Little more than a conversation starter a few months ago, value-based procurement is now one step nearer to making a practical difference to patients and practitioners.

Since I last wrote about value-based procurement back in September, there has been considerable momentum, and I am heartened to see the issue gaining greater exposure across both the government and the health system.

Eight months on from Lord Hunt’s influential written question committing government ministers to the delivery of “value-based procurement” (VBP) across the NHS, and it’s safe to say that the government has not only heeded the call but is also taking major steps toward revolutionising the procurement approach in the health sector.

The DHSC’s MedTech Strategy, launched in February last year, recognises the need for procurement to deliver value for money across the NHS. The strategy acknowledges that “the value of medtech products should not be considered in isolation but across the whole patient pathway” and that “lowest price does not always translate to best value.”

Up until now it was unclear whether those promises would translate into action. At the end of last year, I was invited to attend a meeting with Lord Hunt (a long-standing campaigner and advocate for VBP) and DHSC officials to represent the voice of industry and brief Government on the importance of VBP. This meeting concluded with a commitment from the government to move forward with the concept, marking a significant step toward its proper implementation in NHS purchasing decisions.

The MedTech Directorate, led by its director David Lawson, is imminently to launch a value-based procurement (VBP) methodology. The methodology contains a new approach to VBP that would put patient experience and outcomes at the heart of purchasing decisions, taking fully into account whole system costs. Placing a renewed focus on the patient, it has the potential to deliver a paradigm shift in approaches and attitudes to purchasing, moving away from item price to true value.

This is a most welcome but long overdue step, and it is refreshing to see government truly consider industry concerns. It demonstrates the importance of government-industry engagement to ensure that policies are rooted in practical realities, drawing on the invaluable insights, experiences, and knowledge of those directly involved within the health sector.

The methodology is expected to be shared with key industry stakeholders imminently, with it being promoted to the procurement sector in March. We can then expect a wider soft launch of the toolkit in the Autumn to coincide with other regulations on procurement expected around the same time. The intention would be to make the guidance mandatory from Autumn 2025.

While this development is undoubtedly positive, the challenge now turns to those on the ground, and promoting the new approach to the individuals in charge of making budget purchasing decisions at local level. There is simply not enough understanding or a standardised uptake of VBP, and the lack of a joined-up approach across the system means that the value of whole system costs has been greatly under-appreciated for many years.

The absence of central guidance has hindered the adoption of VBP, with a prevailing focus on unit costs rather than overall value. Addressing this gap in understanding and uptake is essential, and the proposed methodology will deliver a much-needed solution to clarifying the roles and responsibilities of all parties within the health system.

A recent National Audit Office (NAO) report on NHS procurement highlights the ambitious savings target of £1 billion by NHS Supply Chain from January 2022 to 2030. It is imperative for the DHSC and the NHS to collaborate to ensure that these savings consider the entire system and do not compromise patient outcomes for immediate cost reductions.

Integrated Care Systems must place patients at the core of their pathways, and the new methodology provides a roadmap for achieving this. Successful implementation will require a concerted effort from all stakeholders involved, turning the idea of VBP into a concrete reality and fulfilling the commitment to prioritise patients in decision-making processes.

The ‘Sectoral Systems of Innovation and the UK’s Competitiveness’ reports published today, assess the value-added per capita of each sector and how they compare internationally.

The reports, authored by academic experts from Imperial College London, identify technological solutions and policy recommendations for government and industry to make the sectors more innovative and increase their value added.

The main conclusions were discussed at a launch event hosted by Imperial College Business School and Imperial’s Faculty of Engineering together with Lord Sainsbury of Turville on Thursday 5 July. Policy makers, academics and media gathered to hear analysis from the reports’ authors and watch a panel discussion between industry experts.

David Sainsbury, Lord Sainsbury of Turville, former Minister of Science and Innovation (1998-2006) said: “These reports on three key industries should form a central input to a government wishing to develop a growth strategy for the country because they show how these industries could increase their global competitiveness and value added per capita.”

Professor Francisco Veloso, Dean of Imperial College Business School, said: “If the UK is to compete on a global stage, turbocharging key industries like Biopharmaceuticals, Medtech and Telecommunications needs to be a priority. That means targeted policy and support. These reports provide crucial insights into the needs, challenges and opportunities of these important sectors and the scope for industry, academia and government to work together to boost their productivity and drive economic growth.”

“These reports on three key industries should form a central input to a government wishing to develop a growth strategy for the country because they show how these industries could increase their global competitiveness and value added per capita.”Lord Sainsbury of Turville

The UK is faced with a dramatic slowdown in its rate of economic growth which is largely due to the declining rate of innovation and competitiveness of key sectors of the economy.

This problem is common across G7 countries, and many are responding with a more active industrial policy to help drive economic growth. Notably, the US Administration’s CHIPS and Science Act and Inflation Reduction Act are designed to bolster US competitiveness and national security in key sectors such as renewable energy and semiconductors.

Policymakers are increasingly interested in sector-based policies to solve the UK’s own productivity problem. This kind of targeted support in areas such as R&D, skills and finance requires a clear understanding of what is going on in specific industries and what is needed to increase their value added per capita.

Over the past year, joint teams from Imperial College London’s Faculty of Engineering and Business School have looked in detail at the competitiveness of the UK’s Biopharmaceuticals, Medical Technology and Telecommunications sectors.

Common themes across all three sector reports are the need to:

• Create more innovative, collaborative and flexible regulatory environments that can align with key markets such as the EU and US where beneficial;
• Anticipate the opportunities and challenges posed by rapid advances in digital technologies;
• Raise innovation productivity through targeted policy interventions and, where appropriate, the adoption of new business models.

The launch of the reports follows the Inaugural Innovation and Growth Conference 2023 earlier this year, which brought together policymakers, academics and industry representatives to discuss how to increase UK productivity and competitiveness.

Telecommunications

The economic impact of the telecoms sector in the UK is larger than in other OECD countries, contributing £38 billion to the UK economy (Gross Value Added). Due to its deep impact on the performance of other sectors, such as healthcare, manufacturing and entertainment, the sector needs to be viewed holistically as part of the digital sector at large.

The report authored by Dr Marika Iivari, Professor Chris Tucci & Professor Eric Yeatman, highlights the significant potential for growth and competitiveness through the adoption of 5G and future 6G networks.

It identifies three key principles: the establishment of new telecommunications innovation ecosystems, embracing convergence of the digital domain, and leveraging the role of data, platforms, and analytics beyond the telecoms sector.

The report recommends establishing a national 6G Programme in the UK for industry-academia collaboration, similar to those launched by the likes of China, EU, Japan and South Korea, to enable it to compete on a global stage.

It also urges the development of an agile and open regulatory environment that anticipates future needs, helping to both drive innovation, support business needs, and protect consumer interests.

Recommendations include considering the economic, social, and environmental impacts of telecom activities, and protecting user privacy, security, and safety should be a priority, as well as safeguarding national and digital sovereignty.

Medtech

The MedTech sector plays a crucial role, developing life-saving and life-improving technologies that are relied upon by the NHS and healthcare systems around the world.

The report, by Professor James Moore Jr and Yunus Kutlu, says that the MedTech sector shows promising growth. Despite being primarily formed of SMEs, the sector contributes £13.5B to the UK economy (GVA), with a GVA/employee of £100k. Sector GVA had a 19% compound annual growth rate between 2016-2020. The sector is fed by a strong contribution from university spinouts.

The report also highlights missed opportunities that could further enhance the sector’s performance.

Of particular concern is the uncertainty surrounding the UK’s post-Brexit medical device regulation, including challenges associated with EU regulatory practices and expertise for processing regulatory applications.

The report’s recommendations include improving the regulatory environment by finalizing the post-Brexit transition for the Medicines and Healthcare products Regulatory Agency (the UK’s regulatory body) and clarifying the fast-tracked route of devices approved by the US, EU, and Japan.

The report urges policymakers to find ways to encourage NHS adoption of innovative MedTech devices, including by working with NHS staff to identify and address unmet clinical needs.

The authors’ recommendations also include greater MedTech specific funding, the establishment of courses that include regulatory training in relevant technology areas, and the improvement of technology transfer policies and procedures so that university spinouts are well set up for success.

Biopharmaceuticals

The UK has a strong and longstanding reputation for the life sciences, two world-leading pharma companies, and many small start-ups and new players. The biopharma sector contributes a GVA of around £15 billion annually to the UK economy and 400,000 jobs. The sector has a 3.36% compound annual growth rate (CAGR) since 2016. However, there are concerns about sustaining the sector’s global competitiveness.

Pharmaceutical companies around the world are experiencing pressures associated with the declining productivity of drug R&D, tightening regulations, and downward price pressure by health systems and governments seeking better value for money. But several homegrown challenges also threaten to derail the UK’s ambitions in this sector. These include a decrease in clinical trials conducted in the NHS, which raises concerns about the attractiveness of the UK for launching new drugs, regulatory divergence between the UK and other major markets, slower access to newly approved medicines compared to some other countries, and the erosion of the drugs manufacturing sector.

Despite a strong research base and an emerging data science sector targeting pharma R&D, the UK has not been successful in growing large UK biopharma companies – the sector is dominated by small and medium-sized enterprises (SMEs) that are frequently acquired by companies from the USA or elsewhere before they scale-up.

To address these challenges and enhance the sector’s future ability to create strong and dynamic biopharma companies, policymakers should focus on regulatory clarity and harmonization, particularly with the European Union, NHS procurement practices, fostering the emerging data science sector, and considering how a high-value drugs manufacturing sector can be supported.

The report also calls for policymakers to improve financial support for the scale-up of promising small companies or risk early technologies and IP being sold prematurely to foreign companies.

Overall, the goal for government must be an integrated national life sciences R&D ecosystem which supports drug discovery, early clinical development, and uptake into healthcare, reducing R&D development cycles and costs, and ultimately producing more attractive investment opportunities.

An Auckland company that aimed to create non-invasive chronic pain treatment has been tipped into receivership by a UK-based shareholder and secured creditor.

Medical technology company Exsurgo went into receivership on June 9, placed there by Jersey-listed UK company Pinewood Investments, which had a 3.04% holding in the company.

Auckland’s Calibre Partners’ Neale Jackson and Daniel Stoneman were appointed joint receivers last week.

While the technology underpinning the Axon has been around for decades, it has traditionally been a large and cumbersome piece of kit. The Axon headset minaturised the existing technology, could be used in a patient’s home and monitored from afar by medical staff, and would have cost around $2000 per headset.

Axon was rolled out across the US, UK and UAE following clinical trials that kicked off in 2020.

The company ran a trial in the UK in 2020 where three-quarters of participants reported a reduction in pain of at least 30%. Due to the pandemic, the trial was performed virtually. The 16-patient trial showed improvements after the eight weeks of neurofeedback training that were sustained over six months.

That led to a New Zealand clinical trial in 2021. According to AUT, the Aotearoa trial was the world’s biggest EEG neurofeedback clinical trial to manage chronic pain. More than 100 people who suffered from chronic pain wore an Axon headset for 30 minutes a day over several weeks “to retrain how their brain perceives and responds to pain”, a process called neuromodulation.

Exsurgo spent $15m to build Axon and also received a $300,000 grant from Callaghan Innovation in its early stages.

UAE-based tech startup incubator Hub71 injected about $17.4 million into the company in 2023. The Abu Dhabi Ministry of Health said the technology showed “very promising” results at the time, but it had not yet been approved by the US Food and Drug Administration (FDA).

Overall the company made nine submissions for FDA approval since 2021, with the most recent filing made in January this year.

Little departed as one of the company’s directors last year but remained its majority shareholder with almost 35% of the company. Almesfer, as well as investors Yalman Khan in the UAE, David Ross in New Zealand, and Michael Wombwell in the UK, were its current directors, with Ross serving as board chair.

The company did not respond to requests for comment. Receivers Jackson and Stoneman could not be reached.

The organization and the Association of British HealthTech Industries (ABHI) are seeking reciprocal “zero for zero” tariffs between the two countries and greater regulatory convergence due to the medtech industry’s importance in transatlantic trade.

“Our industry produces innovative and essential products that save and improve lives and enable the delivery of quality health care in both countries,” AdvaMed and ABHI noted in a joint statement. “The medical technology sector is a cornerstone industry for both the U.K. and U.S. economies, driving advancements in health care, enabling health systems to function at their highest potential, driving economic growth and employment, and contributing significantly to improved health outcomes. Recent trade tensions and the threat of tariffs are posing a serious threat to our respective health technology industries and to the health systems, health care professionals and patients who depend on us to ensure timely access to treatment.”

The groups issued their joint statement as the United States and China meet this week to try to de-escalate an increasingly volatile trade war between the two countries. In his second term, President Donald J. Trump has imposed new import taxes on Chinese goods of up to 145%; Beijing has responded with levies on some U.S. goods of 125%.

Related: Could Medtech Tariff Exemptions Be on the Way?

AdvaMed President/CEO Scott Whitaker has repeatedly urged the Trump administration to exclude medical devices from tariffs, contending the increased levies would threaten U.S. medtech’s global leadership and provide an unfair advantage to foreign competitors. In a two-page editorial in The Baltimore Sun last month, Whitaker claimed tariffs would lead to job cuts at medtech companies and increased costs to taxpayer-funded healthcare programs (Medicare, Medicaid, U.S. Department of Veterans Affairs).

AdvaMed and ABHI make the same arguments in their joint statement: “Any national revenue raised through tariffs could be offset by higher costs to the taxpayers who fund those programs. Furthermore, medtech companies often operate in a generally fixed-reimbursement environment through multi-year contracts established with the tens of thousands of hospitals and clinics across the United States and the United Kingdom.”

The joint statement calls for the United States and United Kingdom to continue developing a regulatory system in which the U.K. accepts regulatory approvals and clearance from the U.S. Food and Drug Administration for medical technology, a concept known as “regulatory convergence.” Such an acceptance would expand access to innovation for U.K. patients and ensure the United Kingdom continues to be a strong global partner with the United States in medical technology research and innovation. 

AdvaMed and ABHI urge elected officials in their respective countries to adopt a zero-for-zero trade policy on medical products. “This would allow our industry to continue to allocate its resources to the greatest benefit for patients and the health care systems, ensuring the quality, innovation and availability of our industry’s wide range of lifesaving and life-improving products,” the joint statement reads.

The groups warn that tariffs are beginning to negatively impact the supply chain. However, they claim there is still time to avoid a full-fledged crisis.

“Medtech supply chain leaders across the industry are reporting that ‘procurement timelines have already slipped within the first week of the new tariffs—especially for surgical kits, diagnostic components, and imaging devices,’” AdvaMed and ABHI declare. “This is concerning news, yet there is still time to ensure it does not devolve into a crisis.”

Based in Watford, UK, Clinisupplies was acquired by Healthium in 2016. The company has a strong portfolio of products in continence care and partners with the NHS to supply quality and cost-effective continence care products.

The move marks Healthium’s strategic decision to focus on innovation and expansion in the organisation’s core growth areas. The company will continue to remain in the UK through its surgical consumables portfolio.Speaking on the strategic move, Anish Bafna, CEO and MD, Healthium Medtech, said, “The divestment of Clinisupplies is a strategic decision in line with our business priorities and gives a solid impetus to our vision of facilitating precision MedTech for every patient globally.”Paul Cook, CEO, Clinisupplies, further commented, “We are delighted that KKR have invested in Clinisupplies, we share the same ambitious growth plans for the organisation and the whole team looks forward to partnering on the next stage of our growth.

The UK medtech sector contributes approximately £13.5 billion in Gross Value Added (GVA) to the economy. Turnover currently stands at £43 billion and is projected to reach £48.2 billion by 2026. Dominated by SMEs, the sector also employs some 13,000 people. The rapid growth of the sector has brought with it both risks and rewards for many existing, mid-sized manufacturers.

Risks and rewards

The UK’s excellent R&D capabilities, particularly in areas such as genomics and digital health technologies, are world leading. In terms of the sector’s contribution (GVA) to the economy however, the UK medtech sector is ranked sixth globally, behind countries such as the US and Germany, but ahead of others including Italy and France, which means there is scope for improvement.

The two projects, which have been funded through the NIHR’s i4i Early Cancer Diagnosis Clinical Validation and Evaluation funding call, could lead to new approaches to diagnose cancer earlier in the UK and could be used in GP clinics.

In the first project, Professor George Hanna, head of the Department of Surgery & Cancer at Imperial College London and consultant general surgeon at Imperial College Healthcare NHS Trust, will lead efforts to further develop a non-invasive breath test to detect early stages of gastrointestinal cancers – including oesophageal, gastric, pancreatic, liver and colorectal – based on a sample of a patient’s breath.

The project, called PANACEA (PAN Alimentary Cancer Exhaled breath Analysis), will see researchers assess the accuracy of their test, which has been developed by Professor Hanna’s team at Imperial and collaborators, and which works by detecting and analysing subtle chemical signatures carried by the breath. The project will also study how to introduce a test into primary care settings – such as GP clinics.

AI Doctor

The second project to be awarded funding, led by Professor Brendan Delaney from the Department of Surgery & Cancer, will trial the use of Artificial Intelligence (AI) to support cancer early diagnosis in general practice.

Researchers from the departments of Surgery and Cancer, Mathematics and Computing, and the Dyson School of Design Engineering at Imperial  and from Queen Mary University of London will work with NHS Sussex Secure Data Environment and industry partners to develop a virtual doctor for general practice, using pancreatic and lung cancer as models.

A platform, developed by US medical AI start-up SOAP Health, will use a virtual assistant to take a full medical history from patients prior to their contact with a GP. This will enable AI to support GPs in diagnosis and management at the first point of contact with the patient.

Professor Brendan Delaney, a GP and Chair in Medical Informatics at Imperial’s I-X initiative, said: “From our previous research we know that suggesting possible diagnoses at the very start of a consultation enables GPs to be more accurate in diagnosis. The partnership with SOAP Health enables us to implement this approach in the NHS whilst also potentially freeing GP time and improving accessibility for patients”

UK Life Sciences Boost

The two Imperial-led studies are part of a larger package of funded projects announced this week, which the UK Government says will bring expertise from the UK life sciences sector and the NHS to tackle cancer and other life-threatening diseases with better treatments and faster diagnoses.

The funding aims to deliver tailor-made therapies and cutting-edge imaging tools for catching cancer earlier, and forms part of joint public and private sector investments to boost both the health and wealth of the nation. 

Announcing the funding, Peter Kyle, Science and Technology Secretary, said: “Cancer is a disease that has brought pain, misery and heartbreak to every family in the country, including my own. But through government working in partnership with the NHS, researchers, and business, we can harness science and innovation to bring the detection and treatment of this horrendous disease firmly in to the 21st century, keeping more families together for longer.

“The UK’s scientists, researchers and captains of industry have brilliant ideas that aren’t just going to boost our health – they’ll boost our economy too, helping to build a virtuous circle for more investment in both health and research which will ultimately drive up living standards.”

Wes Streeting, Health Secretary, said: “As a cancer survivor, I know how vital an early cancer diagnosis and the latest treatments are. This investment will not only save lives, but also secure Britain’s status as a powerhouse for life sciences and medical technology.

“When we combine the care of the NHS and the genius of our country’s leading scientific minds, we can develop life-changing treatments for patients and help get Britain’s economy booming.”

Dive Brief:

• The U.K. Medicines and Healthcare products Regulatory Agency (MHRA) said Tuesday it plans to recognize medical device approvals from comparable regulators. 
• Under the proposed policy, companies that have received authorization in regions including the European Union and U.S. will be able to use their approvals to access the Great Britain market.
• MHRA is proposing the framework and plans to finalize it alongside broader changes to medical device regulations in Great Britain, which are due to take effect next year.

Dive Insight:

Brexit required MHRA to rethink medical device pathways. Before Brexit, companies used CE marks that cover the EU to bring medical devices to market in England, Northern Ireland, Scotland and Wales, countries known collectively as the U.K. 

MHRA continues to recognize CE marks under a policy that could stay in place until 2030. In the longer term, the agency wants to expand its medtech regulatory reliance program to include authorities beyond the EU. MHRA set out its thinking in a statement of policy intent this week.

In the document, MHRA proposes recognizing regulators in Australia, Canada, the EU and the U.S. as comparable agencies. The list could grow, with MHRA in “active discussions” with the Pharmaceuticals and Medical Devices Agency about the recognition of medical device approvals from Japan. 

With some exceptions, such as custom-made devices, companies with authorizations from comparable agencies will be able to use their approvals to reduce the evidence needed to sell their devices in Great Britain. Exactly what evidence companies need will depend on the type of device.

MHRA is planning to allow some Class I devices and Class A diagnostics to come to market after receiving “a declaration by the manufacturer to an appropriate quality management system.” Manufacturers of higher risk medical devices will need to provide more information, but the barrier to entry will still be lower than if they sought a UKCA mark, the U.K. equivalent of the EU’s CE mark. 

Companies will need English language labeling and packaging, a U.K. responsible person and more to use an international recognition pathway. MHRA said it “will retain the authority to reject applications if the evidence provided is considered insufficiently robust.” 

The agency is now developing operational aspects of the framework with industry and other groups to finalize details such as who performs post-market surveillance and change assessment. MHRA is testing the framework across a range of devices of all classifications and types to establish the process. The aim is to open the international recognition pathways after the new medtech regulations come into force.