The diagnostics market has faced many challenges and changes over the last 30 years and as always those involved in running and continuing the growth of such companies respond to need and change as required. As Mark Reed explains, the in vitro diagnostics (IVD) industry not only faces challenges from continuous scientific progress but also economics, demographics and political unrest.
Scientific challenges are perhaps the easiest to face as we all have interest and investment in the research and development of faster, more accurate, and simpler diagnostics tests to offer improvements to current patient care pathways in healthcare. Recovery of development costs can of course then be an economic challenge where the market that requires the innovation and the new product, for example the NHS, is facing its own budgetary constraints and actual budget cuts; thus the time for recovery can be slow based on the possible pricing of the product in the market.
Economics also present a challenge of increased production costs in raw materials, production, packaging, and human resources. Exchange rates of course also can have a market effect here. Demographic challenge includes the ever-changing structure of any market be it national, local, international or private, and responding to these changes is essential for any company.
And then there is political unrest, or uncertainty, for the political world and ultimately the population… enter Brexit. All readers will have their own opinion of the effects of a deal or no deal scenario – no doubt it is being debated in every possible forum. Here, I would like to cover some simply truths or facts of the actual effect that we are seeing in the diagnostics industry.
Everything that we do is driven by quality and the satisfaction of internationally recognised standards: for example, ISO 13495:2016 (Medical devices – Quality management systems – Requirements for regulatory purposes). Can Brexit have an effect here for companies importing from within and beyond the EU? Yes, it can, and the effects are being seen now. There will be new requirements and changes to requirements, and that will carry an additional cost for all companies in our industry, there is no escaping that.
All products manufactured and supplied within the EU are governed by strict requirements of the International Organization for Standardization (ISO) and of course the In Vitro Diagnostics Directive and CE marking. Could any changes due to Brexit have an impact on the recognition that currently exists between the authorised body in the UK and those throughout the EU? All indications are that it can; we are just unsure as we are about so many things. We are already transitioning towards a new IVD directive within the EU; will that still be the case or will we be on our own? Maybe we will see the British Standard kite mark again.
Will it be more difficult to move products out of the UK into the remaining EU, and from the EU into the UK, regardless of deal or no deal. I think it is already, as I’m sure others are experiencing.
What about stocks? Should companies be increasing production of IVD devices in the UK, holding more stock in the UK, increasing raw material stocks in the UK, adding additional supply routes, building stocks in distribution networks across the EU, importing more from the EU? There are many challenging questions, the answers to which are all probably ‘yes’. The reason for this is because the IVD industry is under immense pressure from its customer base to do so, and also to provide additional holding stocks to the customers, who are also uncertain of the effects of any political outcome.
Many companies have seen almost a 50% increase in sales over the previous eight weeks, and it continues. Perhaps good for business now, but it is unsustainable in the long term. Will it create droughts in business later on? It has to be paid for on both sides, and there lies a financial challenge as always. The cost of meeting the increased demand has also been a factor for all to consider, not least the time needed to manage the avalanche of paperwork the uncertainty has created. Was it all worth it? We can only wait and see.
Owing to the need for brevity, this is by no means the full picture, just a simple presentation of factual experience. As an industry we are of course following the developments of Brexit very carefully and trying our very best to assess any impact on our companies and ultimately our customer market place. Of note here is that the British In Vitro Diagnostics Association (BIVDA) is pivotal in our commercial scientific world as a support organization, and offers excellent guidance at all times through political and commercial engagement.
NHS Improvement has provided information for NHS providers about the planning and contingency measures that have been put in place for the healthcare system nationally, and the additional actions providers are being asked to undertake as part of preparations for a ‘no deal’ EU Exit. This is available online (https://improvement.nhs.uk/resources/eu-exit-actions-medical-devices-and-clinical-consumables/).
About Mark Reed
Mark Reed trained as an MLSO in the NHS, and moved on to co-found Pro-Lab Diagnostics UK in 1989. He is Chairman of the IBMS Company Members Committee, holds a position on the BIVDA Executive Committee, and is heavily involved in the University Training Council school’s initiative promoting careers in science.