A description of the Swedish Medical Technology environment. September osec.ch

Transcription

1 A description of the Swedish Medical Technology environment September osec.ch 1

2 The Swedish Medical Technology environment. Title. Language. A description of the Swedish Medical Technology environment Opportunities and challenges English Number of pages. Content. 31 The scope of this report is to describe Swedish Medical Technology environment. The report summarizes and covers topics such as: Swedish Health Care Environment and Medical Technology Market, Regulatory Environment and Accessing the Swedish Market. Author. Anders Ternander Medmind AB Barnhusgatan 16 S STOCKHOLM SWEDEN 2

3 Table of Contents. 1 Executive summary 4 2 Introduction to Sweden General facts and figures Demographic trends Swedish Health Care Environment Health Care System Shared responsibility Health care decentralized Shared medical care How care is organized More private health-care providers Benchmarking leads to improvement Eight regional hospitals Six health-care regions Health Care Financing System Case-costing system The Nordic DRG-system How the DRGs are used in Sweden Reimbursement of medical device High-cost threshold Financing Medical Technology Health Care Policy Care within 90 days Free choice in health care Swedish Medical Technology Market A history of innovation Number of employees Market Volume and Development Sales on the Swedish Medtech market Imports and Exports Imports Exports Major Manufacturers Short facts Swedish companies Regulatory Environment in Sweden CE marking CE marking in EEA and EFTA countries An introduction to Swedish rules and regulations One procedure for all EEA-countries Approval process Determine the classification of the device Implement quality management system (QMS) Prepare a technical file Appoint an authorized representative Third-party assessment - Notified Bodies Prepare a Declaration of Conformity Post-marketing surveillance and safety reporting Recast of the Medical Device Directive Combination pharma/device products Necessary Licenses for import and distribution Import Distribution IP protection and patent issues Intellectual property rights in Sweden Industrial property rights Registration authority Protecting intellectual rights abroad Applying for a patent Applying for design protection Applying for trademark protection Accessing the Swedish Market Marketing channels Tenders Procurement of innovation Cost pressure and cost-benefit assessment Distribution channels From a County Council perspective From a company perspective Government agencies and associations The Medical Product Agency Health technology assessment The association for Medical Technology Center for Medical Technology Assessment Other authorities and organizations Events Trade shows Annex Sources and references Reports Numbers and exchange rate

4 1 Executive summary Although Denmark, Norway and Sweden are all independent nations, their health care systems and reimbursement practices are very similar. In all of these markets, county- and municipal-level authorities play a large role in administering health care services, as well as setting local health care budgets and overseeing procurement of medical devices and supplies. As Europe and Sweden in particular continues to deal with the demographic challenges posed by an ageing population, demand will increase, as older people and those with chronic diseases are the major users of medical technology. Other important health related problems are overweight and obesity are probably the most important factors leading to increased prevalence of type-2 diabetes and heart diseases. Health care services in Sweden are overwhelmingly tax-financed, through county and municipal taxes. Since tender business is common in Swedish health care, it is important that it is handled correctly and that tax resources are used in an efficient and proper way. The Swedish clinicians have a strong focus on clinical evidence and have set a high bar for clinical evidence. Even though international expertise is respected it is very important to have a local champion. In general new technologies have to be funded out of existing hospital budgets. This means that if the new technology requires additional funding then the hospital department has to apply for additional funds to be able to use the new technology. Applications are made to the hospital management and benefit from the submission of a business case. There is no separate reimbursement for medical devices in Sweden. All medical devices, excepting custom-made devices and devices intended for clinical investigations must bear the CE-marking in order to be permitted to be placed on the Swedish market. Labeling and instructions for use shall be written in Swedish. This is irrespective of the device being used by a patient or by trained staff or if the device is used in a hospital or in an accommodation. Challenges and opportunities Ageing population and the way we live One of the most important factors from a patient perspective is demography development and general health trends. We all live longer and we require a reasonable quality of life as we age. We have become more impatient and we are therefore also prepared to invest in elective treatments as a way to improve our function and our mobility. Cost-benefit assessments As governments introduce fiscal measures to reduce national deficits, healthcare expenditure will come and are under pressure. Therefore, the demand on industry to demonstrate the cost/benefit assessments of its products will continue to grow. Health Technology Assessment (HTA) will increasingly be used to appraise and quantify the value of innovation. It is important that the wider benefits of medical technology are acknowledged and recognized as a cost-effective way of delivering extra healthy years to citizens, assisting them in contributing to society for longer Market access Over the recent years, pharmaceutical companies in the Nordics have reduced their staff substantially in a bid to counteract challenging market conditions. Some companies have cut the sales force entirely; others are working to build up new skills in market access teams. To a certain extent similar things are happening for the medical technology industry. Given the changes in health service structure and the creation of a new set of stakeholders, medical technology companies need to take other different approaches to access the market. Irrespective of approach, companies must deal with a new set of Key Opinion Leaders (KOLs), who range from hospital management, senior hospital clinicians to civil servants within the Medical Products Agency (MPA) and Pricing Authorities. With several KOLs, including physicians, civil servants and patient advocates, to consider, it has become clear that simply being able to identify these individuals is not enough. Organizations need to understand how these individuals interact, their motivations which will often vary across different roles and their relevance at different times in the product lifecycle. 4

5 2 Introduction to Sweden 2.1 General facts and figures Figure 1: Map of Europe Area: 174,000 sq mi ( km²), the third largest country in Western Europe Capital: Stockholm Population: 9.4 million inhabitants Currency: Swedish krona (SEK) Languages: Swedish; recognized minority languages: Sami (Lapp), Finnish, Meänkieli (Tornedalen Finnish), Yiddish, Romani Chib Form of government: Constitutional monarchy, parliamentary democracy Parliament: The Riksdag, with 349 members in one Religion: In practice, Sweden is very secularized. The Church of Sweden is Evangelical Lutheran; co-exists with many other beliefs Life expectancy: Men 79 years, women 83 years Most important export goods: Machinery, electronics and telecommunication, paper, pharmaceuticals, petroleum products, iron and steel, and foodstuffs Most important imported goods: Electronics and telecommunication, machinery, foodstuffs, crude oil, textiles and footwear, chemicals, pharmaceuticals and petroleum products chamber 5

6 2.2 Demographic trends Life expectancy in Sweden continues to rise. In 2010, it was 79,1 years for men and 83.2 years for women. More than 5 percent of the Swedish population are aged 80 or over, which is a large proportion compared to rest of the EU member states. This can be partly attributed to falling mortality risks for both heart attacks and strokes. However, the number of children born in Sweden has been increasing steadily since the end of the 1990s, a shift that will reduce the relative proportion of elderly residents. Table 1: Proportional age distribution in Sweden Source: Statistics Sweden Chronic diseases requiring monitoring and treatment and often lifelong medication place great demands on the health care system. Sweden has relatively few smokers: almost 85 percent of Swedes don t smoke. Since Sweden is faced with one of the largest elderly populations proportionally in the world, healthcare provision remains a high government priority. Consequently, the government is heavily promoting preventative care in an effort to reign in ever rising healthcare expenditure. The care providers are faced with a growing capacity problem in the coming years, as a result of the demographic development and obesity related problems. An increased demand for both quality and quantity will result in a need for changes. Thus, it is both a challenge and an opportunity for the Medtech industry to provide the care providers and patients with products that help reducing healthcare costs 6

7 3 Swedish Health Care Environment 3.1 Health Care System Common structural features of the health care systems of the Nordic countries are the tax based funding, the decentralized organization where regions, counties and municipalities with local political governance are in charge of health care. However, there are also differences in organization of health care as can be seen in table 1. Table 2: Health care responsibilities in the Nordics Nursing/Home Primary Specialized care Health care care Sweden Municipality Counties Counties Denmark Municipality Regions Regions Norway Municipality Municipality Regions Shared responsibility In the Swedish health-care system, responsibility for health and medical care is shared by the central government, county councils and municipalities. The Health and Medical Service Act (Hälsooch sjukvårdslagen, HSL) regulates the responsibilities of the county councils and municipalities. The act is designed to give county councils and municipalities more freedom in this area. The role of the central government is to establish principles and guidelines for care and to set the political agenda for health and medical care. It does this using laws and ordinances or by reaching agreements with the Swedish Association of Local Authorities and Regions (SALAR), which represents the county councils and municipalities Shared medical care Sweden is divided into 290 municipalities, 18 county councils and two regions, Västra Götaland and Skåne. (One municipality, Gotland, an island in the Baltic Sea, has the same responsibilities for health care as the county councils.) There is no hierarchical relation between municipalities, county councils and regions, since all have their own self-governing local authorities with responsibility for different activities. Around 90 percent of the Swedish county councils work involves health care, but they are also involved in other areas, such as culture and infrastructure. Sweden s municipalities are responsible for care for elderly people in the home or in special accommodation. Their remit also includes care for people with physical disabilities or psychological disorders. Municipalities are also responsible for providing support and services for people released from hospital care as well as for school health care. Figure 2: County councils of Sweden Health care decentralized Responsibility for providing health care is decentralized to the county councils and, in some cases, municipal governments. County councils are political bodies whose representatives are elected by their residents every four years on the same day as national general elections. In line with Swedish policy, every county council must provide residents with good-quality health and medical care, and work toward promoting good health for the entire population. County councils are also responsible for dental care for local residents up to the age of 20. 7

8 3.1.4 How care is organized Most health care today is provided in primary care units where a variety of health professionals doctors, nurses, midwives, physiotherapists and other staff. This simplifies care for patients and fosters teamwork. Patients are able to choose their own doctor (see also chapter 3.3.2). There are special clinics for children and expecting mothers, as well as youth clinics that offer advice on a range of issues, including family planning. times, patient opinions and costs, and the effects of factors such as lifestyle, food and the environment on health, allowing comparisons between counties. Improvements can already be seen in several areas. One is mortality related to stroke or heart attack, where a decrease for both men and women of more than two percentage points can be seen in almost every county. The percentage of patients who survive breast cancer has also been increasing More private health-care providers Private health providers are a small minority in all Nordic countries. In Sweden, however, the number of private health care providers has increased rapidly in the last few years. The county councils regulate the private health care market in the way that a private health care provider must have an agreement with the county council in order to be reimbursed. That is to guarantee that patients are covered by the same regulations and fees that apply to municipal care facilities. If the provider does not have any agreement or if the private provider does not use the regulated fee tariff, the provider will not get reimbursed and a patient will have to pay the full charge to the provider. The charge can also be paid by a private health insurance if the patient has one Benchmarking leads to improvement Local taxes are the basis for funding health and medical care, which means opportunities for economic expansion are strictly limited. Cost restrictions mean it is essential to get the most out of existing resources. Benchmarking between county councils has led to improvements, but significant decentralization has meant that there is often a lack of national data. For this reason, the National Board of Health and Welfare and the Swedish Association of Local Authorities and Regions are developing a model to compare targets and evaluate results. The aims include: Providing a better platform for public debate and political decisions Making it easier for county councils and municipalities to manage and streamline health care Providing the general public and patients with more accessible information Statistics based on national research have already been produced on issues such as the quality of health care, patient safety, waiting Eight regional hospitals Sweden has 60 hospitals that provide specialist care, with emergency services 24 hours a day. Eight of these are regional hospitals where highly specialized care is offered and where most teaching and research is based Six health-care regions Because many county councils have small service areas, six health-care regions have been set up for more advanced care. This is coordinated by the Committee for National Specialised Medical Care (Rikssjukvårdsnämnden) within the National Board of Health and Welfare. The counties own all emergency hospitals, but health-care services can be outsourced to contractors. For preplanned care, there are also private clinics from which counties can purchase certain services to complement those offered within their own units. This is an important component of the effort to increase access. Figure 3: Health care regions Umeå Uppsala/Örebro Stockholm/Gotland Linköping Gothenburg Malmö/Lund

9 3.2 Health Care Financing System The costs for health and medical care account for about 9 percent of Sweden s gross domestic product (GDP), a figure that has remained fairly stable since the early 1980s. Costs are on par with those in most other European countries. The bulk of health and medical costs in Sweden are paid for by county council and municipal taxes. Contributions from the national government are another source of funding, while patient fees cover only a small percentage of costs Table 3: Funding of Swedish Health care Case-costing system The general system when deciding the budget for each hospital and department is a case-costing system, which is applied in all county councils. The case-costing system is very well developed, and essentially collects the same costs within the framework as a DRG-system (see also chapter 3.2.2). Budgets are based on activity multiplied by the cost per case, but it is then up to the hospitals to allocate the resources internally. Case-costing means that the budget is based on the activity rate and uses resources from past accounting periods. Sweden has different systems for health care funding for different counties, but they all follow three kinds of models. In the first traditional model there is a fixed reimbursement, which the hospital receives for financing their costs. Then there is another part based on the DRG-system, where reimbursement is on the basis of the activity performed. In the two newer goal-oriented models reimbursement is controlled and the healthcare system can influence and stimulate specific activity such as the selection of treatment methods and waiting list initiatives. Although goal-oriented reimbursement usually represents only a small percentage of total funding, it is large enough to incentivise hospitals to achieve the set goals The Nordic DRG-system The DRG (Diagnosis related Groups) system was developed in the US during the 1960s for making it easier to group together patients with similar diagnoses that also use a similar amount of resources. The original purpose was to use DRG for describing the hospital activity and serve to as a quality control. Later it was developed, in cooperation with the Health Care Financing Administration, HCFA, to be a tool of resource allocation and cost control. Nord-DRG largely resembles HCFA-DRG but is modified to agree with Nordic diagnose coding (ICD-10, International Classification of Diseases) and treatment coding (NCSP Nomesco Classification of Surgical Procedures). However, the differences between HCFA-DRG and NordDRG have grown greater through the years. In essence, the DRG is a system for secondary patient classification, which makes the description of case mix (that is the mix of patients in a hospital) more lucid than if the activity were to be described by thousands of diagnosis and treatment codes. The primary patient classification means that a patient is, based on available information and direct observations, primarily categorized into a category according to the current classification system. In this case, ICD-10 (diagnose codes) and NCSP (procedure codes). The procedure codes serve as a systematic tool of registering what treatments have been used in Health Care. Within surgery, this coding has been used for a long time and since 2006 medical procedures (non-surgical) are also possible to use. In Sweden these codes are mandatory in national reporting in patient data base. A patient is later arranged into one DRG depending on the data from one or several primary classifications. A DRG (a patient only has one per care occasion) is decided based on a main diagnosis code, as well as possible codes for secondary diagnosis and procedures (see Figure 4). The main diagnosis is the medical condition that after investigation has proven the primary reason for care. If more than one medical condition appears as part of the main diagnosis, the one that requires more resources should be chosen. The main diagnosis directs the DRG-grouping to the correct DRG. Relevant additional diagnoses should be called secondary diagnoses. Also age, sex and way of discharge (another emergency or 9

10 death) is important information. The grouping is complicated and is therefore done by a computer program. discussed above, case-costing means that the budget is based on the activity rate and used resources from the past period. Figure 4: Classification flow Reimbursement of medical device The Dental and Pharmaceutical Benefits Agency (TLV) decides which medicines and medical devices will be granted reimbursement status and included in the high-cost threshold (see below). The medical devices needed by a patient to be able to take a medicine and be able to check their levels of medication are 100% reimbursed and free. Examples of this are devices for diabetes and inhalation aids for asthma patients How the DRGs are used in Sweden Follow up and Statistics In Sweden, DRGs are usually used to describe the activity of the hospitals. DRG is for example one way to describe the mix of patients, making comparisons of case mix in different hospitals or county councils possible. Since DRG is constructed with regard to use of resources, cost efficiency can also be compared using DRG. 18 of the 21 county councils or regions use DRG for statistical purposes such as the ones described above. Use for activity-based funding Another major area of use of DRG is as an activity-based funding adjustment for financial reimbursement of both care of patients from other counties (applied in all county councils) and patients from the same county council (applied in 4 of 21 county councils). When DRGs are used as a funding adjustment for patients from the same county, the hospital is paid as a whole; each department does not get paid directly for the health care they have provided. In 3 of the 4 county councils who have this reimbursement system, only a part of the cost (20 or 50 %) is directly replaced as a form of performance compensation. The rest is taken from the funds budgeted on last year s activity. The treating physicians are aware of how much treatment cost but not as a result of having to deal with this kind of activity-based funding. Use for budget planning DRG is only used as a tool for planning budget in 7 counties; however, all county councils use some kind of case-costing system when deciding the budget for each hospital and department. As Medical devices for stoma patients are subject to the same reimbursement rules as for medicines. The state pays part of the cost and the patient also a share depending on where the patient is in the high-cost threshold. TLV decides which medical devices shall be reimbursed and thereby be part of the high cost threshold. In order to be included in the high cost threshold a medical device shall have a price set by the TLV High-cost threshold The high-cost threshold refers to the system where a medicine is tax-subsidized, and the state pays a portion of the costs. The Dental and Pharmaceutical Benefits Agency is the government body which determines which medicines are eligible for reimbursement status and included in the high-cost threshold. The high-cost threshold includes numerous types of medicines as well as medical devices, contraceptives, and other products. Certain over-the-counter medicinal products are also included in the high-cost threshold Financing Medical Technology In general, the cost for a product has to be covered within the hospital budget and these budgets are established within the county council. That is why, if the product is expensive and the related costs will be additional to the total cost for the entire treatment procedure, extra funds must be applied for and the ordinary budget increased. There s no special mechanism or formal application procedure to apply for additional funding. Where possible, the decision is taken within the hospital department. If new technology can be accommodated in the departmental budget then the decision can be made by the department itself. If extra funding is needed the 10

11 management of the department need to go further up in the hospital hierarchy and present a cost benefit scenario. In such cases having a solid business case is as important as having good clinical trial evidence. If there are data from clinical trials published and designed in real life setting, it will not be necessary to have local clinical trial data. 3.3 Health Care Policy The Swedish healthcare system gives everyone who lives or works in Sweden equal access to heavily subsidized healthcare. As mentioned earlier, the system is taxpayer-funded and largely decentralized, and performs well in comparison with other countries at a similar level of development. Medical results are good relative to investments and despite funding restrictions Care within 90 days Waiting times for pre-planned care, such as cataract or hipreplacement surgery, have long been a cause of dissatisfaction. As a result, Sweden has introduced a health-care guarantee. In 2005, the county councils and central government agreed to introduce a health-care guarantee. This means that no patient should have to wait more than 90 days once it has been determined what care is needed. If the time limit expires, patients are offered care elsewhere; the cost, including any travel costs, is then paid by their own county council. The situation has improved since the health-care guarantee was introduced. Collated waiting times as of December 31, 2008, showed that 75 percent of patients had received treatment within 90 days. In January 2010, all county councils had introduced what is known as the primary choice system in primary care. This was adopted by the Riksdag (Swedish parliament) in February The system entails patients choosing whether they would prefer to go to a private or public health center. All care providers that meet county council requirements are entitled to start a health center that is reimbursed with public funds from the county council. For instance, they must provide social workers or psychologists, ordinary home health services, and emergency services until 9 pm. All care centers are paid the same amount for each patient seen. Lately, free choice in more specialized care has also been introduced in several county councils. That includes areas such as: Cataract surgery Hip and knee surgery Obesity surgery To improve matters further, the central government, in consultation with the Swedish Association of Local Authorities and Regions, decided to allocate an extra SEK 1 billion (EUR ) each year starting in 2010 and through to For county councils to get a share of the billion kronor, they must meet the requirement that 80 percent of their patients receive care within the allotted time. They must also submit information about waiting times to a new national database Free choice in health care People in Sweden have had free choice in primary health care since This means that patients can seek treatment anywhere in the country. 11

12 4 Swedish Medical Technology Market 4.1 A history of innovation Sweden has a proud history in medical technology. The gamma knife, dental implants, the implantable pacemaker and the dialysis machine are examples of groundbreaking innovations. These and other innovations have helped build leading companies, as well as an industry that has been a strong contributor to the Swedish economy. Although these innovations date back a number of decades, they still represent a big part of the sales in the Swedish MedTech industry. 4.2 Number of employees In 2009, there were about 480 medical technology companies in Sweden and that had at least 5 employees and at least SEK 1 Million SEK (EUR ) turnover. Approximately 180 of these companies had their own production of medical technology in Sweden (not including start-ups) 4.3 Market Volume and Development The Swedish medical device industry is an attractive business which has demonstrated high growth and good margins consistently over the past years. From 1999 to 2005, the medical device industry in Sweden achieved consistent GDP contribution growth of 10% per year driven by employee growth of 4% per year and an overall productivity improvement far above most other industries. The Swedish device industry is, opposed to the pharmaceutical industry, characterized by several small and medium sized enterprises, accounting for approximately 80% of all companies. Revenues among the largest Swedish Medtech companies during 2009 were approximately EUR 9 billion. However, the major parts of the revenues are concentrated to a few actors and account for almost 90% of the total sales Table 4: Total number of employees in Sweden Table 5: Total turnover in billions EUR 9, , ,8 8,6 9, ,4 8,2 8,5 8, Among approximately 480 companies with 5 employees and SEK 1 million (EUR ) turnovers Among approximately 480 companies with 5 employees and SEK 1 million SEK (EUR ) turnovers Source: Swedish Medtech 2011 Source: Swedish Medtech 2011 Examples of major product areas are: Medical devices Orthopaedic implants In vitro diagnostic products Respiration Patient aids Sterilization 12

13 Table 6: Sales split between Swedish Medtech companies Sales on the Swedish Medtech market The Swedish Medtech market was valued at > EUR 2 billion in 2009, measured of the total value of sales from domestic as well as foreign based companies. Table 8: Swedish Medtech market by product area 2009 Source: The Swedish Medtech industry in an international perspective - Teknik och Tillväxt 2010 Table 7: Estimated sales split by segment Source: The Swedish Medtech industry in an international perspective - Teknik och Tillväxt 2010 The Medical Devices expenditure in Sweden is approximately 5.3% of total health expenditure, equal to EUR 160 per capita, and 0.7% of the world market and 0.5% of Sweden s GDP. The market is expected to increase at a CAGR of 2.4% per annum over the next few years Table 9: Average Medical Devices expenditure in Europe (in % of total healthcare spend) Source: Action MedTech Source:

14 4.4 Imports and Exports The Swedish medical device market is primarily supplied by imported products. Despite that, Sweden is continuing to have a positive balance of trade in terms of Import vs. Export. Table 10: Distribution between imports and domestic supply, Exports Sweden s medical device industry is mainly focused on export. Approximately 90% of all products manufactured in Sweden are exported and thus exposed to global competition. The export has grown by 7.1% (CAGR) in recent years. However, in 2011 St. Jude Medical moved its production outside of Sweden which reduced export significantly. The Swedish export value was in 2010 approximately EUR 2.9 billion including in-vitro diagnostics. Table 12: Swedish exports (goods) by segment Source: Swedish Trade Council Imports The Swedish import value was in 2010 approximately EUR 2.3 billion including in-vitro diagnostics Table 11: Swedish imports by segment Source: Swedish Medtech 2011 Table 13: Export destinations The majority of manufactured products are exported to European countries. Source: Swedish Medtech 2011 Source: Swedish Medtech

15 4.5 Major Manufacturers 4.6 Short facts Swedish companies Sweden accounts for less than 1% of the global market for medical devices. However the Swedish medical device companies account for approximately 4% of the global market revenues, fairly high considering Sweden s small share of the world economy. One explanation for Sweden s relatively high share of the world MedTech market is the attractive characteristics of the Swedish Healthcare system notably when it comes to research and development. It has a reputation of being well organized and evidence based. Another enabler is a well-established Swedish national registration system which allows for unique patient follow up in long term clinical prospective- and retrospective studies on medical devices. Table 14: Major Swedish Manufacturers Company Turnover (K EUR) 2010 Getinge AB Gambro AB Elekta AB Mölnlycke Health care AB Nobel Biocare AB Permobil Etac AB Sectra AB Atos Medical AB Human Care Table 15: Major global companies in Sweden Company Turnover (K EUR) 2010 GE Healthcare St. Jude Medical AB Fresenius Philips Abbott Dentsply Thermo Fischer (Phadia) Johnson & Johnson AB M Bayer Note: Turnover numbers from

16 5 Regulatory Environment in Sweden 5.1 CE marking Regardless what market a medical device company chooses to introduce their product, regulatory authorization is required. In Sweden and Europe, companies must place a CE mark on their product before it can be sold. Figure 5: The CE mark 5.2 CE marking in EEA and EFTA countries The CE marking is mandatory for medical technology in the European Economic Area (EEA), consisting of the 27 Member States of the EU and the EFTA countries Iceland, Norway, Switzerland and Liechtenstein. The three countries; Norway, Iceland and Liechtenstein although not officially part of the European Union, are signatories to the European Economic Area (EEA). Switzerland is neither an EU member nor a signatory to the EEA, but they have transposed the Medical Devices Directives into their national law and these countries require CE Marking. The CE-marking of a medical device is information primarily directed towards the Competent Authorities (In Sweden the Medical Products Agency) and indicates that the device complies with the requirements in relevant legislation. The CE marking is also mandatory for all products made in third countries (non-member states) sold in the EEA. In that case, the importer has to make sure that the manufacturer outside the EU has taken the necessary steps that allow him to affix the CE marking. Figure 6: EEA and EFTA countries All medical devices, excepting custom-made devices and devices intended for clinical investigations must bear the CEmarking in order to be permitted to be placed on the market. The CE-marking does not mean that a device has necessarily passed assessment by a Notified Body or that the device is of a certain quality or possesses certain characteristics. It is the manufacturer who affixes the CE-marking to a device and whose responsibility it is to demonstrate compliance with the requirements. The assessment of class I (non-sterile and/or non-measuring) devices is performed by the manufacturer himself. If the device has a higher classification, the assessment must be performed in collaboration with a Notified Body. (see also chapter and 5.4.4) Source: 16

17 5.3 An introduction to Swedish rules and regulations The safety standards must be high for all medical devices. The devices shall be safe and reliable and well suited for their intended purposes. Sweden has brought its legislation in line with the safety requirements in force within the EU concerning testing, certification and labelling of medical devices. use and the mechanisms of action of the device, not the construction or the user, controls if the device becomes a medical device. The "manufacturer", in this context, is the (legal) manufacturer who has the responsibility for the product safety. Medical Products Agency is the Competent Authority in Sweden and the role of Medical Products Agency is determined by the Medical Devices Act and Ordinance. The Agency s responsibilities include putting statutory regulations into place and monitoring their effectiveness through market control One procedure for all EEA-countries The purpose of EU s product directives is to ensure safety and performance of the devices and at the same time enable free trade. The medical device directives different parts have been transposed to a Swedish Act (SFS 1993:584), Ordinance (SFS 1993:876) and Regulations LVFS 2001:5, LVFS 2003:11 and LVFS 2001:7 from Medical Products Agency, respectively. The implementation is almost a word by word transformation of the directives texts.. According to the Swedish Medical Devices Act and the Medical Devices Ordinance a medical device shall achieve its intended purpose as designated by the manufacturer and involve no unacceptable risk to patients, staff or third parties. The Act and the Ordinance have been adopted to the European Community Medical Devices Directives that successively have been introduced into the European Economic Area, EEA, comprising the 27 EU-countries, Iceland, Liechtenstein and Norway. In respect of active implantable medical this means that with effect from 1 January 1995 these devices must be certified, i.e. have been assessed by a Notified Body, before being placed on the market. Certification of medical devices subject to LVFS 2003:11 began on 1 January 1995 and have been mandatory from June 14, These devices are grouped into classes (I, IIa, IIb and III) determining the requirements for certification (see also chapter 5.1.5). The certification requirements for in-vitro diagnostic medical devices are mandatory from December 8, Devices which have undergone certification will be provided with the CE-mark. It is important to study the definitions (compare the Act) of the medical device and the manufacturer, respectively. The intended 17

18 5.4 Approval process In essence there are six fundamental steps in the European regulatory approval process. The approval of medical devices is governed by the European Council Medical Device Directive. This directive does not cover in vitro diagnostics, which are regulated under Council Directive 98/79/EC. Active implantable devices are covered under Council Directive 93/385/EEC Determine the classification of the device The EU classifies devices into four categories. Devices are categorized according to a series of rules set out in the Council Directive. The higher classifications apply for devices that are more invasive and more risky. Classification depends on a series of factors including how long the device is intended to be in continuous use, whether the device is invasive or surgically invasive, whether the device is implantable or active, and whether or not the device contains a therapeutic substance. The manufacturer should thus perform a risk analysis of the design, method of manufacturing and intended use of the device. Swedish companies often use the Medical Product Agency (MPA) for advice on the classification of their products. Several companies disclose that they have had a good dialogue with the staff of the MPA but experience at the same time that the MPA takes unnecessary height when they offer advice on the labeling of an innovative product. Greater flexibility has been requested in the system where innovative products are not by definition being classified as high-risk products. Figure 7: Schematic regulatory segmentation/product classification Implement quality management system (QMS) Manufacturers must ensure that their manufacturing processes align with the ISO standard otherwise they will not be permitted to apply the CE marking to their device Prepare a technical file Every product manufacturer is required to maintain a technical file with documentation that demonstrates the product complies with the appropriate Directives (Medical Devices Directive 93/42/EEC) Appoint an authorized representative For manufacturers not based in the EU, an authorized representative must take responsibility for CE marking. This person must be based in the EU, their address must appear on the product, and they must take responsibility for compliance with CE marking. The authorized representative is not a person who imports a product to sell it in the EU. The authorized representative is someone who has a formal contract with the manufacturer to represent them within the EU Third-party assessment - Notified Bodies For medical devices the QMS and Technical file must be audited by a Notified Body (excluding class I (non-sterile and/or non-measuring), to demonstrate that the device complies with the requirements. The assessment must be independent and impartial. Notified Bodies are appointed by each member state under their appropriate national regulations to conduct third-party conformity assessment procedures on a product or its production processes, as required by the Directives, so that it can be approved for CE marking. The EU has established a system of Notified Bodies that are responsible for certifying products on behalf of the EU. Each EEA country sends a list of the Notified Bodies under its jurisdiction to the EU Commission, and their names are published in the Official Journal of the European Communities, under the relevant directive It is sufficient for the manufacturer to carry out a conformity assessment on his devices in one country in order to gain access to the entire EEA market 18

19 Swedish Notified Bodies that have been designated by SWEDAC (Swedish Board for Accreditation and Conformity Assessment) fulfil these requirements. Criticism has also been expressed that current regulations are not transparent enough and the information between the countries has been unsatisfactory Prepare a Declaration of Conformity The Declaration of Conformity is a formal, signed document that indicates a product meets the requirements of the Directive. It permits regulators to identify who is responsible for a product and what the person claims to have done to permit CE marking. This document is to be issued by the manufacturer Post-marketing surveillance and safety reporting Manufacturers are required to monitor the performance of their products once they are marketed. A manufacturer must have in place a safety system to track any adverse events or product malfunctions that affect the health and safety of a patient, user or anyone else. This includes death or serious injury, as well as events that could have led to such an outcome. A senior expert at the Swedish Medical Products Agency believes the biggest change of the framework is that the current directive is replaced with regulations. This means that member states should no longer set their own laws in this area. 5.5 Combination pharma/device products Today s advanced products sometime combine device with pharmaceuticals (e.g. drug-eluting stents). These combination products require a more advanced regulatory approval that includes notifying bodies that are able to ensure safety of both the device component (CE mark) and the drug portion (The European Medicines Agency) with advice from relevant pharmaceutical authorities. Something which manufacturers in particular have to observe is that labelling and instructions for use (user s manual, display, voice etc.) shall be written in Swedish. This is irrespective of the device being used by a patient or by trained staff or if the device is used in a hospital or in an accommodation. Service manuals might be in English Recast of the Medical Device Directive In 2008, the European Commission held a public consultation concerning the recast of the medical devices directives. This was complemented by a public consultation held in 2010 regarding the technical aspects of the revision of the In vitro diagnostic medical devices directive. This process shall lead to a fundamental revision of the existing directives in order to simplify and strengthen the current EU legal framework for medical devices. The current system is not transparent enough and allows for different interpretations in the member states. Many times, the device companies are not offering a new drug but are offering a new delivery route and the safety of this new route must be assessed. A combination product typically will have an unpredictable road ahead for regulatory approval in the EU. Compared with pure devices, more sophisticated in-house clinical and regulatory skills are required to tackle the combined pharmaceutical approval process. The result is most likely longer timelines. Exactly how the new rules will look like is not clear, but Eucomed, the European trade association for the medical technology company, has identified six points that it thinks are priorities. Among other things, wants to see clearer rules on the notified bodies. Today there are about 80 different notified bodies in Europe and there has been criticism toward the major differences in how they assess and approve products. 19

20 5.6 Necessary Licenses for import and distribution Import Normally, as an importer you pay customs duties and VAT at the time of the import. Sometimes you may have to pay other customs duties, anti-dumping duty or other taxes and charges. You have to determine the correct commodity code to find out the duty rate and other taxes and charges that you might have to pay. The code also indicates whether an import license or permit is required for a commodity or not. All commodity codes can be found in the Customs Tariff, which is a systematic index of goods, commodity codes and customs duty rates. In the Customs Tariff you can find the general directions which are the rules for how you should interpret the Customs Tariff. As an importer you are legally responsible for the correct tariff classification of your goods. This applies even if you employ an agent to handle the customs declarations on your behalf. However, importation of medical technology products with the purpose to sell these goods to health care in Sweden is duty free. Still, the receiver (e.g. importer) of the goods must pay the VAT to Swedish Customs. The VAT for most goods is 25 percent. (For foodstuffs it is 12 percent (except alcoholic beverages and tobacco) and for newspapers and books it is 6 percent) You estimate the VAT on the taxation value. The taxation value for VAT is equivalent to the customs value plus the duty, tax and other fees that you have paid. In the taxation value you have to include freight and insurance costs. The VAT can be reported as input VAT in the VAT return or income tax return. In addition, the partnering company that is receiving the goods in Sweden must have its corporate VAT number registered with the Swedish customs Distribution The medical device regulatory framework contains with one exception, no special requirements on the registration of importers / distributors of medical devices. The exemption applies needles and syringes, where there are certain requirements for notification to the Swedish Medical Products Agency (MPA). The MPA is the control authority of syringes and needles covering trade and introduction of syringes and needles. Trade with needles and syringes may be conducted only by the person who by law may trade with pharmaceuticals or otherwise holds an authorization from the MPA to trade the goods. Importation can be made by the person who is legally entitled to deal with such goods or otherwise holds an MPA permit for entry IP protection and patent issues Sweden and the Nordics together with Switzerland are among the world s foremost intellectual property protecting countries, according to World Economic Forum. The ranking covers 142 countries in regard to their intellectual property protection including anticounterfeiting measures. Table 16: 1 Finland 2 Singapore 3 Switzerland 4 Sweden 5 Luxembourg 6 Denmark 7 France 8 New Zealand 9 Netherlands 10 Ireland 12 Norway Intellectual property rights in Sweden According to Swedish law, intellectual property (IP) refers to creations of the mind - inventions, literary and artistic works, symbols, names, images, and designs used in commerce. They are protected against infringement through IP regulations. The main Swedish IP laws are: Copyright act Patent act Trademark act Trade names act 20

21 5.7.2 Industrial property rights A patent is a sole right to exploit an invention. Nobody may use your invention commercially, such as by manufacturing, selling or importing it, without your permission. The patent generally applies for 20 years. A national patent applicable in Sweden costs on average SEK An annual fee is charged for patent maintenance. A trademark is a distinctive feature which differentiates your goods or services from others, or accentuates your product with its name or a graphic symbol. The trademark may consist of any symbols that can be reproduced graphically such as letters, numbers and figures. For sole rights to a trademark, you have to register or establish it. Registration must be renewed every 10 years. The symbol and trademark sign which are sometimes displayed have no legal effect in Swedish law. By design they mean a product's appearance. Design protection, is a question purely of protecting the form or appearance of a product. A product is something (an object, packaging, assembly, graphic symbol or typeface) which is produced via an industrial or manual process. This does not include computer programs. Graphic symbols may for example be the design of a website or a computer icon Registration authority The Swedish Patent and Registration Office (PRV) is the authority that grants protection for and the sole rights to technical ideas, trademarks and designs. Before registration can take place, you must be sure the idea you want to protect is really innovative Protecting intellectual rights abroad If you have registered a trademark in Sweden, you can apply for international trademark registration via PRV. The application will be forwarded to the International Office of the World Intellectual Property Organization (WIPO).In the application, which has to be in English, you indicate which countries you want the registration to cover. Intellectual property rights are still chiefly protected by national rather than EU laws. Defending them in each individual EU country can be complicated and costly, so further harmonization is desirable Applying for a patent It is important before submitting a patent application to establish a confidentiality agreement with anyone you present your idea to. An example of a confidentiality agreement can be obtained from: The Swedish Inventors' Association ALMI Företagspartner Patents are national rights delivered by the national patent offices. There is no single patent granting protection throughout the EU or internationally. One alternative is to invest directly in an international or European application, bypassing the national Swedish application route. That can be advantageous, for example, if you are sure that your invention is new and that your market for it is not just in one country. An international application (PCT application) can lead to protection in around 140 countries, including Sweden. A European application (EPC application) can get you protection in over thirty countries in Europe, including Sweden. A European patent application can be made in several languages in the eolf client software which is administered by the European Patent Office (EPO) Applying for design protection When you want to protect the appearance of a product or a part of it, you normally apply for design protection. This is given only if the design is the result of a creative process. Sole rights to the design apply for one or more 5-year periods, up to a maximum of 25 years Applying for trademark protection To register a company name, contact the Swedish Companies Registration Office (Bolagsverket). The PRV trademark register contains details of who owns a given trademark in Sweden and how extensive the registration protection is. 21