What is a medical device or technology?
A medical device or technology is any article, including software, intended to be used by humans for the diagnosis, prevention, monitoring or treatment of a disease, injury or physiological process. This includes products such as complex capital equipment (including operating theatre equipment and diagnostic imaging equipment such as x-ray machines and magnetic resonance imaging (MRI) scanners), high-tech advanced devices (such as Cochlear ear implants, artificial hearts and other implantable devices), simple, low-risk devices (such as bandages and walking sticks), pathology tests and diagnostic devices such as in vitro diagnostic test kits. The terms medical technology industry and medical device industry are both used widely.
A large number of medical devices are in vitro or 'in glass' diagnostics (IVDs). IVDs are instruments and reagents used in over-the-counter tests such as blood glucose meters for diabetes testing, home pregnancy kits and in pathology tests requested by general practitioners and specialist physicians.
Companies in the Australian medical devices industry undertake a wide range of activities including the research, development, manufacture, and distribution of products ranging from surgical gloves and syringes to artificial joints and hearts. It has been estimated that around 17,500 people are employed in the industry (AusMedTech).
Australia represents a large and highly advanced medical device market. The Australian market for medical equipment and supplies was estimated in 2010 to be US$4,027 million in 2010, equal to US$187 per capita, with Australia accounting for around 1.7% of the total world market (Espicom Business Intelligence Report: Medical Device Market, 2010, p.3). However, the Medical Technology Association of Australia (MTAA) estimated total annual revenue for the Australian medical technology industry to be $7.6 billion in 2009-2010 with this figure being extrapolated from various sources of data (www.mtaa.org.au).
The Australian medical technology market is dependent on imports although there is a highly skilled domestic industry which supplies a large number of hospital requirements. In 2010 the value of Australian medical technology exports was over $1.89 billion and the value of imports was over $4.5 billion (Australian Bureau of Statistics, Customised Statistical Report 2011).
The Australian medical technology industry comprises a variety of manufacturers and suppliers from emerging Australian companies to global companies (www.mtaa.org.au). Australia has a large number of medical device manufacturers, although with a few notable exceptions, many are relatively small and concentrate on niche markets (Espicom Business Intelligence Report: Medical Device Market, Q2, 2010, p.2).
Although there are a large number of companies, most sales and employment is concentrated in a relatively small number of large companies. Similarly, while the industry is represented in all states and territories, it is predominantly concentrated on the East coast, where almost 90% of companies and about 90% of employment is located. There are a large number of medical technology companies in Victoria and New South Wales (Deloitte, DIISR National Skills Audit, 2008, p. 21).
The industry is characterised by a high level of innovation, with short life cycles for many products. It has been estimated that the medical technology industry in Australia invested $388 million in R&D in 2008/09 (www.mtaa.org.au).
Examples of medical device innovation include:
Many medical devices undergo constant development based on feedback from medical practitioners and advances in other sciences relevant to medical technology. Small Australian firms often play the major role in research and development of new medical devices, with large firms providing organisational and capital assets that help ensure the commercial success of new products.
Examples of medical devices in development include:
Many Australian medical device manufacturers are world leaders in their fields. Both ResMed, which develops and manufactures devices to treat sleep apnoea, and Cochlear, which develops and manufactures a range of hearing products, are internationally renowned firms. Many smaller Australian companies are also innovation-driven.
Domestic demand for medical technology is very different from many other industries. As devices can be used for surgical, dental, optical and general health purposes, they might be bought by hospitals, private medical practices, medical professionals, consumers, ambulance services, private companies, aged care facilities and schools. Consequently, a large proportion of all devices used in Australia are used in clinical settings that are funded directly or indirectly by governments, through, for example, Medicare, private health insurance subsidies and public hospitals.
How are medical devices regulated?
The medical technology industry is regulated to ensure a high level of safety. In Australia, all therapeutic products including medical devices and diagnostics are regulated by the Therapeutic Goods Administration (TGA), through the Therapeutic Goods Act 1989 (as amended). This Act provides the legislative basis for national controls over goods used in the prevention, diagnosis, curing, or alleviation of a disease, ailment, defect or injury.
Medical devices are regulated according to risk classification, a system that has been endorsed by the Global Harmonisation Taskforce for medical devices, and is similar to that used in Europe. This system incorporates a set of essential principles for the quality, safety and performance of the medical device that must be complied with before the product can be supplied, the use of recognised standards to satisfy the requirements of the essential principles, regulatory controls over the manufacture of medical devices and a comprehensive post market surveillance and adverse incident reporting program (www.tga.gov.au).
National Skills Audit
The Department commissioned a Skills Audit of the medical devices industry, to identify short and long-term skills needs in the industry. A summary report of the National Skills Audit, published in 2008, is available to download.
The Department provides policy advice to the Minister for Industry and Innovation on the medical devices and technology industry and its operating environment, including providing advice on:
- Companies in the industry
- Domestic and international regulatory and reimbursement arrangements
- Employment and skills
- Domestic regulation impacts
- Impacts on the Australian operating environment of developments in the global industry.
Australian Medical Device Industry Data Card 2011
Pharmaceuticals & Health Technologies Section
Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education
GPO Box 9839
CANBERRA ACT 2601
Phone: +61 2 6276 1221