Earth to FDA: Medical Device Compliance is Really Expensive

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Michael Causey, Editor & Publisher,

Sometimes it takes an independent study to confirm what everyone kind of already knew or suspected: Device companies pay a heavy price in terms of time and money when it comes to FDA compliance. That’s the well-researched and well-argued thrust of a big new study from Stanford.

The survey of more than 200 medical device companies found some sobering results. For starters, FDA turnover presented many of them with a hassle: 44% said they had to deal with the departures of sometimes key FDA folks handling their premarket approval. And more than a third, or 34%, said that appropriate FDA staff was not present at key meetings.

Makers of high risk devices seeking premarket approval said it took them an average 54 months from first communication with the agency to getting approval. In Europe, that average is 11 months.

Now let’s talk money.

The average cost to bring low-to-moderate risk 510(k) products to market was $31 million, reported medical device companies. The FDA accounted for a whopping $24 million of that via direct and indirect compliance activities.

Higher-risk devices reported a sticker price of $94 million, with $75 million of that linked to the FDA.

“For U.S. companies, these mounting costs are unsustainable in a venture-backed industry where less than one out of four medtech start-ups succeed, 50 percent of all reported exits, [such as an acquisition or initial public offering] are less than $100 million, and the total pool of available investment capital is shrinking.”

In the 1950s and early 1960s politicians made a lot of a so-called “Missile Gap” between the United States and the U.S.S.R. Today, this report points to a “Device Lag” between the U.S. and Europe. “In some cases, the device lag [between US and European approval] reached up to 70 months.”

In the coming weeks, we’ll get some more experts to weigh in on this issue. Stay tuned.

Showing 4 comments
  • Reply

    FDA getting tougher with new rules and I can confirm as I look at investing in or buying a new med device company (and from my experience as Chairman and CEO of a successful med device company) that it is getting tougher. In past and future, my planning includes going for the CE mark in Europe first due to timeframes. US FDA still not as tough as Japan, but Japan seems to be waking up and the US is going the other way. My experience with FDA has been very positive and quick, some luck, relationships and reputation for doing it VERY right the first time…but keep getting warned things will slow further. Look forward to more on this from you. By the way like the title! Best, Dave Mulder

    • Reply

      Hi Dave, thanks for the comment! I’d like to speak with perhaps after Thanksgiving for an analytical follow-up blog on this topic. Best, Michael

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