The Danish Healthcare Market – a holistic overview

Two of the biggest industries in Denmark are healthcare solutions and medical products, including pharmaceuticals and biotechnology. Combined, these industries account for well over 50 percent of all Danish exports. This blog article provides detailed insights into the Danish market environment, market drivers and purchasing processes.

Market Environment

Healthcare authorities have focused much of their efforts on meeting future demands in terms of innovative healthcare solutions, putting the healthcare system years ahead of many other countries (technologically speaking).

Additionally, the World Bank ranks Denmark as 5th in the world in terms of being easy to do business in.

Information technology has been a major incentive for change within the Danish healthcare system, both in terms of organization and increased efficiency. Tele-health projects are wide spread through Denmark’s e-health portal.

Additional areas where healthcare technology has been implemented include: Establishing a more patient centric approach, chronic patient support, assisted living and healthcare/social service integration projects.

Healthcare innovation is also a focus and priority area for many Danish Universities and research institutions. Areas of development include:

  • Hospital logistics
  • New Hospital construction concepts
  • Tele-health

This makes Denmark a perfect test market for international companies that want to bring their products from a development stage to a stage of full implementation.

Furthermore, the Danish regions offer support and a variety of incentives to international companies wishing to establish partnerships.

In terms of the medical device industry, Denmark can be described as a small sized consumer with an estimated market worth of about € 2.6 in 2014.

Denmark is one of Europe’s leaders in terms of medical technology. This has been accomplished with a particular focus on research and development, design and innovation, market testing, high-tech production and good user-producer relationships.

The largest product groups are: medical and diagnostic equipment, followed by surgical instruments and appliances as well as ophthalmic instruments.

In recent years the sale of disposable products like syringes, needles, catheters and other medical disposables has increased significantly.

Denmark has many domestic device manufacturers, many of which are known on a global scale as market leaders. Domestic manufacturers are concentrated in the following categories:

  • Diagnostics
  • Orthopedic appliances
  • Prosthetic appliances
  • Hearing aids

About 85 to 90 percent of local production is exported.

Purchasing Processes and Decision-Making

The Danish purchasing process for medical equipment has a very specific structure.

Each of the 5 Danish regions has a procurement center that is responsible for the procurement of both products and services for hospitals within their area.

Regions are increasingly moving towards large scale purchasing by buying products for all the hospitals in their region at one time with a discount. This has led to:

  • A more centralized purchasing and decision making process in all five regions
  • More of the buying decisions being coordinated on a regional level

Tenders across all five regions are published on this webpage: www.regionsudbud.dk.

Potential suppliers to the healthcare sector can subscribe to specific product and service categories in order to be notified when new tenders are published. This includes all tenders in excess of kr 500,000 (€ 67.019).

The tendering process under the Danish healthcare sector is accomplished in accordance to EU regulations. In most cases, a hospital will assess their internal need for new equipment (e.g. either to increase the diagnosis capacity or to replace old equipment) and the decision to purchase will be made at regional level.

More specifically the following steps are followed during hospital purchasing:

  • At a departmental level, the hospital expresses their needs for new medical equipment to the central hospital administration.
  • The central hospital administration reports the needs to the purchasing group in the region.
  • Each region has about 20 purchasing consultants that coordinate, monitor, and evaluate the needs of the hospitals.
  • The regions report the request for new equipment to the national government, which has the final say for approval.
  • Once the equipment purchase is approved, the hospital receives the funds and directly signs a contract with the vendor.

Capital equipment in excess of kr 1 bln (€ 154 m) has to be coordinated across regions and at the national level.

Market Drivers and Outlook

The following drivers will continue to make Denmark and attractive healthcare market in the next few years:

  • Increased demand due to the aging population and changing disease patterns
  • Investments in innovation
  • Reforms resulting in the updating of hospital equipment and general infrastructure
  • Investments and focus on innovation and IT
  • A developed pharmaceutical and biotechnology industry
  • Expertise in research, development and testing

 

For further quantitative information on the Danish healthcare system and the macroeconomic climate, please look into our Business intelligence platform or order the TforG Deep Dive report for Denmark containing volumes of 620 surgical procedures in 13 specialisms.