It should come as no surprise that the movement toward more rigorous post-market surveillance of medical devices has gone global. While US med-tech titans like Medtronic and J&J have made headlines for selling bad defibrillator leads and faulty hip joints, America certainly doesn’t have the monopoly on device recalls; it was a French company that marketed substandard breast implants used in some half million women worldwide, landing the CEO in jail after a media-stirring manhunt.
Fueled by this highly visible run of device recalls, post-market data demands are increasing for the more risky (Class III and some Class II) new medical technologies in the U.S. as well as in Europe. While Europe may still provide a faster route to regulatory approval for such devices, post-market requirements are creeping in like an expensive final cheese course served by European regulators and health systems just when companies are feeling most broke and tired. So regulatory approvals may come, but actual, meaningful revenues? Not so fast.
To dig deeper on the changing med-tech launch conditions in Europe, S2N talked to Terry McCarthy, Co-Founder and Managing Director of FirstClinTech, a Holland-based company providing a range of services (business development, clinical support, logistics and technical service) aimed at “easing” medical device companies into the EU markets. FirstClinTech came to life filling a service void left by a failed ventricular assist device company, so Terry knows a thing or two about the market challenges for novel medical technologies in Europe.
On paper, European-wide efforts to strengthen and harmonize regulation of innovative medical devices are progressing at a leisurely pace, with a target adoption of yet-to-be-clarified regulations by 2019. “Don’t let that timeline lull you into complacency, though,“ warns Terry, who is already seeing some Notified Bodies stepping up their post-market data requirements ahead of any new regulations being in force. This escalation in post-market requirements has real, quantifiable implications for emerging med-tech companies.
Delayed Commercial Revenues
Terry cites recent examples where Notified Bodies have made CE approval of implantable devices conditional upon satisfactory surveillance data captured for a defined period of time or number of implants. “We often confront the unrealistic assumption that as soon as you have CE mark you can start selling and generate revenue,” says Terry. While companies generally understand that significant revenue will be gated by reimbursement, which is in turn gated by efficacy data, heightened post-market regulatory requirements could translate into longer dwell times in “limited launch” (a.k.a. paltry revenue) mode than expected. For some product types, companies are often end up giving away lots of devices during this phase, further reducing early market revenues.
Increased Post-Market Expenses
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
The most obvious cost associated with post-market surveillance is study management; this expense can vary widely depending on the surveillance study size and device complexity. “You want to do enough science to back up what you said in your dossier,” advises Terry, “and also see that the patients enrolled in the post-market study resemble those in the pre-market study.” For example, a physician might be tempted to try a newly approved device in a “train wreck” patient for whom there are no other options, even if this is an off-label application with much lower efficacy prospects. “Ensuring that appropriate patients are included in the post-market surveillance studies means that companies need to have people on the ground interacting with centers,” says Terry.
Tougher Sales Channel Decisions
This need for tighter control in the early commercialization phase can also impact the decision of whether and when to go with direct sales representatives or sell through a distributor in Europe. “A distributor will naturally want to sell as many devices as possible, whereas company management and the Notified Body all want the first tranche of patients to be done in a fairly controlled way,” cautions Terry. Other post-market obligations, such as device traceability (another recall-inspired global initiative), must also be carefully considered in distributor relationships and contractual arrangements.
Despite heavier post-market burdens, regulatory consistency across Europe will likely benefit emerging med tech companies in the end. “The current situation is confused,” says Terry. “Harmonization should improve transparency and establish a more level playing field for medical device companies.” A major bridging of regulatory frameworks across the Atlantic, however, is likely a long way off. Terry and others agree that Europe will continue to take a more risk-based, safety-focused approach to device approvals for the foreseeable future. Getting insurance payment for new devices in Europe, or the US, is another matter entirely.
For more predictions and insights about the changing landscape for med tech in Europe, read this excellent article from FirstClinTech.
