Four questions to answer before entering a European market

A CE mark gives a medical device access to every country in the European Union, but it does not make the device sell in any of them. Each country still has its own hospitals, procurement rules and payers. Companies that treat Europe as one market usually find this out after they have signed a distributor and waited a year for the first order.

Before committing money to a new country, I find it useful to answer four questions: does the device fit what clinicians already do, where is the demand, what will buyers pay and how, and who controls the purchase decision. They apply in Europe as much as anywhere else.

Product: does the device fit what clinicians already do?

The first question is whether the device fits into existing treatment pathways in that country. A device that requires a new workflow, extra training or a different referral route faces a longer adoption curve, however good the clinical data. It also matters what clinicians use today. A device is compared with the product already on the hospital shelf, not with the best product in its category.

Procedure: where is the demand?

The second question is how many of the relevant procedures are performed, where, and whether that number is growing. Procedure volumes vary widely between countries of similar size, and so does the split between public and private hospitals. A country with fewer procedures concentrated in a handful of university hospitals may be a better first market than a larger country where volume is spread across hundreds of small sites.

Price: what will buyers pay, and how?

The third question is how the device will be paid for. In some countries it is reimbursed through a specific tariff, in others it is bought from a hospital budget through a tender, and in many it is a combination of both. Knowing the price range of recent tenders, and whether price or quality carried more weight in the award criteria, prevents a company from entering a negotiation with a price the market cannot accept.

Place: who controls the purchase decision?

The fourth question is the one most market reports leave out. A purchase decision usually involves several people: the surgeon who wants the device, the department head who owns the budget, the procurement team that runs the tender and sometimes a regional or national body that sets the framework. The channel the order goes through matters too. In some countries a distributor with existing hospital contracts is essential; in others a manufacturer can bid directly.

Why the order matters

These questions are best answered before choosing a distributor, not after. A distributor's strengths only make sense against a clear picture of where the demand is, how the device will be paid for and who decides. With that picture, the choice of partner becomes much easier, and so does the conversation with investors about how long it will take to see revenue from the new market.

If you are deciding which European markets to enter first, I am happy to talk it through. You can reach me through the contact form on this site.