Report: In a big shift, medtech executives are paying more attention to the U.S. regulatory process

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In the early 2000s, medical technology companies looked to Europe when they had new devices they wanted to push through the regulatory process and bring to market.

But over the past decade, the companies have come to the attention of regulators in the United States, a sea change in industry sentiment, according to a March report by consultants and researchers at the Boston Consulting Group and from the University of California at Los Angeles.

“Most companies now find U.S. regulation not only convenient, but more compliant in accelerating innovation and getting to market faster,” said Gunnar Trommer, BCG partner and one of the report’s authors in a Zoom interview.

However, the picture is not quite rosy, according to the 48-page report. Titled “Interstates and Autobahns: Global Medtech Innovation and Regulation in the Digital Age,” it is based on a survey of 104 business leaders.

As the regulatory process has improved in the United States, executives see the country’s reimbursement policies as a new barrier to innovation. They also worry about regulators’ ability to keep up with the explosion of medical technology products that incorporate artificial intelligence and machine learning.

Yet the report paints a picture of a US Food and Drug Administration that has become more open to digital and technological innovation through a series of policy and program changes. Nearly four in five respondents, or 79%, agree that the FDA is “responding well to advances in medical technology,” according to the report. And 89% said they would prioritize U.S. regulatory approval over that of other countries.

“The FDA has clearly outperformed its international peers, and the intriguing data from this study suggests that the United States has become the most hospitable market for the burgeoning field of digital health offerings,” the report notes.

The finding contrasts with a 2010 study that showed Europe was the preferred regulatory route between 1999 and 2009, according to the BCG/UCLA report.

The improvement in FDA’s vision stems from several policy and program changes. They include the 2007 reauthorization of the Medical Devices Modernization and User Fees Act, which increased agency funding and set stricter deadlines for decisions. Survey leaders also cited the FDA’s program accelerating review of so-called breakthrough devices, as well as guidelines for devices incorporating AI and machine learning.

“These are all initiatives that the FDA has brought forward over the past few years that have significantly streamlined and, I would say, made more predictable how to bring digital and more of these innovative products to market,” Meghna Eichelberger, BCG partner. and co-author of the report, said in a Zoom interview.

Nonetheless, startups with less money to burn remain relatively frustrated with the US regulatory process, according to the report. “With typically only months of cash on hand, small businesses still face tremendous challenges when dealing with FDA officials whose time horizons too often don’t match theirs,” the report’s authors wrote. .

Advances in the United States contrast with complicating factors in Europe. Leaders have been most critical of the continent’s new Medical Device Regulations, or MDRs. They used the words “heavy and uncertain”. to characterize the MDR registration and approval process.

“Small businesses expressed these sentiments most forcefully, while some executives of multinational medical technology companies were more circumspect, speculating that the MDR could indeed raise the average quality of products in the EU market by reducing the number of undercapitalized new entrants,” the report noted. .

The executives also cited further complications from Brexit, which split one of Europe’s biggest markets – the UK – from the European Union. According to the report, just over half, or 52%, of executives surveyed said their companies would not prioritize European approval due to market risks and rewards.

The main current industry concern in the United States is the refund policy. Leaders see it as a failure to keep pace. They cited, for example, the Biden administration’s decision to sever the tie between the designation of breakthrough devices and reimbursement from the Centers for Medicare & Medicaid Services, which oversees government health insurance programs for the elderly, low-income people and people with disabilities.

According to the report, nearly two-thirds, or 63%, of executives surveyed consider the path to reimbursement for digital medical products to be unpredictable in the United States, compared to 45% for traditional products.

“Executives have widely called for greater coordination between regulators and reimbursement bodies and the creation of a separate reimbursement classification for digital products,” the report’s authors wrote.

Photo: Waldemarus, Getty Images

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