New Global Compliance Requirements Will Impact Medical Device Industry

The medical devices and diagnostics (MD&D) industry is on the verge of disruption, as new global compliance requirements are set to take effect. In March 2019, the 2016 revision to ISO 13485 will require the incorporation of risk management into every aspect of the quality management system. Also, the European Commission ratified new medical device regulations (MDR) for all European member states, while FDA released more than a dozen new medical device guidance documents in 2016 and 2017 that set new expectations for risk assessment.

As a result of these changing regulations, MD&D companies are urgently working to get ahead and update their operating processes. This means finding ways to increase operational visibility internally and externally, enable transparent content and data management across all functions, and improve efficiency—especially in clinical, where the number of studies is expected to increase dramatically.

New Regulations Create Heavier Burdens in MD&D

The new FDA 510(k) requirements for device clearance will make the submission process longer and more involved. Also known as Premarket Notifications, the FDA 510(k) submission specifies unique content and format provisions for a range of medical device types and classifications to demonstrate that the product is safe and effective. In Europe, the stricter Medical Device Regulation (MDR) went into effect this past May to replace the current Medical Device Directive. Companies have three years to comply with MDR, which addresses concerns over the assessment of product safety and performance. MDR places stricter requirements on clinical evaluation and postmarket clinical follow-up, and requires better traceability of devices through the supply chain.

“An increased concern for public safety is prompting big changes,” explained Andrew Tummon, director of global clinical affairs at Integra LifeSciences Corporation, a world leader in medical technology including orthopedic products, surgical instruments, and neurosurgical devices, implants, instruments, and systems. “By 2020, the device industry must show clinical evidence for the effectiveness and safety of both new and existing products—this means new clinical trials. The EU previously required a clinical evaluation report and literature review for many products. These reports involve the assessment and analysis of clinical data pertaining to the medical device to verify its clinical safety and performance.”

Tummon added that companies will need to make hard decisions on determining which existing products are worth investing the tremendous resources to conduct clinical studies that meet new EU requirements. The increasing number of clinical studies will impact costs, processes, outsourcing strategy, and even organizational design. “These new regulations will require a significant change in operating processes for global medical device companies or any company that sells into Europe,” noted Tummon.

For small medical device manufacturers, time really is money, according to William Maisel, MD, MPH, deputy center director for science and chief scientist at CDRH. During a recent presentation, Maisel noted that when FDA requires a 30-employee company to conduct an additional 20-animal study, it costs about $5.5 million. An additional 100-patient study with a one-year follow up would rack up a bill of more than $24 million. “A really great product can die if we’re not thinking about time and not striking the right balance in our evaluation,” Maisel said.

Given that the majority of MD&D companies in Europe and the United States are considered small to medium-sized, employing 50 people or fewer, the economic impact of these new regulations will be far-reaching.

Manual Processes and Legacy Systems Make Compliance Difficult

Even as MD&D companies bring remarkable innovations to market, they have largely relied on dated technology—maintaining manual, paper-based processes and home-grown, on-premise legacy systems. For example, many continue to use email to share documents and information. Traditionally, these organizations have been less motivated to invest in new enterprise systems because their businesses have enjoyed attractive operating margins between 23% and 25% with 5% annual growth.

However, a sharp rise in adverse events over the last three to five years has prompted increased regulations that strictly enforce a standard way of operating. In 2015 alone, FDA issued a total of 3525 Form 483 Inspectional Observations to 924 medical device companies relating to 21 CFR Part 820, and issued 121 warning letters—a significant rise over the past decade.

Existing processes and systems simply do not support the broad visibility and control needed to meet new requirements nor do they enable the kind of efficient collaboration with external partners that so many device companies rely on today. Most importantly, these manual methods increase compliance risks. In fact, many device companies' quality management systems simply do not meet the new 2016 ISO requirements.

Legacy systems are traditionally inflexible, often taking external consultants months of re-programming to adapt to changing regulations and market conditions. In addition, data and documents are trapped in multiple applications or in paper files, making it difficult to get a comprehensive view of status and share information with valued partners. Teams duplicate efforts or spend time going in and out of static documents and logging in to separate systems. It’s also hard to get a detailed audit trail throughout the different stages of product development to support increasing requirements.

Next-Gen Technology Opens New Doors

Many leading companies are adopting modern systems that enable greater control, automation, and visibility across the supply chain to deal with changing compliance requirements around the world.

“As medical device companies are forced to conduct more clinical trials, advanced technology becomes critical,” Tummon pointed out. “It’s not sustainable to hire more and more people to manage an increased number of trials. At Integra, we want to completely eliminate paper and paper-based processes, automate, and generate reports at the press of a button. With streamlined processes and capabilities to complete tasks in real time, from anywhere, we can optimize staff time and clinical research associates can more easily execute their jobs. It’s the key to getting ahead of this compliance curve.”

Modern technology systems enable greater collaboration. This is particularly important now as device companies will need to outsource specialized work to more external partners to handle increased regulatory requirements. “Increased number of clinical trials will trigger more companies to outsource rather than build large internal staffs to manage studies,” noted Tummon. “At Integra, we will require CROs to use our cloud-based eTMF (electronic trial master file) and clinical trial management systems so we can better assess vendor performance and track progress. The ultimate responsibility for regulatory compliance always lies with the medical device company.”

Advanced technologies eliminate those silos to provide greater transparency across therapeutic groups and regulatory authorities. In the cloud, systems are easily accessible to allow all stakeholders to edit, review, and approve documents without pulling from multiple sources or struggling to get behind a firewall. Most importantly, tasks are documented through the entire product life cycle, establishing a reliable audit trail from the moment a record enters a system until archival. Key data is automatically captured so companies can easily generate reports and capture valuable insights.

One leading medical technology company recently discovered limitations with information sharing and visibility as each internal group used its own system. Executive management could not efficiently gain insights for decision-making. The company decided to move to the cloud and harmonize technology across all operations to streamline business processes from end to end and establish a common framework for continuous improvement. With a modern content management solution, the organization redesigned business processes globally to better align teams, ensure compliance and control, and reduce time and costs.

Taking It to the (Multitenant) Cloud

Moving forward, many medical device companies are adopting a “cloud first” policy that eliminates the need for infrastructure and software investments and simplifies IT management. With cloud providers responsible for upgrades and maintenance, IT staff can concentrate on core business activities, and piloting new technology becomes cheaper, easier, and faster.

“Just as the pharmaceutical industry realized, the devices industry can benefit from cloud platforms that allow companies to manage more with less,” said Tummon. “Plus, cloud applications allow us to work smarter and from convenient locations. Remote workers and frequent travelers can upload reports in real time from investigative sites, hotels, anywhere . . . saving time and improving accuracy.”

Figure A: Multitenant Cloud Defined

To explain a multitenant cloud, think of a neighborhood versus an apartment complex. In the neighborhood, homeowners maintain their own property within a community much the same way that a customer in a single-tenant cloud structure manages a dedicated server to run their own version of an application. In the apartment or multitenant model, maintenance and upgrades are handled by a third party. However, owners can customize their apartments any way they want. Much the same way, the provider of a multitenant cloud solution handles all system upgrades, which are transparent and automatic to the user but customers can customize their version or “instance” of the software to meet their needs. Applications are scalable to meet users' changing requirements. It’s this multitenancy that delivers all the highly touted benefits of cloud technology, like cost efficiency and flexibility.

The key is to adopt a multitenant cloud solution rather than a hosted or single-tenant cloud system. Multitenancy is cloud’s hallmark and the defining factor that enables dramatic economies of scale. While one software application serves different “tenants” or companies, authorized users can only access their data and their unique instance of the application. Traceable and constantly current, data is always ready for an audit. Companies can integrate a suite of applications onto a single cloud platform to enable transformation across clinical, quality, medical, and commercial business processes.

A multitenant cloud solution saves companies from having to purchase expensive hardware, troubleshoot problems, or maintain the infrastructure. The provider handles all system upgrades, which are transparent and automatic to users who benefit from always working on the latest application release.

Because the model is scalable, companies can quickly make changes and deploy new features and functionality in response to regulatory changes, market fluctuations, and technology innovation. In a client/server environment, a simple field change may require weeks to months of reconfigurations and data migrations. Changes in a multitenant cloud system take just minutes.

“As new regulations force medical device companies to conduct more clinical studies to remain in compliance, new technology platforms will help them to work more efficiently,” Tummon concluded. “While medical devices remain a high-growth area in terms of innovation, next-generation technology is the key to working smarter, faster, and maintaining the competitive edge.”

Device companies must take action now. The global MDD industry is forecast to grow at a CAGR of 5.3% to $475+ billion through 2020. If companies don’t find a way to handle the increased regulatory demands, they risk losing out on the rewards of a high-growth industry with great importance to the future of medicine.