Transforming Canada into a Global Centre for Medical Device Innovation and Adoption Position Paper

Position Paper

Transforming Canada into a Global Centre for Medical Device Innovation and Adoption

Dr. Anne Snowdon, PhD Dr. Richard Zur, PhD Jeremy Shell, MBA Originally released June 2011 at the Ivey International Centre for Health Innovation and Leadership, Richard Ivey School of Business, Western University.

Position Paper

Introduction Medical devices are a diverse group of products used to enhance the quality of patient care by restoring function and aiding in the diagnosis, prevention, treatment and management of diseases and disabilities. Medical devices improve treatment outcomes and promote less invasive procedures. In addition, they reduce patient recovery time, shorten the length of hospital stays, reduce costs and enhance health system sustainability.

This paper highlights key points from the Ivey Centre for Health Innovation and Leadership's June 2011 white paper entitled Transforming Canada into a Global Centre for Medical Device Innovation and Adoption (Snowdon, A.; Zur, R.; Shell, J.; 2011). Here we make the case that medical devices are an increasingly important tool in achieving health system sustainability through innovation. As Canada's aging population further propels health costs, presenting a greater demand on health systems, the need for innovations that contribute to system sustainability becomes greater. For the medical device industry, this pressure will create an increased demand for technologies including imaging systems, artificial joint replacements, pacemakers and blood pressure monitors - to name a few.

Furthermore, as the domestic market grows, Canada has an opportunity to become a global leader in medical device innovation and production while serving the global market. This paper identifies the strengths and challenges Canada faces in achieving the ability to capitalize on growing global medical device markets and contributes specific recommendations designed to realize the potential for strengthening this sector.

Leveraging Canada's Strengths: We identified five strengths that Canada can use to achieve growth in the medical devices sector and, in turn, contribute more to the sustainability of our health care system.

First, Canada supports a highly educated population, ranking 1st in college completion rate and 5th in university completion rate out of 17 OECD countries, which should provide a solid base of engineers, clinicians and business-people ready to bring medical device innovations to market. Despite this strength, it is clear that Canada does not live up to its potential in terms of translating those skills into commercial successes.

Second, there are six medical technology clusters in Canada, each having access to strong local universities and hospitals that are able to work with industry on research and development. A third advantage is Canada's strong track record in conducting clinical trials, holding 4.1% of all clinical trial sites worldwide. Fourth, Canada is a world-leader in health technology assessment, comparing the effectiveness and cost of new, emerging

technologies against existing technologies already on the market. Fifth, Canadian policy has begun to support the medical device sector through tax incentives for research and development.

Addressing the Challenges of Developing a Medical Device Industry in Canada: While the medical device sector could be a propitious market for Canada, the paper identified a number of challenges Canada must overcome before achieving its potential. Research and development are a critical resource for the medical device industry; however, in Canada, small medical device companies lack the resources for conducting research and must rely on partnerships with academia to successfully conduct research and develop devices for market launch.

Once products are launched into the market, the procurement processes in many Canadian health systems impact medical device adoptions primarily based on controlling costs, rather than focusing on long-term value. Current procurement and regulatory processes make it extremely challenging to launch and sell medical devices in Canadian health systems.

Strategies to Grow a Prosperous Medical Device Industry We identified four key recommendations that are strategically important to building and sustaining a strong medical device sector in Canada.

1. Build a national strategy to enable links and partnerships between the industry, government and health system stakeholders.

A national strategy is needed in order to develop a strong medical device industry with a focus on standardizing and streamlining regulation and procurement. In addition, a national strategy will focus on facilitating greater partnerships across industry, government and other health system stakeholders.

2. Create supportive environments and partnerships for the medical device industry.

Existing medical technology clusters and centres of excellence across the country need to be encouraged to become more active networks of multi-sector partnerships. These partnerships will influence academic researchers, health professionals and medical device companies to adopt programs of research and development for new medical device technologies. We also call for the creation of "innovation laboratories" in clinical settings that support proof of concept testing of new medical devices. These living-laboratories offer important opportunities to clinicians who will lead innovation in new treatment processes and health care services.

3. Reform procurement processes to accelerate the ability of medical device companies to test and launch new technologies in the Canadian market.

The domestic market for medical devices is approximately $6.2 billion, but health institutions often employ strict monopolistic procurement practices that stifle the industry and prevent "best-of-breed" technologies from coming to market. The quest for "lowest cost" goods often overshadows the health system's need for best value and greatest efficacy.

4. Reforming regulatory processes to reduce the time to market for medical devices in Canada.

The single greatest barrier to the development of the domestic medical device market is the inconsistent and cumbersome regulatory processes set out by Canada's two levels of government and their various delegated authorities. To compete on the world stage, Canada needs to overhaul its regulatory standards so quality medical devices can be quickly released into the market.

In order to be a leader in the medical devices sector, Canada must learn from successful regulatory processes in both the European Union and the United States, and work with these partners to establish a timely, transparent and clear regulation process.

Conclusion The Canadian medical devices industry can be a key driver of health system sustainability and, at the same time, gain competitive advantage in growing global health markets. Although Canada faces a number of challenges in this area, we believe that the foundation is in place to support a world-class medical device industry.

If this foundation can be built upon utilizing the strategies we identify in the paper, we believe the medical device industry could be a driver of both economic prosperity for our country and become a key factor in the sustainability of our health systems Produced by: Dr. Anne Snowdon, Professor of Strategy and Entrepreneurship and Chair of the World Health Innovation Network, Odette School of Business, University of Windsor (formerly Faculty and Chair, Ivey International Centre for Health Innovation and Leadership); Dr. Richard Zur, Senior Health Economics Research Analyst at Optum, (formerly Postdoctoral Fellow, Ivey International Centre for Health Innovation and Leadership) & Jeremy Shell, Director of Business Development, Big Digital and Principal, Meems Media (formerly Project Manager and Writer, Ivey International Centre for Health Innovation and Leadership). Original release date: June 2011.

Revised release date: January 2016.