7 min reading time

Dr. Seth Goldenberg gave a talk, “Thinking Globally During Medical Device Development: Accelerating Products to International Markets,” at the 2014 10x Medical Device Conference.

The main takeaway: Bringing medical devices to foreign markets gets complicated very quickly. It’s best if you formulate your strategy way back at the product development stage.

See the video here:

Seth Goldenberg: We already had some great talks about international markets, the importance of them, but I wanted to give a little detail about once you decided to enter these markets, what do you really need to do?

And as the strategies of going to US and Europe first are kind of going to the wayside, you now have to present a global strategy how can you start smart from the beginning during medical device product development to get into these global markets?

We’ve seen different forms of this before, your medical device product development pathway, talking about finding your unmet need, doing concept, feasibility, regulatory strategy, but of course what it looks like in reality is something like this.

You have all these iterations going back and forth, goes to the clinic, goes to a physician, they give you feedback, you go back to design, worst case you actually fail an endpoint on a clinical trial and go back to the drawing board.

So the process to bring a medical device to market isn’t straightforward, and then as soon as you begin incorporating US, Europe, China, Brazil into this matrix…

…it becomes very complicated very quickly, yet there are strategies to begin your medical device development early on while thinking about these other products and having these other countries in mind.

Looking at the medical device product development pathway, thinking early on the global regulatory strategy, is key. And as I mentioned before and we’ve talked before, if you’re an R&D group at a large company and you’re going to go and…

… try to convince a product manager who has P&L responsibility to pick up your product, or you’re a startup looking to an investor, both of those decision-makers want a global strategy.

They want to know, what have you done to prepare to go into China, to go into Brazil. It might not be that you’re there today because you didn’t have the resources before an acquisition, but to show that you’re prepared to get into global markets can be a real significant impact on that decision-maker’s process.

And why do we want to worry about global markets?

Because those are the ones that are growing.

We’ve looked a lot at this data with the previous speaker, and to kind of look at the China numbers just a little bit differently, you can see China’s GDP growth has been growing very significantly. But if you look at the bottom line which shows healthcare expenditures, it’s relatively low. So again, looking at your target markets, how is your product going to be used.

Similar story to Brazil.

Again, we saw a lot of that data in the last talk, but similar case. GDP is rising faster than healthcare expenditures in most of these emerging markets. They want to get rich, they want to get more stable first, and then bring up the other standards of living and healthcare does have a tendency to lag behind.

A case study that TUV SUD presented – and I’ll just talk about here – is the company that wants to get into Europe first.

That’s been the traditional model – go to Europe first. It’s faster. It’s easier pathway. Get in, in a couple of months.

But as soon as you get European approval or any kind of approval, you’re going to start getting emails from distributors all over the world.

They want to sell your product. They want to sell your product, and unless you have that home country approval requirement and meet that, you can’t do anything.

So, historically, for China for example, some people had to go back to their notifying bodies, change their origins, where their country of origin is. China is literally changing the rules on June 1st, 2014. That’s going to make it much harder to do that. Their definition of legal manufacturer is actually changing, so some of those old workarounds are not going to work.

And I was on a call with a rather large company earlier this week talking, “Okay, for our thousand products we have in China, what does that mean?” They’ve used this pathway historically, now what does this mean for our products going forward? How do we address these concerns?

And then once you get into the market, you also have to look at revenue strategy. In the US, you might be on a reimbursement path, but in other markets it might be more of a cost of goods proposition or a market share proposition, and understanding where you fit is clearly very significant.

So getting into the regulatory strategy part, there are several ways to bring products into the marketplace. You might have the best idea in the world, and to bring that into the market directly, it could be disruptive. And no matter where, what regulatory agency you’re talking to, whether it’s the FDA, EU, CFDA in China, disruptive products, few predicates, it’s going to take a while.

You can also think creatively.
• Could I do a series of three or four, 510(k)’s to get there?
• Could I develop some precedents, get some revenue going along the way, ease my path to market?

And that’s actually a fine strategy. If you look at a company like Bard, every six months they’re coming out with a new thing. So if you’re trying to keep up with them and you have a two-year development cycle and you’re betting on, “Okay, they just released this product, now we’re going to try to catch up,” you’re constantly going to be behind. So doing this incremental product development can ease regulatory pathways and still be a fine strategy from a business perspective.

Now, your regulatory strategy very early on can have significant impacts globally. So indications for use in the US, which you then translate directly into China or Brazil, might be a different classification.

So looking at what are the gaps in my regulatory strategy, what are the testing requirements that I’m going to have to do to meet these goals very early on, is important, and we have a lot of cases where just because on their indication for use in the US is fine or Europe is fine, becomes an issue in China, and it has to relate directly. They need differences in paperwork. I’m going to talk about China a lot just because the new regulation just came out. But it can really slow down your registration. So doing that kind of regulatory gap analysis at the beginning, what are my classification requirements, things of that nature, are significant.

And also it impacts testing, labeling, IFUs as well as clinical trials. Again, going back to China, clinical trial requirements in China are going to become much more stringent, so you’re going to have to probably have some Chinese clinical trial data.

So if you’re setting up a global trial, even if you’re going to US or Europe, you might want to include a site in China. Might be a bit of a pain to do that, but it could save you two years of market entry once you decide to go there, and that’s two years of revenue that you would be missing out on otherwise.

Testing. So China, Korea and a lot of the Asian countries don’t really like risk assessments. So something that you might do here if the material has a really strong history in the marketplace, you’re just going to do a risk assessment and have a board-certified toxicologist. I’m from the consulting group at NAMSA. We’re 300 strong on that side and we do a lot of risk assessments. So we have several board-certified toxicologists that do that 40 hours a week if not more.

But that really doesn’t fly in a lot of countries. You have to consider testing.

Implants. You have an implant. Korea and China, they interpret ISO standards a little bit differently and they actually want more endpoints. So when you’re doing your six-month 10993 implant study, if you don’t include a one-week and a four-week endpoint, which no one really does for the US or Europe, that’s not going to be accepted in China. NAMSA test reports are accepted pretty well in China. You don’t have to repeat a lot of your testing, fortunately, but only if you’re meeting those requirements. And that could be an extra 10,000 dollars on a 150,000-dollar test isn’t a big deal. Repeating that 150,000-dollar test and losing that six months to market could be significant.

So these are just some of the considerations that are important. Also, understanding where your testing’s going to be done. While the labs might be nice, you might have to go in educate them on how to actually do your tests, educate them in a nice way about what the products are going to look like.

I actually gave a talk in Korea to the Ministry of Food and Drug Safety three weeks ago, if my calendar in my head is right, about testing and requirements and things of that nature. So they want to learn and they want to be educated. Same thing in China. We’re in China all the time. There’s me and our general manager with the head of the Tianjin Test Lab, who we work with quite a bit. But again, think about how your product’s going to be tested, what are the regulatory requirements, all of that downstream.

Of course, reimbursement. Last talk did a great job on that, talking about how’s my product going to be used. In this picture, they even ran out of a bed for this poor guy. So what you might consider even a common product here in the US might be something high-end there. Incorporate, how much physician training am I really going to have to do to get adoption? So all of those go into consideration.

Moving quickly along, my last slide is post-market. Health economics and post-market requirements is kind of what you have to do now to get reimbursement to show and differentiate from competitors, and that’s true around the world. US, Europe, Asia, wherever you want – health economics is the way to go. We’re doing a lot of clinical trials throughout Asia right now and post-market studies around the world to meet this demand.

Lastly, or in addition to that, what do you need to do to train the sales force of your distributor or to train the physician? And the whole time make sure you’re compliant. Make sure your distributor can meet the local regulations. You might just assume that your Chinese distributor is going to meet all the requirements. They may not be.

And as of June 1st, if you have a class 3 product in China or even a class 2, they have to have a quality assessment to track all of their products until it gets to the end user, to the hospital or physician. And [00:10:36] might be a class 1, okay great, but if they sell class 3’s and come in and get a CFDA audit and get shut down, your product’s not going to get distributed either. So taking a look at your complete distribution pathway to ensure compliance throughout the life cycle is important.

So you can email me here, if you can read it up there, sgoldenberg@namsa.com.

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Pierre Bitoun
bitoun@isonic-medical.com
great talk, quite holistic view of integrated MD development which is helpful.

JT
jt@dreamscapemedical.com
Would it be possible to email your charts — would like to study them a bit.. you’re going kinda fast!

Excellent talk. Thank you.

JT

CEO Dreamscape Medical LLC — (new guys with a fantastic OSA product)