Health and medical to the United Kingdom

(Last updated: 05 Feb 2008)

Trends and opportunities

The market

Healthcare in the UK is dominated by the state-run NHS, one of the largest organisations in Europe. The costs for UK healthcare provision is as follows:

• National Health Service (NHS) free of charge – A$190 billion
• private – A$34 billion
• complementary – A$1.5 billion
• palliative (mostly charities) – A$0.8 billion

(Various sources, including Key Note and NHS)

A NHS Institute of Innovation & Improvement was launched on 1 July 2005. The Institute will encourage modernisation, innovation and learning in the NHS. It will also help companies bring useful, new products to market and encourage their uptake by the NHS and social care services, leading to increased purchasing of beneficial new healthcare products, treatments and procedures.

A section of the Institute called the National Innovation Centre (NIC) will focus on linking companies with appropriate partners – for example in clinical practice, academia or finance. They will provide practical advice on how best to get innovative medical technologies and products taken up by the NHS.

The NIC will be based with the NHS Institute, on the campus of the University of Warwick but will operate as a network to benefit from the expertise that exists around the country.

The British Government has encouraged the private sector to become involved in the building and management of hospitals, something that is opposed by the main unions. There are also many companies involved in consulting to the NHS.

Due to the cost of providing healthcare on the NHS, the UK has a policy of encouraging self-medication. This is clearly demonstrated by NHS Direct, a telephone advice service staffed by qualified personnel. At the same time, people are becoming more aware of the benefits of healthy living and are looking towards preventative and complementary approaches.

Medical devices are classified as any product that is used for the diagnosis, monitoring, prevention or treatment of an illness or handicap. Australian companies have been successful in supplying surgical instruments and clinical devices to the NHS.

The UK market for medicines is split into prescription-only - POM (A$16 million) or non-prescription over-the-counter products (A$11 billion).

The British Government has set up the National Institute for Clinical Excellence (NICE), to decide which costly medicines to use in the NHS. At the same time, more products are being released from POM to General Sales List status so they can be bought without prescription.

Opportunities

Australian companies have already been successful in the UK with software and medical devices, but there are broader opportunities. Considering the cost of transport and competition from third countries, the main opportunities for Australia are in high value-add products:

• surgical instruments
• licensed medicines
• teaching aids
• hospital fittings and fixtures

The NHS is going through a period of unprecedented change. There are opportunities in the service areas of:

• administrative management of hospitals and clinics
• provision of care services for the elderly
• restructuring of healthcare services
• development of new facilities
• provision of online services

These areas cut across many industries, including ICT, clinical services, construction and education. The key is improved treatments for patients and improved cost-effectiveness and efficiency in the delivery of healthcare.

Tariffs, regulations and customs

The National Health Service (NHS) Purchasing and Supply Agency must approve all products and services used in the NHS before purchase. In addition, there are specific approval processes and licences for medicines and medical devices.

It is important to check these carefully and to take advice from:

• your distributor
• NHS Purchasing and Supply Agency
• Medicines and Healthcare products Regulatory Agency (MHRA) 
• Associations, eg. Association of the British Pharmaceutical Industry
• a specialist consultant

It is illegal to offer any product for sale or use that has not undergone the correct approval process.

The way products are packaged, sold and/or produced will dictate the tariff(s) that apply. The UK is part of the harmonised trade system of the European Union (EU). Common Customs Tariff is applicable to goods from non-EU countries, including Australia. Most duties are ad valorem, based on the GATT Valuation Code (approximate CIF value).

Before shipping any goods to Europe, you should obtain a written customs duty ruling from the UK customs service. These rulings are called Binding Tariff Information (BTI). Getting a BTI is free and will prevent any conflict over customs or excise duty.

Industry standards

The Medicines Act controls medicines in the UK. The MCA makes case-by-case decisions on whether products should be licensed. The MCA Borderline Section has further information on specific products. Tel: (44 020) 7273 0602.

The MCA recommends appointing a regulatory consultant to help apply for a license. The licensing procedures are very onerous and vary between EU member states. You can find a consultant by contacting the Association of the British Pharmaceutical Industry, which will recommend suitably qualified and experienced members.

The European Medical Devices Directive controls the approval of medical devices. This is administered by the UK Medical Devices Agency. Medical devices covers a huge range of products, all of which must be approved and CE Marked before they can be offered in the UK or Europe.

Marketing your products and services

Market entry

Due to the size and complexity of the NHS, the reality is that it can sometimes be difficult for companies to gain access to this immense market.

Austrade is making considerable effort to give medical devices and systems companies access to this market to improve care for patients and service users.

Depending upon your product in the UK health and medical sector, your end-customers may include:

• National Health Service (NHS) hospitals and doctors
• Charities
• Private clinics and practitioners
• Specialist retailers
• The general public

You will almost certainly need a UK-based partner to help you access these customers. A UK partner will not only develop the customer base, but can also help ensure that your products meet the regulations. Some market entry strategies include:

• Appointing a distribution partner to handle importing and customer liaison
• Managing the customer base from Australia and find a fulfilment company to warehouse and ship to the customers
• Setting up a UK office
• Sending one of your staff to the UK as a representative
• Sharing distribution with another Australian company – preferably with a synergistic product range
• Manufacturing your products in the UK under contract or license
• Undertaking a joint venture with a UK company

Of these options, the most effective is probably appointing a distribution partner. A UK company will understand how to best present your products, comment on changes to your packaging and will understand how to place the product in the market. These skills take time to acquire and demand exposure long-term to the market.

UK-based companies expect to have long-term relationships with their suppliers, working together to achieve sales targets, thus Australian exporters should consider the UK as a long-term strategic market.

Smaller distribution partners often specialise in a particular product sector and may service customers on a regional basis or may supply only certain types of customer.

The NHS has a system of centralised buying for the 400 hospital trusts and health authorities in the UK. This is organised by the NHS Purchasing and Supply Agency. The agency has specialist buyers for every conceivable product, from food to surgical implements, and facilities management to pharmaceuticals.

The Purchasing and Supply Agency will act proactively, seeking out new products, and will also react to suggestions and requests from individual hospitals. They also have a small business advice service, which helps smaller companies through the rigours of the system. This means that you or your distributor can either approach the agency direct, or work with a specific healthcare provider. The end result will be the same.

The major drivers in the UK healthcare sector are life, cost, and time saving. Almost all new products and services will meet one or more of these criteria. Establishing credibility is vitally important.  This is demonstrated by:

• Recognised clinical trials
• Reference sites or case studies
• Publication in learned journals
• Compliance with UK and EU standards

Your promotional material should clearly illustrate these issues, as well as proving technical information about the product or service. Pricing information should be provided separately. It should also be in UK pounds where possible, or at least in Australian dollars with reference to a current exchange rate.

E-commerce is crucial to the NHS Purchasing and Supply Agency and several schemes are in operation. These include: 

• Electronic tendering
• Electronic contract notices
• CD-ROM catalogues
• Paperless electronic requisitioning
• Purchasing cards

Links and industry contacts

Health and medical-related resources

Association of British Healthcare Industries – www.abhi.org.uk
Association of Social and Community Alarm Providers – www.asap-uk.org
Association for the Laboratory Supply Industry – www.martex.co.uk/blwa
Association of the British Pharmaceutical Industry – www.abpi.org.uk
Association of Contact Lens Manufacturers – www.aclm.org.uk
British Anaesthetic & Respiratory Equipment Manufacturers Association – www.barema.org.uk
British Consultants Bureau – www.bccb.org.uk
British Dental Health Foundation – www.dentalhealth.org.uk
British Dental Trade Association – www.bdta.org.uk 
British Healthcare Trades Association – www.bhta.com
British In Vitro Diagnostics Association – www.bivda.co.uk 
Disabled Info – www.disabledinfo.com
Disabled Living Foundation – www.dlf.org.uk
Elderly Accommodation – www.housingcare.org
General Medical Council – www.gmc-uk.org
Health Source – www.healthsourceuk.com
Health Centre Online – www.healthcentre.org.uk/hc
Oxford Centre on Population Aging – www.sociology.ox.ac.uk/oxpa/oxpaindex.html
Private Health Information – www.privatehealth.co.uk
Proprietary Association of Great Britain – www.pagb.org.uk
Royal College of General Practitioners – www.rcgp.org.uk 
Royal College of Physicians – www.rcplondon.ac.uk 
Royal College of Surgeons –  www.rcseng.ac.uk
Surgical Dressing Manufacturers Association – www.sdma.org.uk 
United Kingdom Home Care Association – www.ukhca.co.uk

Government, business and trade resources for the United Kingdom

British Standards Institute – www.bsi-global.com
Department of Trade and Industry – www.dti.gov.uk/sectors/clothing.htm
European Union Customs – http://europa.eu.int/comm/taxation_customs/customs/index_en.htm
European Union Portal – http://europa.eu.int/index-en.htm
HM Customs & Excise – www.hmrc.gov.uk/home.htm
Trading Standards – www.tradingstandards.gov.uk
UK Government Portal – www.ukonline.gov.uk
UK Statistics – www.statistics.gov.uk
UK Trade and Investment - www.uktradeinvest.gov.uk

Media 

Health News – www.health-news.co.uk
Dot Pharmacy – www.dotpharmacy.co.uk
Patient UK – www.patient.co.uk/misc-news.htm
Department of Health Newsdesk – www.doh.gov.uk/newsdesk