The U.S. Medtech Industry’s Irish Accent is Getting Stronger

by Michael Lohan,
Head of Medical Technology & Healthcare Services at IDA Ireland

While the medtech industry is thriving, with sales increases of 10% or more in 2016 over the previous year, this bullish market outlook is tempered with the usual bearish concerns over competition, funding, effective R&D and other business issues. With Europe and the United States being the key markets that medtech firms focus on, many US firms are finding that having an Irish operation not only delivers many advantages but gives their products access to a lucrative market and plentiful opportunities to drive value.

Companies such as Boston Scientific, Abbott, Vistakon, Medtronic, Teleflex, Stryker, Cook Medical, Zimmer Biomet, DePuy Synthes, Hollister and BD are just some of the existing medtech firms with expanding Irish operations. Ireland now employs more than 32,000 people in medtech, which is the highest number in Europe as a percentage of a population. One quarter of the world’s diabetics — 30 million people — rely on an injectable device manufactured in Ireland, while half of all ventilators used by acute hospitals worldwide are also made there. Meanwhile, three quarters of global orthopedic knee products were produced in Ireland.

There are several important reasons why American medtech companies have been choosing Ireland as their European base of operations.

1. Manufacturing expertise

Ireland has become a center of excellence for biomanufacturing devices and drugs with a “right first time” approach. The country’s supportive attitude toward medtech was appealing to Stryker, which recently opened a global technology development center and a centralized additive technology manufacturing hub in Cork, where the company will be doing ground-breaking work in 3D medi-printing. Additive manufacturing has the potential to radically alter the sector through the delivery of advanced complex products and Ireland is at the center of this revolution with proven capabilities spanning research to commercialization.

Ireland has also received more Shingo gold awards for operational excellence than any other country outside the US. These were achieved by Abbott Vascular, Abbott Diagnostics, Johnson and Johnson (DePuy Synthes) and Boston Scientific. Innovation at these Irish sites have provided valuable knowledge transfers for American company’s global supply chains.

2. Access to R&D facilities and trained workers

A good example of Ireland’s accommodation of medtech is seen in the National Institute for Bioprocessing Research and the Centre for Research in Medical Devices (CÚRAM) which develops innovative implantable ‘smart’ medical devices. These implants are designed and manufactured to respond to the body’s environment and to deliver therapeutic agents, such as drugs, exactly where needed. CÚRAM offers companies the ability to have clinical collaborations, with industry partners and hospital groups, to enable rapid translation to the clinic. There are many US multinationals currently working in CÚRAM including Boston Scientific, Stryker and Arch Therapeutics.

These workers are joining a rich pool of educated individuals in Ireland, whose university system is ranked in the world’s top ten. Besides being the only English-speaking member of the EU after the impact of Brexit, Ireland has an international talent pool due to the country’s appeal to tech workers and its business-friendly immigration policies.

3. Data analysis skills

Ireland is already considered the data center of Europe because so many data giants like Google, Facebook, LinkedIn, Twitter, Microsoft, Apple and others are located there. Such a critical mass of expertise and trained workers will be needed as data increasingly becomes a key part of medtech, whether for analysis of how devices are working implanted in a body or capturing data flowing from the devices themselves given the rise of wearable medical devices like “smart” glucose monitors.

Analyzing data is essential for medtech firms and Novartis is a good example of how Ireland can accommodate that objective. At the Novartis Analytics center in Dublin, the company’s 600 workers are crunching data from clinical trials around the world, then pushing it out to sales forces and digital marketing channels in their native languages.

Now and in the future, data will be sent to and from the medical devices themselves. For example, a new hip — 3D metal-printed, perhaps — can monitor the patient’s activity level and deliver reminders of proper behavior such as increasing activity to ensure healthy adoption of a new hip. The rise of smart devices will require high levels of data capture and analytics, which means finding facilities and workers with such skills.

An industry with inexhaustible demand like medtech, where people always need innovative healthcare solutions, must also focus on business issues to maximize success. In the US, companies weigh the challenges of improving their R&D, yet expanding production efficiently, find qualified staff, navigate regulations and better reach key markets? Many US medtech companies are looking to Ireland to solve these challenges. Addressing these concerns is why 13 of the top 15 U.S. medtech companies have chosen facilities in Ireland, with more than 300 medtech companies currently doing business in the country, up from 50 in 1993.

4. Collaborative environment

Competition is certainly a big part of industry but Ireland also promotes collaboration as a better way to create solutions and increase sales. This involves collaboration between companies, academia and research organizations. An example of this is an innovative insulin “pen” developed in Ireland by Intel that use a low-power IoT chip and other technology to quickly, easily and accurately deliver injections with data saved and communicated with healthcare professionals.

In biotech, several Irish technology centers are dedicated to collaboration such as the Synthesis and Solid State Pharmaceutical Centre (SSPC) at the University of Limerick. It involves collaboration between 22 industry partners, nine Irish research organizations and 12 international academic collaborators. The SSPC currently supports over 250 active members across academia and industry nationally and internationally. Similarly, the Biopharma Industry Technical Group is a unique collaboration between SSPC, NIBRT and key players in the biopharma industry with the goal of developing innovative single-use bioprocessing solutions.

5. Financial advantages

In addition to an attractive corporate tax rate of 12.5%, Ireland provides an R&D tax credit of 25%, which coupled with direct grant supports available from IDA Ireland enables medtech & biotech companies undertaking qualifying R&D to significantly reduce costs. Such a powerful incentive is appealing, in particular, to medical device OEMs since the industry spends more than most others on R&D: an average of 7% of revenue, according to Kalorama Information.

6. Regulatory advantages

According to analysis by Emergo Group, regulatory issues — whether existing regulations or anticipated changes to them — continue to be the biggest business challenge for medical device companies of all sizes. While American medtech companies doing business in their home country obviously need to get FDA approval, those with an Irish operation aimed at the European market have advantages.

Besides quicker approvals — one third as long — Europe’s CE Mark — the FDA equivalent — also involves a less costly process and some researchers have noted how European regulators are more responsive to clinical needs than their American counterparts. American companies can therefore gain CE Mark and begin marketing their device and generating revenue in Europe while going through the FDA approval process.