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Joe Hage
🔥 Find me at MedicalDevicesGroup.net 🔥
October 2016
How to Save Costs on Your 510(k) or PMA
6 min reading time

Did you know 77% of the cost to develop a 510(k) device is spent in clinical research and regulatory submissions? It’s 80% for PMA devices.

“A lot of that cost is due to how poorly we handle data,” explained Jim Rogers, President of Nextrials, at the 10x Medical Device Conference.

His 10-minute video, slides, and transcript at http://medgroup.biz/nextrials

Jim’s solution is “why didn’t we think of this before” simple: Re-purpose electronic health record (EHR) data as the source data for clinical research.

Jim: “FDA wrote a Guidance. It came out September 2013 to give people action items around using electronic source.” If you re-use the data you already have, you’ll:
• Eliminating duplication of data entry.
• Eliminating or reducing transcription errors.
• Remotely accessing your source data.

And Jim anticipates your question: “There’s so many EHR systems, how could we ever begin to integrate with them?”

Check out http://medgroup.biz/nextrials for his answer and I shared his direct LinkedIn profile address at that link if you want to follow up with him.

What do you think of the concept?

Would it save you money? And if you’re already in a 510(k) or PMA process, is it too late to take advantage of the idea?

Ask Jim in private or in today’s comments.

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Make it a great week.

Joe Hage
Medical Devices Group Leader

P.S. We’re hosting Jon Speer’s 13485:2016 webinar in a few hours at http://medgroup.biz/iso13485. Register now or, if you miss the live event, click through for the replay.


Julie Omohundro
Principal Consultant at Class Three, LLC
Jim, sorry, you just happened to hit two different hot buttons for me, so I should have counted to 20 when I only counted to 10. My reaction had absolutely nothing to do with your product.

I do think a good number of people in this industry will raise more than one eyebrow at the statistics you quoted, so unless they are central to your product presentation, perhaps you might wish to reconsider.

I read that report for the first time some time ago now, and have not yet been able to bring myself to read it again. However, I don’t remember it as having provided any details regarding what expenses were included under “FDA dependent and/or related activities.” Might you be able to provide a page number?

Julie Omohundro
Principal Consultant at Class Three, LLC
Matthew Bell, I think much of the inefficiency originally associated with clinical data collection were significantly reduced when trials started using electronic data capture. One can always increase efficiencies, but you do reach a point of diminishing returns.

How much more efficiency remains to be realized in this area, I can’t say, but I agree that it would probably be…well, maybe not so much product specific as study specific. There is probably limited efficiency to be gained in the collection of data for a small feasibility study, for example, regardless of product.

I also think a good bit of study data can be unique to the study and not get entered into the EHR. If you have to set up a system to capture these data, it may be just as efficient to use the same system to capture all the data, rather than trying to consolidate data from two separate systems.

It will be interesting to see where this goes.

Julie Omohundro
Principal Consultant at Class Three, LLC
I’m not sure about a trial in which the site coordinator never leaves their EHR system, without an EDC or clinical trial database. If there is no EDC, how do the data get transmitted to the study sponsor? Directly from the EHR? This would seem to raise privacy issues that would have to be addressed to the satisfaction of the IRB and the subjects.

Jim Rogers
President, Nextrials, Inc.
The costs I quoted were defined in the study as the amount “spent on FDA dependent and/or related activities”. This includes expenses related to clinical trials used for regulatory submissions. The EHR integration technology I described is an efficiency tool designed to reduce the cost of collecting clinical data and source data verification for these trials.

Julie Omohundro
Principal Consultant at Class Three, LLC
Given the nature of your product, I’m not clear on why you want to highlight “regulatory related” costs. As I understand it, your product is intended to reduce design costs, not regulatory costs.

Julie Omohundro
Principal Consultant at Class Three, LLC
A couple of points of clarification…

When I said “past Statistics 101,” I did mean “past,” not “passed.” Statistics 101, like most introductory courses, is designed to “introduce” students to a discipline, not to teach them how to practice it. For that it is necessary to go on to a more advanced class or, preferably, classes.

I wasn’t referring to the background of the author, who might or might not have taken Statistics 101. Since the study has been completed and the report has been released, his background is now moot.

I was referring to the background of the audience. There are many people in the device industry who have the ability to assess the likely validity of these statistics for themselves. There are also many who do not.

Julie Omohundro
Principal Consultant at Class Three, LLC
FDA released a draft guidance on the use of EHR in clinical trials a couple of weeks ago, with a 60-day comment period:
http://www.fda.gov/downloads/Drugs/GuidanceComplianceRegulatoryInformation/Guidances/UCM501068.pdf

Julie Omohundro
Principal Consultant at Class Three, LLC
What is it they say about assumptions?

Jim Rogers
President, Nextrials, Inc.
I pleased to see the discussion this has generated! I agree with Anil that “not knowing how to get to market” can create significant development costs, especially when measured by the opportunity costs mentioned by Matthew. Those costs are hard to quantify and are beyond the scope of the study I referenced. The results I quoted are from a study conducted by Stanford University researcher Josh Makower, MD and was sponsored by the Medical Device Manufacturer’s Association. (Both Dr. Makower and the MDMA have more than a modest amount of knowledge regarding the development of 510(k) and PMA devices and I can only assume Dr. Makower got a “C” or better in Statistics 101.)

The full report is here: http://www.medtecheurope.org/sites/default/files/resource_items/files/01112010_FDA%20impact%20on%20US%20medical%20technology%20innovation_Backgrounder.pdf.

My only point was to highlight the regulatory-related costs associated with developing medical devices.

Julie Omohundro
Principal Consultant at Class Three, LLC
Has someone has successfully hacked into corporate financial records industrywide and nobody told me? Otherwise, I think it’s a given that no one knows how much it costs to develop “a 510(k) device” or “a PMA device,” nor what percentage is spent on what.

However, for anyone who knows a modest amount about what is involved developing a 510(k) device and a PMA device, including any clinical trials and regulatory submissions, and who got past statistics 101, it’s not hard to work out that the percentage spent on clinical research and regulatory submissions for “a 510(k) device” cannot be remotely close to the percentage spent for PMA devices, given that over 77% of 510(k) devices aren’t supported by any clinical trial at all, and that putting together the average 510(k) requires a fraction of the time and effort of a PMA.

Joe Hage
🔥 Find me at MedicalDevicesGroup.net 🔥
Good point, Matthew Bell. Jim Rogers, I’m interested to hear your reply to Anil’s statement.

Ananth V.
Technology services
Wow! here you go the first step deliver safe and cost effective healthcare.

Matthew Bell
Vice President – Sales & Marketing at Fujirebio Diagnostics, Inc.
This is a great platform to reduce errors and increase quality of the submissions. The real cost of 510K and PMA approvals, however, is the opportunity cost of every single day the product is not on the market. Anything that will reduce time to market and create competitive advantage is enormous. It would be interesting to know what impact this approach with EHR would have. I surmise that it is product specific.

Anil Bhalani
Consultant – Regulatory Affairs/Quality Assurance
I think it is IGNORANCE, not knowing what to do that is the biggest cost to market.

Are you talking of FDA 510(k) and FDA PMA. Because the cost to develop a 510(k) or a PMA is very minimal compared to the cost of developing and testing the product. It is miniscule for smaller companies as their fees are substantially reduced. The challenge with an FDA 510(k) and PMA is the timelines, which in the case of the 510(k) are approx. 90 to 120 days, which are not much if you plan your project right. I can cite many experiences where the device was approved and the product was not ready for shipment. In fact I have one example now where the 510(k) was approved over a year ago and the company is working through its manufacturing automation issues to place the product on the market.

Of course if you add the cost of demonstrating that the device is safe and effective: cost of testing a device into 510(k) cost that will make it expensive.

Lisa Bacon
ISO Compliance Lead and QA Analyst at Wilmington Healthcare
Interesting read

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Posted by Joe Hage
Asked on October 4, 2016 8:02 am
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