Leading player in the European Life Science market
In recent years AddLife has, through several strategic acquisitions, developed from a Nordic into a European player.
The European expansion strengthens both existing and new supplier relationships and creates a larger internal network with increased opportunities to sell our own and other companies’ products in new markets. Sales in markets outside the Nordic region accounted for 51 percent of net sales in 2021, compared to 35 percent in the previous year.
Interest in diagnostics and viral research has increased during the COVID-19 pandemic. This has been reflected in increased sales in the Labtech business area, while the Medtech business area has experienced limited positive impact from pandemic-related sales. Medtech has been affected by canceled surgeries and challenges with testing and installation of homecare products.
Throughout the COVID-19 pandemic, AddLife has supplied large volumes of products to the healthcare sector for treatment of COVID-19. Since the first quarter of 2021 sales varied based on the spread of infection and restrictions in our communities.
According to Medtech Europe , the European medtech market is worth about EUR 140 billion and has grown in total, more than 2 percent per year over the past decade. The market is fragmented and of Europe’s 33,000 medical technology companies, 95 percent are small and medium-sized enterprises. Large international players and smaller niche companies usually sell products under their own brands and control the entire chain from production to distribution. The market also has distributors who, like AddLife, offer products from several manufacturers.
In Europe, an average of about 11 percent of GDP per country is spent on healthcare services. Just under 8 percent of the total cost of healthcare services is spent on medical device products. Common to all AddLife markets is that both medical care and academic research are primarily financed by public funding. This means that most transactions are carried out through procurement. In many markets, public procurement procedures are becoming larger in scope, often with long contract periods. This situation may be a threat for smaller players while also creating new opportunities. Currently, there is also a trend shifting from price-based evaluation towards models in which sustainability, quality of service and support are gaining in significance for the customer.
The pandemic is impacting the sector and industry in the long-term
Healthcare services in Europe are dominated by public providers in a regulated sector that sometimes can be perceived as conservative. During the pandemic, the sector had to adapt and act with short notice to meet the changing need for care.
The increased focus on healthcare services has led to more and major funding initiatives and increased health budgets in most countries, as well as from the EU. Many of these efforts have been directed at pandemic-related areas such as vaccination programs or expanded opportunities for testing the population for COVID-19. Other areas are also covered, such as increased digitalisation and initiatives to reduce healthcare queues.
In 2021, healthcare queues continued to increase, especially in elective surgery. From a political perspective, several countries in Europe have initiated financial support to increase the number of surgeries, although the delayed care looks different from country to country and will differ in time. For example, around six million patients were in line for elective healthcare services in the NHS in England in November 2021. Of these, 300,000 patients had already been waiting for over a year, compared to a queue of 1,600 before the pandemic. The UK has decided to invest GBP 8 billion over the next three years to increase capacity and reduce healthcare queues .
Growing, aging population
Although population growth in Europe is expected to decrease over the next decade, falling by just under 1 percent by 2050, the number of people over 65 will continue to increase. The proportion of people above the age of 65 in Europe is expected to reach about 29 percent in 2050, compared with the current 20 percent of the population. In the Nordic countries, population growth is expected to reach 9 percent by 2050 and the proportion over 65 will then be 25 percent. One reason for this increased longevity is that many people are staying healthy as they age. At the same time, however, the proportion of patients with chronic illnesses and/or multiple diagnoses is increasing. All factors considered, a larger and older population is expected to increase the need for healthcare and social care, which will be a challenge in most countries.
Source: Eurostat 2021 
One effect of the increased need for elderly care is that the homecare area will grow as healthcare providers streamline their operations. Homecare can encompass areas such as medical care, diagnostics and treatment at home, as well as various assistive technologies, housing adaptation and monitoring. This gives the patient the opportunity to live at home longer, which is expected to provide a higher quality of life for the individual.
Digitalisation enables new business opportunities
There is a clear trend towards digitalisation in the market that has accelerated during the pandemic. For example, there has been growth in connected patient monitoring, connected laboratory instruments and web-based analysis services. Digitalisation provides new ways to collect, share and analyse data, driven by development in information and communication technology, as well as the availability of smart phones, tablets and laptops.
Patient-centered care is made possible by digital tools, which mean that the patient personally plays an active role in their own treatment, thereby gaining a better understanding of their condition and relevant treatments.
Digitalisation also affects healthcare provider procedures for purchasing and implementing services. Purchase-related service such as training, user support and product maintenance will therefore become increasingly important.
Growing application area for diagnostics
The diagnostics market is growing in several areas because of technological developments that have made testing methodology both less expensive and easier to use. Another area of interest is the individual tests that identify a certain genetic marker to determine what medicine will be most effective, for example for a cancer patient. This is known as personalised medicine. Yet another example is the growing need for rapid tests to address issues related to increasingly widespread antibiotics resistance. In clinical chemistry, prices for standardised tests at central laboratories are subject to high competition. Meanwhile, a decentralisation trend is shifting towards point-of-care analyses, which are often performed on a hospital ward or at an outpatient care facility. This decentralisation is expected to continue within an array of niches, where the need for rapid test results is crucial for continued patient treatment. Diagnostics will eventually also be made possible long term, through home monitoring, where patients take certain tests and share them digitally with the healthcare provider.
Product and market requirements
There are a number of entry barriers in the market, such as public procurement requirements, stringent demands for product safety, regulatory compliance and monitoring. In Europe, medical device products are regulated by EU directives and regulations. Products must be CE-certified before they can be marketed in Europe.
New EU regulations were implemented in 2021 for medical devices, MDR. For In Vitro Diagnostic products, the regulation, IVDR, will be phased in from 2022. For some products, this may require renewed testing for CE-certification, which may be both expensive and challenging for small operators with limited resources and lead to larger global players opting out of smaller, local markets.
In the Nordic region, there is greater focus on sustainability in the sector. Unlike many other markets, procurement processes often refer to a Code of Conduct. Customers require suppliers to comply with international declarations and legislation in areas such as human rights, child labour or corruption. More detailed sustainability criteria influencing the assessment of products in procurement are still only sporadic, but requirements are expected to increase over time.
 Medtech Europe, The European Medical Technology Industry in figures 2021
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