HBI Deals+Insights / White Paper

New report: International Investing in Healthcare and Life Sciences 2022

The latest report from global law firm McDermott Will & Emery (McDermott) looks at the international investment landscape in healthcare, and life sciences. HBI speaks to McDermott’s London head of healthcare, Sharon Lamb to find out more.

To read International Investing in Healthcare and Life Sciences 2022, click here.

Written as a guide to key legal and regulatory issues in health and life sciences transactions, the report has launched at an interesting time. Lamb explains: “The report drills down into key regulatory changes across Europe and the US. But, these aren’t the only factors affecting deals. We know these regulatory issues need to be set in the wider context for healthcare services: increasing demand, inflationary pressures, rising energy costs and staffing challenges are key pressures in all countries.”

One theme that emerges is the proliferation of digital health tools and legislation to govern their access and reimbursement. “Post pandemic, the consumerisation of healthcare continues apace. Patients now expect care through technology, and their health provider to offer digital solutions.  Increasingly people run their lives through their phones – an internet search engine is often the first port of call for a diagnosis. That gives rise to some risks, particularly for the “worried well” but, on the other hand, also presents huge opportunities for the sector.

“And yet… healthcare is one of the last areas to fully digitise. Tricky issues still crop up on the sharing of data, even between health professionals. Machines in one field can’t always communicate with others. Patients may wonder why these barriers exist – especially given connectivity in other areas, such as banking.

“Finally, we’re seeing some exciting changes in data protection policy, particularly, the developments to build a European health data space. Data sharing and accessing data for innovation remains a challenging area even though most countries acknowledge that data is essential for valuable research. Regulations have been slow to catch up, but we are seeing some significant shifts in policy across Europe.”

She adds that whilst the economic climate is uncertain, ultimately,  healthcare and life sciences continue to be seen as resilient sectors and a safe space for international transactions and investment.

She clarifies: “Increasingly, transactions are international – diagnostics, fertility and care transactions are global. But, on many levels, healthcare remains local – regulation, professional issues and reimbursement is extremely domestic, often reflecting historic views in a country about the relationship between patient and doctor.  So, although there are common macro trends, it’s important to fully understand the nuts and bolts of a country’s regulatory and reimbursement system. It’s a mistake is to assume that what is important in one jurisdiction is top of mind in another.”

The report provides a bird’s eye view of different jurisdictions, and the factors relevant to decisions on collaborations and investments. Lamb says: “It’s a snapshot of the most important factors that investors, pharma, or healthcare companies need to understand before embarking on deals in new geographies and covers health services reimbursement, drugs, devices and data.

“The report also looks at restrictions on ownership. Some countries have significant professional ownership requirements which stem from historical professional delivery models – the DACH countries in particular, contrast quite significantly with the UK where, other than NHS contracted primary care, hospitals and clinics can be owned directly by investors.”

Foreign investment has also been on top of the agenda in some of the largest European countries. “We have seen more concern about foreign investment, particularly where it affects public health and biotechnology – the pandemic has highlighted that this type of technology and access to public health tools are a strategic, national concern.

“This has been a significant feature over the last two years – France has new rules on foreign investment – likewise, there have been changes in Italy, Germany and the UK.”

“In the digital space, there is a lot to be excited about. France is proposing an extension of the telemedicine framework and the reimbursement of related medical devices. Germany has transferred its pilot project for digital healthcare in the regular payment system so digital healthcare services are not reimbursed by public and private payors. Generally, we see a real liberalisation around digital health services.”

If you would like to read MWE’s report, click here.

We would welcome your thoughts on this story. Email your views to David Farbrother or call 0207 183 3779.