, the 2015 Winner of the Cleveland Clinic’s Clinical Innovation Award. The “seamless stitches” solution has potential to provide an enhanced postoperative experience, reduced pain for the patient and minimizes the time of the surgical procedure at an appealing price for physicians and patients.

Conclusion