While the US Food and Drug Administration has chiseled away pharmaceutical review times over the years to speed innovative drugs to market, the opposite seems to have occurred in the agency’s approval of medical devices.
Instead of speeding innovative first-mover products to market, devices such as implantable defibrillators or transcatheter heart valves, the FDA’s regulatory approval process appears to delay those approvals, which in turn adds to development costs borne by device manufacturers, according to Innovation under Regulatory Uncertainty: Evidence from Medical Technology, a new working paper by Ariel Dora Stern, an assistant professor at Harvard Business School.
“There is a huge delay associated with being the first product to enter a new device market”
She found that first movers in a particular category spent 7.2 months longer in the approval process than the first follow-on innovator. By contrast, previous research by Harvard’s David Carpenter and others found that first movers in new chemical drug categories typically receives the fastest FDA approval, with every follow-on drug in the same category taking about 1.2 percent, or about a third of a month, longer.
A DELICATE BALANCE
For nearly 80 years, the FDA has performed a delicate balancing act between getting life-saving drugs to market, and ensuring that those drugs will be safe when taken by patients. In order to serve that dual function, the FDA has drawn up sophisticated rules to test new drugs and devices—first on animals and then on humans in clinical trials.
“For new chemical drugs, it’s typically relatively straightforward to know how to move toward approval,” says Stern. “Clinical trials take time and lots of money, but ultimately if you have a molecule that is safe and effective, and if you do your statistics correctly, you get regulatory approval.”
However, as medicine has become increasingly more sophisticated and the line between medicine and technology has blurred, many new therapies are not drugs at all—they are devices. In the past several years, the $125 billion medical device market has grown at a rate of 6 percent annually in the United States.
The FDA has only regulated medical devices since 1976—half as long as it has regulated drugs. As Stern talked to manufacturers of medical devices, she found that the approval process for them was not nearly so straightforward. “I kept hearing how frustrating and non-transparent the process was for getting a novel medical device approved,” says Stern.
The implications can literally mean the difference between life and death for patients.
“One device I am studying allows you to replace a heart valve through a catheter inserted in the thigh, rather than doing open-heart surgery,” she says. “It allows a whole group of people who are very sick to get a procedure they never would have been able to get before.”
That device, Edwards Lifesciences’ SAPIEN transcatheter heart valve, was approved in Europe four years before it was approved in the United States—the 40th country to do so.
Stern decided to research just how difficult it is to get new products such as that one to market—and, more importantly, why it might be taking so long.
RESEARCHING DRUGS VERSUS DEVICES
She started with three decades of data from FDA databases on the approvals of all new drugs and high-risk medical devices between 1977 and 2007, measuring how long those approvals took for products in different categories. (A high-risk device was defined using the FDA’s standard as one that “supports or sustains human life or is of substantial importance in preventing impairment of human health or presents a potential, unreasonable risk of illness or injury.”)
The high-risk devices Stern studied included devices to treat patients with severe cardiac diseases, including pacemakers, coronary stents that prop open blocked arteries, and implantable cardioverter defibrillators that submit pulses to regulate heartbeat. In addition, the study encompassed all other categories of high-risk products, such as tracheal and bronchial tubes to treat patients with emphysema and other lung ailments; many prosthetic limbs, joints, and digits; intraocular implants to correct seeing impairments; and breast implants for reconstructive surgery for patients after undergoing mastectomy procedures.
Previous research on drugs had found that, on average, the first entrant in a particular product category was the fastest to be approved, with each follow-on drug in the same category taking 1-2 percent longer.
“That suggests there is something more administrative in the delays-something in the classification process that matters”
For medical devices, on the other hand, Stern found the opposite trend—and dramatically so. The first device in any given category—say, a coronary stent—took on average 34 percent longer to be approved than the next device in that category, leading to an average delay of 7.2 months.
“There is a huge delay associated with being the first product to enter a new device market,” concludes Stern. “As you can imagine, that results in a big cost for folks trying to bring new products to market.”
In fact, Stern conservatively estimates that delay costs firms an average of $6.7 million on top of the $94 million average price to bring a new high-risk medical device to market. That extra cost can dampen the ability of companies to pursue new innovations. Indeed, Stern found that small firms (defined as non-publicly traded companies with revenues under $500 million) made up 14 percent of total entrants for follow-on devices, but only 7 percent for novel devices—meaning they were only half as likely to pursue first-in-class technologies.
“Small firms that have less financial flexibility are less likely to take on these pioneer roles,” says Stern. “It’s not that big firms are having all of the ideas. Bigger companies are just the ones that are more likely to take on the task of bringing a novel high-risk product to market.”
The big question: why?
DEVICE TESTING IS DIFFERENT
It’s certainly true that clinical trials for medical devices are not as straightforward as those for drugs. While drugs may have different effects or methods of action, trials essentially consist of monitoring patients for proper dosage, effectiveness, and side effects.
Medical devices, meanwhile, can differ from each other in almost every respect, including how they work, how they are applied to the patient, and how their effectiveness is measured. This forces the FDA to make ad hoc rules for the testing of each new device in order to properly gauge safety and effectiveness.
When Stern looked more closely at the numbers, however, she discovered a curious paradox. The FDA categorizes devices based on their function, not their underlying technologies. She found that devices based on certain technologies placed in already existing product categories did not take as long to approve as devices using the same technologies that were placed in new categories.
“It wasn’t ‘wow, we’ve never seen this kind of product’ that led to the longest delays. Rather, we observed many big regulatory delays for devices that are put in new product categories, but built on technologies the FDA is already familiar with,” says Stern. “That suggests there is something more administrative in the delays—something in the classification process that matters.”
In other words, the FDA may be adding additional delays to the medical device approval process by defining from scratch regulatory requirements for technologies it has already tested in other settings.
Stern is more closely examining those procedures to determine exactly where the bottlenecks occur. In the meantime, she notes the value proposition for companies when the FDA publishes detailed guidelines for the approval of new devices.
“It certainly seems to be the case that the publication of clear guidelines about what is expected in the regulatory approval process can accelerate that process without thus far any evidence of safety concerns,” says Stern.
In other words, just by streamlining its procedures and new product requirements, the FDA can shave months off the time that it takes to get needed devices into the hands that need them—eliminating suffering and potentially saving lives in the process.