Swiss medtech downgraded to «third country» status today

Swiss medtech loses barrier-free access to EU single market

Today, the new EU Medical Device Regulation (MDR) replaces the existing EU Directives (Medical Device Directive, MDD) and the corresponding Swiss medical device legislation enters into effect. When the MDR comes into force, the Swiss medical technology industry will lose its existing barrier-free access to the EU single market. The reason: a prerequisite for the barrier-free trade in goods – namely the updating of the Mutual Recognition Agreement (MRA) – has not been fulfilled to date. The EU had already made it clear in late 2018 that it would neither conclude new bilateral agreements with Switzerland, nor update existing ones, without the Institutional Agreement (InstA) being initialled. This effectively turned the medtech industry into a tactical «ball» in the political game between the EU and Switzerland.

«It was clear early on that updating the MRA was purely a question of political will for both negotiating parties. Our recommendation to the Swiss medtech industry two years ago was therefore: If you want to ensure gap-free export of goods to the EU, independent of the EU-Switzerland political situation, you must prepare for possible third country status,» says Peter Biedermann, Managing Director of Swiss Medtech. The news has hit the medtech industry at a time when it is facing unprecedented challenges. Implementing the MDR alone is, and remains, a major undertaking. Added to this of course is the Corona pandemic; where medical technology plays a central role in the healthcare system response.

«The last two years have been tremendously demanding for Swiss Medtech and its members. The industry has made unparalleled efforts to prepare for additional requirements needed to export goods to the EU,» says Peter Biedermann. These primarily involve appointing an authorized representative in the EU area to assume tasks on behalf of the manufacturer – which include product liability and the corresponding relabelling of products.

This does not come without a price: administrative efforts to meet third-country requirements will initially cost the Swiss medtech industry an estimated CHF 114 million – followed by CHF 75 million annually thereafter. These costs represent 2% and 1.4% of total export volume (CHF 5.2 billion) from Switzerland to the EU, respectively. «The net administrative costs are manageable when viewed in terms of the Swiss medtech industry as a whole; however, we are more concerned about the loss of market attractiveness and the associated negative consequences in the future. For non-European companies, for example, wanting to base their headquarters in Europe, Switzerland will lose a tremendous amount of investment attractiveness compared to EU countries due to the third-country bureaucracy. We are also concerned that Swiss startups could increasingly locate their headquarters in the EU instead of Switzerland. Anyone who simply states that the administrative costs are bearable is completely ignoring how tough the international competition is,» says Beat Vonlanthen, President of Swiss Medtech, commenting on the figures.

There is no «silver lining» to the current situation. Thanks to the Bilateral Agreements I in 2002, technical trade barriers between Switzerland and the EU were dismantled and mutual market access was secured. Today, Switzerland has lost this advantage for an economically important branch of industry comprised of 63,000 employees and 1,400 companies. For Beat Vonlanthen, it is therefore clear that «beyond today, the Association will continue to work with unwavering commitment to ensure that the MRA is updated as quickly as possible and that Switzerland's relations with the EU are once again ensured a solid and lasting foundation».

Patient care as the primary interest

Swiss Medtech is disappointed that Switzerland and the EU have not yet agreed on a joint collabora-tive interpretation of the current MRA and corresponding transitional provisions for medical devices with legacy certificates (MDD products). «We hope that the last word has not yet been spoken. Both sides must be interested in a pragmatic solution to maintain seamless patient care in Switzerland and the EU. I expect politicians to put the health care of their own people above tactical negotiating interests,» says Beat Vonlanthen.

Swiss Medtech represents more than 750 members in its role as industry association for Swiss medical technology. With 67,500 employees and a contribution of 11.5% to the positive trade balance, medical technology is an economically significant sector in Switzerland. Swiss Medtech advocates for conditions that enable the medtech industry to perform at peak capacity and provide first-class medical care.