Weekly Rundown - 26.03.23

For my last weekly rundown this quarter, I thought it would be fitting to review what happened in the last three months and what to expect from Q2 2023. But before I dive into that, I wanted to let you know that I'll be taking a break from posting next weekend as I'll be away on a family holiday starting from April 1st. As much as I love my work, I know it's important to log off and spend quality time with my wife and kids. However, I must admit that it's easier said than done, especially when I'm passionate about what I do. Nonetheless, I'm determined to make the most of this break and create lasting memories with my family.

As I reflect on the first quarter of 2023, it's apparent that the tech industry is an ever-changing and dynamic landscape and it continues to move at an incredible pace. With AI and blockchain technologies rapidly evolving, new product releases hitting the market, and significant announcements from industry leaders, there's never a dull moment. However, what stood out to me this quarter were the many government policy changes, forecasts, and regulatory decisions that left the Medtech sector on edge. The impact of policies such as the EU Medical Device Regulation extension and the push for Net-Zero emissions has kept Medtech businesses busy deciphering what these changes mean for them and the wider sector. The release of the UK's medical technology strategy and the announcement of an upcoming EU law requiring companies to prove their green claims are real are just some of the significant developments that shaped the Medtech landscape this quarter. Overall, it's been a busy and eventful first quarter, and I look forward to seeing how the industry continues to evolve in the coming months. Here’s what we can take away from the Q1 of 2023:

UK Medtech sector will continue to grow

The UK's Medtech sector is one of the fastest-growing in the world, with significant investment and advancements in areas such as robotics, AI, and precision medicine. Thanks to government funding initiatives and a highly skilled workforce, the UK is fast becoming a global hotspot for Medtech startups. It's no surprise that London, with its world-class ecosystem for technology and startup companies, is leading the way in the Medtech sector, attracting top talent and investors from all over the world. With the presence of world-renowned universities and research centers, the UK's capital has become the hub of innovation, particularly in the Medtech industry.

As the sector continues to expand, it's crucial for Medtech companies to focus on developing solutions that can tackle the most pressing healthcare challenges faced by society. The pandemic has created significant pressures on the NHS , leading to a backlog of almost 5 million people waiting for routine treatments and surgeries. It's more important than ever to create innovative technologies that can help address the backlog and improve patient outcomes.

Despite these challenges, projections show promising growth for the UK's Medtech sector. Market research predicts that the UK's medical technology market revenue will reach ￡14.05bn by 2023, with medical devices being the largest segment. Furthermore, it's forecasted to reach ￡16.33bn by 2027, with an annual growth rate of 3.83%. Although the US medical technology market is expected to be much larger, with an annual growth rate of 4.34%, the UK is only 0.51% behind in this forecast. The UK is a major player in the global Medtech industry, with a well-established and growing market.

Innovation and R&D will fuel the growth of UK economy

In a rapidly changing global economy, it is more important than ever for countries to focus on innovation and research and development (R&D) to drive economic growth. The UK is no exception, and in 2023 Q1 speeches by government officials have highlighted the critical role that innovation and R&D will play in the country's future.

As Grant Shapps recently pointed out in a speech at the Confederation of British Industry (CBI) British Business Leaders Lunch, innovation and R&D are crucial to the UK's economic growth. With a highly skilled workforce, world-class universities, and a supportive government, the UK has the potential to lead the way in technological advancements and become a major player in the global economy.

Chancellor Jeremy Hunt also stressed the importance of innovation in a speech at Bloomberg , highlighting the government's commitment to "a decade of innovation". He noted that the UK has a strong track record of innovation and announced increased funding for R&D, including a ￡7 billion increase in R&D spending by 2024-25. This investment will support the development of new technologies, products, and services, as well as attract global talent to the UK's research institutions and businesses.

These initiatives are already paying off, with recent projections from the Office for Budget Responsibility (OBR) showing that R&D investment will help to drive economic growth in the UK over the next decade. The OBR's March 2023 Economic and Fiscal Outlook report forecasts GDP growth of 2.1% in 2022, rising to 2.8% in 2023, due in part to increased investment in R&D and innovation.

The UK's focus on innovation and R&D is not only important for driving economic growth but also for solving some of the world's biggest challenges, such as climate change, healthcare, and social inequality. By investing in science and research, the UK can develop new technologies and solutions to address these challenges, creating a better future for all.

Medtech must get onboard with UK Net Zero targets

As the UK government pushes towards its net-zero carbon emissions target by 2050, the National Health Service (NHS) has pledged to become carbon neutral. This is a welcome move, but achieving this goal will require tremendous effort and collaboration from all stakeholders.

According to the independent review on Mission Zero, the NHS is responsible for approximately 5% of the UK's total carbon footprint, making it one of the largest contributors to greenhouse gas emissions in the country. To achieve its net-zero target, the NHS must make significant changes to the way it operates and delivers healthcare services.

One of the major challenges that the NHS faces is maintaining its purchasing power while also complying with new regulations aimed at reducing the carbon footprint of medical devices. The implementation of the Medical Device Regulation (MDR) has introduced new requirements for medical devices, which could potentially lead to a shortage of compliant devices. This could negatively impact the NHS's ability to purchase the devices it needs to deliver healthcare services.

The theme of net-zero runs through every policy released in Q1, and government officials' speeches have highlighted the role that the NHS will play in achieving this target. The UK's Net Zero Strategy outlines the government's commitment to achieving net-zero, and it has identified the NHS as a key stakeholder in achieving this goal.

The NHS has already made significant progress towards its net-zero target, with numerous initiatives underway to reduce its carbon footprint. However, there is still a long way to go, and the challenges that the NHS faces are significant. Medtech companies must collaborate with the NHS to ensure that they can continue to deliver innovative products and services that are needed to deliver healthcare services while also complying with new regulations aimed at reducing the carbon footprint of medical devices.

UK Medical Device regulatory landscape will continue to change

The medical device regulatory landscape is constantly evolving, and it will continue to present challenges to the MedTech industry. Staying up-to-date with the latest regulations is essential for companies to continue bringing their products to market. The recent EU MDR extension has highlighted the challenge of medical device manufacturers' potential for CE certificates to lapse, which could lead to reduced availability of compliant devices on the market.

This issue is particularly significant for the UK, where the Medicines and Healthcare products Regulatory Agency (MHRA) is responsible for regulating medical devices. The MHRA is currently exploring potential partnerships with international agencies to provide faster and easier approvals for medicines and technologies. By 2024, the MHRA will have established a fully operational fast-track approval process for the most impactful new medicines and technologies, including cancer vaccines and AI-based therapeutics for mental health.

However, there is still much work to be done to ensure that the medical device industry is able to navigate the changing regulatory landscape. The UK government's Medical Technology Strategy recognises the importance of ensuring that the regulatory environment supports innovation while also protecting patient safety. In the 2023 Spring Budget , the MHRA received additional funding to implement and enforce the new regulatory requirements for medical devices. This funding will help the agency to establish more efficient and effective regulatory processes, which will ultimately benefit the Medtech industry and patients.

The first quarter of 2023 brought significant developments for the Medtech and technology industries, with government policies and regulatory decisions shaping the landscape. Despite the challenges, the UK's Medtech sector continues to grow, and with the right investments, it has the potential to address some of society's most pressing healthcare challenges. It is crucial for Medtech companies to adopt sustainable practices and collaborate with stakeholders to achieve a sustainable future. As we enter the second quarter, we can expect the industry to continue to evolve rapidly, and it is important to keep a close eye on the latest developments.