SMCMA Physician

How Do You Handle the FDA Question?

For those who want to launch a medical device in the US, they will soon face the question of how to get through the FDA maze to commercialize their products. Regulatory risk is one of the key factors for venture capitalist withdrawal, which compels many early-stage startups to navigate the complex regulatory landscape on their own before landing a Series A funding. This challenge cannot be underestimated because the FDA safety and efficacy bar can be very high, especially for first-time medical device entrants.

For these reasons, medical device entrepreneurs should start planning their regulatory strategy as early in the development cycle as possible. First to keep in mind is regulatory strategy should be an integral part of business planning and not an afterthought. One big mistake that entrepreneurs often make is not realizing the huge impact that regulatory compliance has on development direction and execution. Plunging ahead into development without a good grasp of the regulatory path will likely lead to costly mistakes from complete redesign to failing time-to-market milestones. It is highly recommended that a startup seeks outside regulatory advice to improve the odds of successful product introduction. Taking the DIY approach without regulatory expertise may spiral a startup into financial crisis sooner or later.

To put a medical device on the US market, it is a must to understand what level of regulatory controls a device needs to comply. FDA regulates devices based on risk and categorizes risk into three classes. Class I devices belong to the lowest risk category. Class III are those with the highest risk. The majority of devices are in the middle. These moderate risk devices are introduced to the market through the 510(k) premarket notification process which requires demonstration of substantial equivalence to a legally marketed device known as a “predicate”. Many entrepreneurs think substantially equivalence is demonstrated by showing the device is designed to do the same thing as the predicate. It would be nice if things can be this simple, but this is not how FDA determines substantial equivalence. Whether or not your device is substantially equivalent to a predicate depends on what you claim your device is intended to be used for. So, by altering the labeling wording of a class II device to focus on a specific anatomy or disease without any design change, one may cross into the class III border which will have a huge impact on everything from development and funding needs to exit feasibility. The class III pathway demands the highest regulatory controls and requires proof of safety and efficacy through bench testing, animal, and human clinical trials. The cost associated with this path and the risk involved may steer existing or potential investors away. The 2019 class III premarket approval submission fee alone is about $80,500. On the other hand, tweaking the device labeling to fit into class I for the sake of faster commercialization will lead to marketing restrictions that reduce a startup’s value proposition or put a startup at risk of a recall due to inappropriate claims and off-labeling in the field. Besides, class I devices are not free from FDA onsite inspections and are easier targets for competitor entry. Therefore, before moving forward with critical market decisions, it is wise to have a good regulatory strategy on hand.

Devices in all three classes are required to be manufactured under a quality system according to the risk of the device. The responsibility for complying with FDA’s quality system regulations cannot be delegated even though a device is manufactured in a contract facility that has a quality system already established. Entrepreneurs should look beyond regulatory submission to ensure full compliance for commercialization. In a nutshell, having a clear regulatory strategy early will de-risk your startup and improve your score when pitching to investors in this increasingly complex and competitive medical device market.

Margaret Wong is currently a med tech advisor for startups in regulatory and compliance matters.