The roller coaster ride of the past twelve months has left many in the healthcare sector looking for a smoother experience. As the European Union (EU) and the United Kingdom (UK) attempt to move forward from a year significantly impacted by an inflationary environment, geopolitical conflict, and political rhetoric, a host of EU policies and regulations coming into effect, and country-specific initiatives underway in 2023 have done little to boost confidence in the sector.

The drive towards cost-containment, improved quality and safety, and equity of access in healthcare – all while trying to keep pace with innovation in digital health, medical devices, and pharmaceuticals – has resulted in regulations, policies, and revamped funding structures that will have broad and lasting impact across European markets.

In the EU, the implementation of the EU Medical Device Regulation (MDR) and In Vitro Diagnostic Regulation (IVDR) has brought about changes in medical device and diagnostic product approvals, ensuring higher standards of safety and quality. This ongoing implementation along with expanding Substances of Human Origin (SoHO) Regulation aims to align policy and regulatory standards with the fast-paced innovation that is occurring in the sector, adding administrative and potentially clinical efficacy hurdles for existing and new products.

In the pharmaceutical sector, the proposed EU Pharmaceutical Reform seeks to foster innovation in areas of unmet therapeutic needs, and to achieve more equal access to pharmaceutical products across EU Member States. However, the reforms have been extremely unpopular with the pharmaceutical industry due to the proposed changes shortening Regulatory Data Protection (RDP) periods, limiting potential lifetime revenue generation for a drug.

The roller coaster year extends beyond EU-wide reforms, as country-specific initiatives have also unsettled the industry. In Germany, initiatives are underway to curb spending on pharmaceuticals, restructure the hospital payment system, realign staffing ratios and salaries, and increase scrutiny of privately owned suppliers of government-funded healthcare services. France is also tackling hospital payment reform while expanding telemedicine reimbursement, whereas Spain is focused on reducing drug costs and has been considering limiting outsourcing of government-funded services to private providers.

As with any industry, change and disruption can bring about opportunity. The numerous policies and regulations that have been in process across the year will begin to take effect, providing clarity of impact for investors in the sector. Understanding the “stroke of a pen” implications of EU and country-specific healthcare policies and regulations has never been more important in making healthcare investment decisions, a point that Marwood Group drives home in every client interaction. While the public funding of healthcare services can make healthcare assets an attractive investment, it’s the interpretation and implementation of EU and National policies at the regional, and sometimes local level that can determine the level of success or failure of an investment.

As we enter into the final months of 2023, our Compass publication aims to act as an important reference document to chart a path through the complex healthcare waters of the EU and UK. We hope our insights into key and ongoing developments affecting the regulatory, policy, and funding environment across Europe and the UK helps to support decision-making in the sector and support a smoother experience in 2024.

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