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Software, speed and regulation: the changing face of the medical devices market
01 Sep 2010
Topics: Medical devices, Healthcare
In the month in which BSI Healthcare begins a new market authorization collaboration in the Kingdom of Saudi Arabia, what issues and trends are evident in the medical devices market? What is the likely future of medical devices regulation in light of the European Commission's ongoing review? And how is BSI Healthcare meeting the challenges of this changing landscape?
From 1 September 2010, BSI Healthcare is embarking on a unique collaboration in the Kingdom of Saudi Arabia with four other medical device Conformity Assessment Bodies (CABs). The project was put in place by the Saudi regulatory authorities in recognition that the Kingdom needed to stop the import of unsafe and unregulated medical devices and put in place mechanisms to provide for more effective controls in future.
BSI Healthcare is one of five CABs invited by the Saudi Food and Drug Administration (FDA) to provide market authorization for devices hoping to access the Saudi market under the new regulations. On behalf of the SFDA, BSI personnel will be involved in verifying that devices have a valid prior approval under an existing recognized scheme, and that they also meet local requirements. Additionally, by 1 March 2011 all existing products placed on the Saudi market, within some 38,500 categories, will have to be approved.
As David Ford, executive director of BSI Healthcare & Testing Services, explains, the new programme will protect the Saudi populace in one of the most sensitive areas of product testing and certification.
However, from the medical devices standpoint more interesting is that it represents the first time that five of the world's major medical device CABs have worked together. This comes at a time when the medical devices market is evolving quickly, and possibly facing its biggest shake-up since the first of three "New Approach" European Medical Devices Directives was introduced in 1993.
An evolving market
For now the market is responding to the fact that people in developed economies are living longer. This means that more healthcare is needed and as a result the medical device market is growing - according to the European Commission by five to six per cent annually.
A clear growth area is medical devices software - a specialized discipline for validation and verification. Software is growing, partly because of the increasing effort to move healthcare out of hospitals (where healthcare provision is most expensive). This is driving the increased use of technology for remote monitoring and diagnostics.
It also chimes with the wishes of older patients who want to maintain their independence as much and for as long as possible. It is giving rise to things like remote blood pressure and blood sugar monitoring devices. It also fosters the growth of telemedicine, wherein large established telecoms providers are looking to provide the infrastructure on which this data travels.
Technology is also being brought in to broker efficiencies across hospital-based provision, so individual bed-side monitoring has given way to networked stations, and subsequently the introduction of integrated systems where individual in-patient records might extend from admittance details, bed location and insurance status to include current vital signs and drugs regime.
"The ongoing question is how far the validation and verification of devices should extend in an integrated system?" says Werner Kexel, managing director of BSI's healthcare business in Germany, BSI Eurocat. "This is causing a very interesting discussion in Europe, and especially here in Germany."
Indeed, BSI Eurocat experts are members of the European Commission experts group preparing "MedDev" guidelines on the issue.
It was in response to the increasing use of software within devices that BSI Group acquired Eurocat in 2009, a well-established German CAB operating in the DACH region (Germany, Austria and Switzerland) and growing in Turkey and Russia. Eurocat has specialized in verification and validation of software programs in medical devices ever since its founding in 1990.
Speed to market
Another trend is that manufacturers are increasingly looking to increase the speed to market of new products.
This is partly driven by the fact that product innovation lies largely in incremental improvements and is increasingly software-based. These products don't have strong points of differentiation between them - which makes early market entry to establish a product all the more important.
Another speed-to-market factor is finance. Many SMEs in the sector look to venture capitalists for funding - and SMEs dominate the sector. In Europe, for instance, 80 per cent of medical device manufacturers are SMEs. Post-recession, VCs are now looking to see returns on investment more quickly than they did before.
Similarly, multinationals - including those looking to acquire SMEs - are increasingly concerned to see an early ROI. This is partly because of structural changes splitting large companies into smaller business units and giving greater visibility to ROI. It is especially so in the dominant, but currently unsettled US market, which is facing major healthcare reforms and concern around reimbursement allowances. It is also facing uncertainty over heightened scrutiny of Section 510(k) of the US Food, Drug and Cosmetic Act, which requires device manufacturers to notify the Food and Drug Administration of their intent to market a medical device at least 90 days in advance.
"Early market entry is worth a premium on many fronts," observes Todd Moorman, BSI Americas' assistant vice president of strategic development. "You see quicker sales revenue, and the reputation for being first to market is an advantage. It drives higher market share, which is usually rewarded by positive attention, and then more shareholders want to invest and it spools into other good things." He adds: "We understand that, for our clients, time is money."
With this in mind, in the higher-risk product areas where design dossier reviews are necessary, BSI Healthcare has developed specific programmes to help manufacturers gain market approval predictably and as soon as possible.
"There are some important disclaimers to qualify that," says Moorman, "but most of the time if the client is fully ready to go and has well-organized and easy to navigate data, working with BSI reviewers can be pretty speedy."
The role of regulation
Finally, on the theme of change, nothing is likely to have more impact on the market than the European Commission's mooted changes to its three Medical Devices Directives.
In 2008, the Commission launched a public consultation concerning the "recast" of the medical devices directives. Still ongoing, the Commission says: "This process shall lead to a fundamental revision of the existing directives in order to simplify and strengthen the current legal framework."
Regulatory pathway
It needs to be said that this revision has global ramifications. Europe represents 33 per cent of a global medical device market worth about 187 billion euros. In addition manufacturers in the biggest single medical devices market - the US - historically often look to gain market access via the EU's Directives as a route to earlier revenue return than they would see at home via the Federal Drug Administration's in-house testing and verification procedures.
Of the other developed economies, Australia and Canada also accept EU certification as valid for their market access. And from September 2010, as we have seen, Saudi Arabia begins the implementation of new regulatory controls which rely on prior compliance with other established regulations such as the EU's Medical Device Directive. Many believe that the Saudi framework is likely to be influential in the introduction of similar programmes across the Gulf region. Japan meanwhile does its own high-risk certifications, but accepts certifications by Japanese Registered Certification Bodies (RCB's) such as BSI Japan for lower risk devices.
Finally, emerging markets such as China, India and Brazil are looking to Europe's regulatory pathway as a guide to the way forward for their own nascent regulatory frameworks.
Future path
At this moment it is not clear how the Directives will change. However, BSI Healthcare is positive about the likely outcome of the revisions. It notes that a key question that the Commission asked in its consultation is: "How can we ensure that the appropriate expertise is used in the evaluation of the most critical and innovative medical devices?" BSI Healthcare would answer: "By raising the bar on ensuring qualified reviewers."
In BSI Healthcare's case, it is regulated by the UK's Medicines and Healthcare products Regulatory Authority (MHRA) - a body widely held to be one of the toughest competent authorities in Europe. The MHRA is rigorous in ensuring the competence of the staff of the UK's Notified Bodies, including that they have significant industrial or other relevant experience.
BSI Healthcare aims to meet MHRA expectations with some margin to spare. One single team of 15 product specialists has 38 university degrees between them. All teams include many years of design experience in the devices industry and, unusually among Notified Bodies, BSI also employs a full-time animal tissue expert.
In Ford's opinion, these exceptional capabilities and the model of excellence that BSI Healthcare has adopted ensure that products are safe when they get to market.
"The biggest risk for medical device manufacturers is reputational risk," he says. "What we do at BSI is set the technical competence bar reasonably high - not so high as to make market access unnecessarily difficult - but we look at the intent of the Directives to keep people safe, assess the devices effectively and in doing that we reduce reputational risk for our clients."
It's a formula that is working exceptionally well for BSI Healthcare, Ford says: "We are continually seeing transfers to BSI because we are demonstrating technical competence which is far and away above what anyone else can deliver. That's what clients want. They want speed to market but they also want to talk to somebody who knows what they're doing."
It is also a formula that is likely to stand BSI's clients in very good stead no matter what the future holds.
For further information on medical device testing and BSI Healthcare.
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