The Medical Device Market: Italy

Includes 3 quarterly updated outlook reports!

The Italian market for medical equipment & supplies ranks sixth in the world and the fourth in Europe, behind Germany, France and the UK. Per capita spending ranks just inside the top twenty at around US$84 in 2006. Italy has a strong manufacturing sector, with particular strength in X-ray equipment, cardiology equipment, implantable pacemakers, operating theatre equipment, anaesthesia equipment, respiratory apparatus, dialysis equipment and dental products ranging from instruments to dental chairs. Despite this, the country' s balance of trade deficit in medical equipment and supplies has been in excess of US$1 billion since 1998.

In recent years, Italian health reforms have centred on cost containment and the decentralisation of financial responsibility to the regions. In the 2002 budget, the National Health Fund was largely devolved to the regions. Cost containment measures in the 2003 Finance Bill included the reinstatement of patient copayments for specialist examinations and diagnostic visits. Recently, concerns about government reforms have risen among national health service staff. In February 2004, 150,000 hospital doctors, surgeons, chemists, biologists and administrators held a 24-hour strike to protest about pay freezes and health budget cuts. Thousands of specialist appointments and planned operations were cancelled as only emergency and family doctor services were maintained.

For companies without offices in Italy, the market is best approached through the appointment of an exclusive agent. Due to the significant regionalisation of the market, effectively dividing the north, south and the islands, it is important to ensure that agents have adequate national coverage. Since most agents are based in the industrialised north, national coverage is normally achieved through branch offices or sub-agents in southern Italy, Sicily and Sardinia.

Public hospitals are the main end-users of medical devices, accounting for some 70% of the market; the remaining 30% is made up of private hospitals and GPs. Within the public sector, procurement is decentralised to local level with each region issuing its own regulations. Equipment purchases are generally made on the basis of invitations to tender issued by the USLs. There is also a procedure for private contracts, trattativa privata, whereby the hospital deals directly with suppliers of its own choice, and a purchasing formula, in economia, for small, sporadic purchases which do not require a bidding formula. Factors considered by prospective purchasers include price, quality, operational costs, delivery time and service. Despite the government' s 90-day supplier payment ruling, Italy is notorious for slow payment. Private healthcare providers have their own purchasing procedures. Procurement in the private sector is generally much less complicated and payment is faster.