Industry stakeholders and consumer advocacy groups have influenced the US government to shift the focus of US healthcare to quality rather than quantity. In order to protect patients and promote public health, legislation has been put in place which ensures that devices are identifiable and secure at all points. This increase in regulation poses some challenges for the medical device industry:
Patient Protection and Affordable Care Act
This law, which went into effect in 2010, includes a $20 billion tax on the medical device industry, in order to reduce the deficit caused by increased spending on healthcare. In 2013, an additional 2.3% excise tax was added. These taxes are taken from revenue and not from profit, so they are a substantial burden to medical device businesses. According to the MoneyTreeReport, VC funding of medical device startups fell to $2.1 billion in 2013—down 17% from the previous year. Smaller companies will be most affected, due to the high costs of R&D. This may lead to consolidations of companies into a few large ones, which will be protected by their large range of products.
510(k) Submission Process
The current submission process to the FDA was created more than 35 years ago and allows devices that are similar to others already on the market to be approved with almost no testing. This system has been found to be flawed, and plans are underway to develop a system which ensures safety and effectiveness throughout the lifecycle of a device. About 60 policy changes are being considered, including risk management, design controls and risk-based stratification.
Unique Device Identification (UDI) System
New legislation mandates that most medical devices distributed in the US must include a unique device identifier, to establish security and consistency and identify a problem device more quickly. Companies must gather data about each device and submit it to the FDA’s new Global Unique Device Identifier Database (GUDID).
Organized management will help businesses deal with the new regulations. Proper record keeping will help companies submit their devices to the FDA quickly and speed up the process toward putting the device on the market.
Some of the challenges are discussed every year at the MedTechWorld MD&D East conference. If you did not have a chance to participate this year, let us know! We can share some valueable information.
At Triode, we specialize in developing new products and services for complex industries like medical devices and transportation. We work with you closely to help define product strategy, with an emphasis on reducing the risks associated with innovating in these sophisticated and often regulated consumer-oriented environments.