MD4: Challenges and opportunities for small companies and start-ups

Regulatory Rapporteur

December 2023  |  Volume 20  |  No.11

Key points:

• Importance of effective communication: The transition to the Medical Device Regulation (MDR) has made it even more critical to communicate effectively.
• MDR impact in the global medical device market: The implementation of the European Medical Device Regulation (MDR) has reverberated across the global medical device market, driving regulatory alignment, innovation, and competitive pressure while challenging market entry for non-European manufacturers.
• Opportunities through collaboration and transparency: Sharing knowledge and information was viewed as means to level the playing field and stimulate, particularly among smaller companies.

Martin Witte commenced this session with a thought-provoking observation: the inherent human tendency to assume that our thoughts are universally understandable. This underscored the pivotal role of effective communication in bridging gaps and fostering innovation. He delved into the complexities of the regulatory landscape, focusing on the European Medical Device Regulation (MDR) and how communication has a huge impact.

Witte underscored the significance of regulatory reform and innovation within the medical device sector. He emphasised that the regulatory future should prioritise simplicity, consistency, internal harmonisation, and adaptation. This includes measures such as implementing codes, reviewing Technical Documentation, addressing EUDAMED challenges, and removing overlaps. Furthermore, it involves achieving consistency through designation teams and harmonising Notified Bodies. Internal harmonisation can be facilitated through measures like Quality Management System (QMS) certificates and harmonised standards. Adaptation should include scientific advice, rolling review, modular assessment, and orphan device handling.

He then posed a rhetorical question: ‘Does Europe care about innovation?’ In his perspective, the answer is ‘yes’. Innovation remains a fundamental driver for all stakeholders, shaping the future of businesses within the industry. Notified Bodies are actively moving toward fostering innovation, exemplified by structured dialogues introduced in MDCG 2022-14 document concerning Notified Bodies (NBs) capacity and availability of medical devices and IVDs. Progress is being made but this transformation is an ongoing journey rather than an overnight shift.

Hasnaa Fatehi offered an external viewpoint on the European medical device landscape. She began by sharing data on the medical devices registered in the EUDAMED database. China leads in the number of medical devices registered in Europe, with Germany and the USA following. Most European countries and Canada lag behind.

Turning the attention to Canada, Hasnaa Fatehi discussed the unique challenge of MDSAP certification and the impact that MDR and IVDR had on Canadian manufacturers. This includes as an example the capacity for MDR and MDSAP audits by auditors. Canadian EC representatives say there has been a decrease in service requests as manufacturers turn away from the EU due to increased overall costs and issues with understanding the regulations and requirements.

On Asia, the Taiwan FDA’s efforts in harmonising regulations in the ASEAN region and establishing a reputation for good healthcare practices were highlighted. Despite this, there were concerns about regulating innovative devices and the need for regulatory clarity for software and medical devices using AI and ML. Concerning China, she discussed the ‘Made in China 2025’ policy and how it aims to transition the country from being the world’s factory to providing value-added services. Chinese manufacturers are keen to protect their revenue in Europe through CE marking.

Hasnaa Fatehi concluded by reflecting on the evolving regulatory landscape. She noted that what used to be the gold standard for regulatory pathways had become less predictable, prompting manufacturers to explore alternative markets. She encouraged the audience to adapt to the shifting regulatory landscape and look forward to Europe regaining its status as the go-to innovation space.

With a focus back from inside the European market, André Fazenda shed light on small companies’ challenges and opportunities. He pointed out that while regulations like MDR aim to ensure the safety of medical devices, they also place a heavy burden on smaller companies. For small companies, especially startups, regulatory compliance can be financially daunting. Additionally, small companies must invest in creating a Quality Management System (QMS), training their personnel, attracting talent, and acquiring the necessary knowledge. These requirements place additional financial stress on smaller entities.

He recognised the positive intent behind the MDR, which aimed to enhance the safety of medical devices. However, its practical implementation faced issues. Such include the timeline postponement, which gave a sentiment of injustice for those who invested in compliance with the 2021 deadline, only for the timeline to be pushed back to 2028.

Despite the challenges, there are opportunities for small and startup companies. Smaller firms are more agile and can adapt more quickly to new regulations and standards compared to their larger counterparts. They can leverage their flexibility to make a mark in the industry. The growing global medical device market also offers room for innovation and expansion. New standards and regulations like the MDR allow companies to collaborate, innovate, and cater to emerging healthcare needs.

André Fazenda’s insights highlight regulatory compliance’s complex and demanding nature for small and startup medical device companies. While challenges exist, opportunities for innovation and growth are also present.

During the Q&A discussion, participants discussed the function of Notified Bodies and Competent Authorities in communication with innovators. The need for easier access to regulatory information, as well as creating low-cost educational programs, was emphasised.

Participants also mentioned that venture capital (VC) funding in Europe could be challenging due to regulatory uncertainties, leading to a preference for the more stable regulatory environment in the United States. There was a suggestion to create programs to reduce entry costs for small companies and encourage VC investment.

The discussion also highlighted the importance of information sharing among small companies, with transparency and collaboration as keys to success. The need for educational resources and free access to information, as provided by the FDA and other organisations, was underlined.

This session sheds light on the ongoing hurdles and opportunities in the medical device industry, for small companies and its impact in the world. It underscores the need for improved communication, training, and collaboration and the importance of attracting VC investments. The industry’s capacity to effectively navigate the complex regulatory landscape will be pivotal in fostering innovation and propelling it forward.