Why does Irish medtech have to move to America to survive?

A dedicated medtech fund within ISIF would give a small Irish company a serious domestic investor to build around. File picture 

A wearable sensor designed in Dublin is now in use in 20 clinics across 11 American states. It was built by Vertigenius, a Trinity College Dublin spin-out. The sensor lets clinicians monitor vertigo patients remotely, and it completed its United States Food and Drug Administration (FDA) registration last October. When the company raised €2.55m in April, part of the money went towards a sales team in America.

Plenty of Irish medtech companies have gone the same way. The customers are elsewhere, and so is the capital. In the first three months of this year, international investors provided 85% of all the venture capital raised by Irish companies, and Irish investors the rest. A few years ago, that split was closer to half and half.

Medtech is one of Ireland’s industrial success stories. The sector employs 50,000 people and exports around €20bn of product a year. There are more than 450 medtech companies in the country, from nine of the world’s 10 biggest to the SMEs and start-ups that make up about 80% of the total. The money problem bites hardest at that 80%.

A medical device is slow to build. It has to be designed, manufactured, put through regulators, and then proven in hospitals before anyone pays for it at scale, and every one of those stages takes years. In this sector, 10 years or more can pass between a company being founded and its backers getting their money out. That kind of horizon suits pension capital, which invests over decades and is under no pressure to exit early.

Since January, workers in Ireland without a pension through their job have been automatically enrolled into My Future Fund, the State’s new retirement savings scheme. More than 760,000 people are in it already, with contributions coming from the worker, the employer, and the State, and the first of that money is now being invested. That pool will build for decades.

There is a second pot. The Ireland Strategic Investment Fund (ISIF) holds billions of euro of State money with a mandate to invest it commercially in ways that create economic activity and jobs here. Backing Irish companies as they scale is one of its stated priorities, and it committed several hundred million euro to that in 2024 alone.

A dedicated medtech fund within ISIF, sized in the hundreds of millions and investing alongside private backers, would give a small Irish company a serious domestic investor to build around. There is also a conversation to be had, while My Future Fund is young, about the role Irish scale-ups should play in how those savings are invested.

Nobody is suggesting that retirement savings should be concentrated in early-stage ventures. International pension funds routinely allocate a modest proportion of their assets to venture capital, private equity, and growth investments in pursuit of long-term returns. The scheme’s first duty is the saver’s return, and that should not change.

Private capital

Nor does any of this replace private capital. The point is to crowd it in, with State-backed funds investing alongside experienced commercial investors on market terms.

Regulatory approval may allow a device to be sold, but it does not guarantee that a hospital will buy it, a clinician will use it, or a payer will fund it. Irish hospitals will generally agree to trial a device. Getting the health service to pay for it routinely, at scale, is the difficulty. In America, hundreds of hospital systems make that decision separately, so a company turned down by one can go to the next.

In Ireland, the HSE is effectively the whole market. Investors price that risk into every Irish medtech company they look at.

Ireland needs a national market access strategy for medical technology, setting out who assesses a new technology, what evidence they need, what timelines apply, and what happens to a pilot that works.

A MedTech Adoption Fund would cover the cost of a new device centrally, so that a hospital adopting one is not taking it out of a clinical budget already committed to something else. The purpose would not be to subsidise weak products or shortcut the evidence; public money should go only where a technology shows clinical, operational, or economic value. And procurement rules could be written with software companies in mind as well as manufacturers. If we can create and manufacture these technologies for the world, we can be a launch market for them too.

We are good at building medtech companies in this country. The money to grow them is sitting in our pension savings and our sovereign fund, and the first customer they need is running our hospitals. We should use both.

• Eilish Haughton is a Partner at Baker Tilly Ireland.