The company's story shows it is possible to make money while conducting market research.

Nigel Syrotuck

With the adoption of the Internet, the role of the middleman is dying. Products can now be sold faster and more profitably directly to the consumer. Enter FDA, whose job it is to protect the consumer from unsafe and ineffective medical devices, drugs, treatments, and diagnostic devices. Thankfully, FDA recognizes that some products do not need regulation. Wellness devices (such as stress balls) and wellness drugs (such as vitamins) have been sold freely for years.

Now we've entered the age of wellness tracking devices, which perform non-critical health monitoring. Like vitamins and stress balls, these take a preventative approach and have the power to quickly start helping people lead healthier lives.

23andMe

23andMe, for example, is a company that will sequence part of your DNA for just $199 (in Canada). This product is considered a wellness system because they are giving you information, not making conclusions. It’s like telling someone they have a lump on their heart but not telling them they have cancer. This is an interesting case study because the company successfully argued for a time that they were only providing information, not conclusions (part of their business was shut down in 2013). Shortly thereafter, FDA reacted to the development of wellness devices.

This is adding clarity and paving the way for the next players to develop a direct-to-consumer marketing strategy without the risk of being slapped with an FDA warning.

What Makes It a Wellness Device?

So can you market your diagnostic device directly to consumers? It depends on whether it is a wellness or medical device. Wellness devices must not treat an illness, only help maintain or promote a healthy lifestyle. Devices such as Fitbits, brain training games, and weight management apps are all considered wellness devices by FDA.

23andMe’s genome sequencing product is also a wellness device, as it doesn’t actually diagnose anything. There are many types of diagnostic medical devices, some of which are sold directly to consumers (like ultrasounds, blood oximeters, and glucose meters), and some that are not, but all of which are approved by FDA and which users rely on to make essential health decisions.

Which side of the line is your device on?

You’ll notice that 23andMe walks the line between these two very closely. The coming year will bring a number of rulings clarifying where the line is and what it includes. 23andMe just announced that it has raised $79M to pivot their business to drug development (an expensive industry), which completes their traditionally backwards strategy of marketing to the masses first, then health care providers later. This is an outline “wellness first” model:

Identify want or need > design solution > produce effective device > market as wellness monitoring device ($) > collect anonymous data > repurpose and obtain FDA approval > market as medical device ($$$)

This model is quickly gaining popularity, and it’s easy to see why—the required starting capital is lower, users can become familiar with the technology sooner, and money starts flowing in that can be used to support clinical trials in later stages. There aren’t a whole lot of products that have completed this model fully, but many wellness devices are being pivoted for FDA approval to open the market to doctors and health care professionals.

Companies that go this route also get the bonus of having a history of accurate monitoring to back their claims (this is a good place to note that FDA doesn’t allow you to say “FDA approved” on your device). Another benefit is that the database of user information a wellness device creates can be used to determine the exact clinical requirements of the medical application—the first step in identifying a problem is to measure it. You can bet that it’s no coincidence that 23andMe is suddenly heading into the drug business. Their wellness product taught them all about genome statistics and target markets.

The Other Side

One major risk with an unregulated device is exactly that: early customers of companies like 23andMe were at the mercy of their testing results without any clinically-proven guarantees. This makes it all the more essential to follow all FDA guidances on good design practices, even for wellness devices, that promote effectiveness for customers and provide a solid foundation for clinical trials and future submissions. Taking shortcuts can result in a low-quality wellness product that can taint the reputation of the developer, forcing them back to square one when it comes time to create a clinical version.

I would be remiss without noting the benefits of doing the opposite: creating an FDA-approved diagnostic device and then branching off a second wellness product. The regulatory path is well defined, the technological risks are addressed up front before the product is released, and it is inherently easier to make a wellness product when your predicate is a clinical device with the right design team. As long as you have lots of cash (and time) up front to support it, this model can also be effective.

In Conclusion

Even though medical device investments are growing, the wellness first model used by 23andMe is likely to gain traction as a way to get a healthy lifestyle tool to market without the middle man, and through clinical trials without heavy investment up front. I hope that medical devices that are suitable for both wellness and diagnostics consider adopting this strategy to give people who need wellness support the ability to start improving their lives sooner, and ensure more devices make it to clinical trials in the long run.

Nigel Syrotuck is a mechanical engineer at StarFish Medical, a medical device design company headquartered in Victoria, British Columbia.

[Image courtesy of 1SHOTS/FREEDIGITALPHOTOS.NET]