Establishing complete supply chain management for MedTech and Life Sciences

We explore the significant challenges affecting the MedTech and life sciences value chain, and how an innovative initiative is helping to streamline the process while building resilience in Europe.
26 September 2023

Supply Chain Resilience

The need for effective resilience in the life sciences and MedTech supply chains has become increasingly evident in recent years.

Supply chains came under unrivalled strain levels during the global Covid-19 pandemic and its aftermath. Facilities closed, supply routes shut down, and certain raw materials became scarce. Many commentators suggested these issues exposed already existing flaws.

Consequently, supply chain resilience and contingency plans have come under closer scrutiny. In the Netherlands, there is an advanced initiative to provide controls for every aspect of the supply chain for life sciences and MedTech across Europe – particularly for companies outside the market that are seeking to do business within.

Based in Brabant’s health-tech hub, Tesseract Europe offers control over pre-supply chain activities such as R&D, market strategies, and reimbursement to end-users, including patients, hospitals, wholesale distributors and government agencies. The organization is adept at covering every crucial step, from export compliance and customs clearance to regional warehousing and final delivery, as well as taxes and accounting.

“If we see an issue, we hope to identify it before it’s happening and ensure a seamless supply chain,”

Rene de Koning, co-founder and director of supply chain at Tesseract EU.

MedTech Nexus

Simplifying medical supply chains

Tesseract Europe has its roots in BioPort Europe, which launched in 2010 to help life science companies from India move into the European market. The concept was revived in 2019 by the leading stakeholders, Rene de Koning and Ron de Graaff, with the aim to provide oversight & control for all requirements of the life sciences and MedTech sectors.

“We aim to create a one-stop shop that can deliver European life sciences and MedTech solutions by combining market access, reimbursement, supply chain, customs compliance, and tax and accounting services, based on a control tower environment,” says de Koning.

This control tower connects diverse service providers using advanced technology to interact and share skills, knowledge, and expertise. Through this smart digital approach, providers can combine critical parts of their value chain to ensure seamless operation. Such interconnectivity between numerous stakeholders within the supply chain is key to enabling consistency and continuity.

“We are not bound to a certain company or other organization whatsoever. We are looking for the best solutions,” says De Graaff, co-founder and director of market access at Tesseract.

The pandemic exposed underlying issues with medical supply chains while highlighting areas needing greater resilience. Investing in technical capabilities such as advanced analytics and real-time collaborations was necessary to ensure supply continuity when many established routes and facilities were closed.

De Koning calls Tesseract EU the “simplifier of the value chain” for companies from overseas.

“What we noticed during Covid when there were limited flights from the US to Europe, was that US companies had a problem in supplying the European region,” he explains. “You see a lot of American companies pushing inventory forward, putting it in the European region in a bonded warehouse. You don’t pay import duties, you don’t pay VAT, untill you sell it.’’

“To be more agile, you need to have a more resilient supply chain and that’s what we set out to achieve for our customers.”

Rene de Koning, co-founder and director of supply chain at Tesseract EU.

The importance of reimbursements

For medical enterprises looking to expand in Europe, reimbursements are a crucial factor. De Graaff highlights the urgent need for reimbursements to become one of the mandatory requirements for any MedTech or life sciences product entering the EU market.

“If you come to the Netherlands or Europe with a certain product, you need reimbursement or you need the hospital to have to buy the product,” he says. “We always say that without reimbursement, your market is 10% of the market you could have if you have a reimbursement.”

Companies must also be fully prepared for all the customs requirements when trying to get a product into a specific market. A common misconception among EU member states is that they all follow the same rules when it comes to medical products. This is not the case. There can even be variations in regulations between neighboring countries or between members of the same trade bloc. “If there is no market access, no reimbursement, then the rest will also not happen,” adds de Koning.

North American businesses frequently overlook the need to establish a company within Europe to enable trade there. This inevitably causes delays and can often significantly impact on market demand, which may be incompatible with a long wait time.

“A US company started the reimbursement process but forgot to organize a company in Europe. If they had to do a submission, in this case to Germany, this could only be done by a manufacturer of this organization,” says de Koning.

“The company should have been a member of the manufacturer’s organization, but couldn’t because it was a US company, not a European company.”

In this instance, it took a year for the business to set up a company in Europe, by which time the parties interested in the product had found options elsewhere, says de Koning. Therefore, enterprises are usually advised to begin all these processes simultaneously, which typically requires high levels of coordination.

This is where Tesseract EU’s expertise is highly useful for businesses looking to expand in the European market. The team can deliver all of the necessary activities to serve certain markets efficiently.

“With all kinds of information, we can deliver the best service, so the company doesn’t lose time, because each month the product is not delivered that’s a loss of money,” says de Koning.

The medical supply chain in action in Brabant

With its concentration of R&D, production, and logistics ventures in a compact geographical area, Brabant is a healthcare innovation center that attracts global start-ups and established life sciences and healthcare firms. Tesseract EU benefits significantly from its location within this hotspot.

One example of the MedTech ecosystem in action is the development of smart plaster technology. TracXon, a spin-out company from Holst Centre in Brabant, specializes in the production of hybrid printed electronics, and it has created a unique wearable device where sensors are printed on medical tape to monitor a patient’s vital signs.

Ashok Sridhar, chief executive of TracXon, says: “This smart plaster looks like a Band-Aid patch and contains electrodes that measure the body signals of the patient.

“A small box containing a rechargeable battery serves as the device’s recording unit. The device has a chip for processing all the information, as well as a Bluetooth chip for streaming the data wirelessly to a smartphone.”

Patients can wear the wireless smart plaster for up to a week to collect health statistics, and it is waterproof, meaning the wearer can shower and participate in sports activities.

Many health and life sciences enterprises continue to flourish in Brabant thanks to an efficient manufacturing industry, a thriving knowledge-based economy, and an active investment community.

Companies looking to enter European markets can benefit from the expertise of the Brabant Development Agency (BOM), which connects entrepreneurs, knowledge institutes, and authorities.

BOM is an executive collaboration between the Province of Brabant and the Ministry of Economic Affairs and Climate Policy, which helps entrepreneurial ventures gain a strong foothold in competitive markets.

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