The medical device industry is facing a generational change in the regulation and validation of its products. Today, more than ever, physicians, patients, and payers are demanding solid evidence that the devices they prescribe, use, and pay for performs to the highest standards and is backed by significant clinical data. In many cases, these standards are being driven by hospital value analysis committees, who increasingly act as gatekeepers for their institutions.
This trend, combined with a more stringent regulatory approach by the FDA, particularly with regards to regenerative medicine technologies, means that the familiar framework that industry has worked with for the past 40 years will become more demanding. Companies that want to succeed commercially in this new environment will need to take an increasingly rigorous approach to the development and validation of their products.
The Historic Framework for Device Approvals
The medical device regulatory playing field was largely set in 1976 with the passage of the Medical Device Amendments to the 1938 Food Drug and Cosmetics Act. This was intended to provide the public with reasonable assurances of safety and effectiveness and created a three-class, risk-based classification system for all medical devices.
Under the Amendments, the prime regulatory pathways for new medical devices (devices that were not on the market prior to May 28, 1976, or had been significantly modified) were: premarket approval (PMA) and 510(k) clearance. They also created a framework for new investigational medical devices to be studied in patients (investigational device exemption) and established several key post-market requirements: registration of establishments and listing of devices with the FDA, good manufacturing practices (GMPs), and reporting of adverse events involving medical devices. This also gave FDA authorization to ban devices.
Currently, the vast majority of medical device companies bring their product to the U.S. market through the 510(k) pathway. A 510(k) submission provides FDA with documented evidence to prove that a medical device is substantially equivalent to a predicate device.
Some 95% of the devices reviewed through this route are cleared by FDA. However, the relative simplicity of the process combined with the extremely high level of clearance does not inspire confidence for stakeholders. Nor do 510(k) products introduced into the marketplace command the highest values.
Regenerative Medicine Adds Complexity
Regenerative medicine therapies add another layer of complexity to this issue. Whereas medical devices are mechanical in nature, based on a predicate device and limited in updates that can be made, regenerative medicine products provide an additional pharmaceutical/biologic attribute that can have a much greater therapeutic potential.
These types of human cells, tissues, or cellular or tissue-based products (HCT/Ps) are reviewed through two regulatory pathways – through Sections 351 and 361 of the Public Health Service Act (PHSA), which are overseen by the FDA’s Center for Biologics Evaluation and Research (CBER). Basically, 351 products are regulated as drugs and/or biologics, while lower-risk 361 products, comparatively, are largely unregulated.
The approval pathway for these so-called “361 HCT/Ps” is faster, less time-intensive, and less expensive. These products are not subject to FDA pre-approvals and as a result, are not required to have any clinical data prior to marketing. In fact, they are subject to little or no FDA requirements regarding manufacturing and clinical programs.
They are essentially “self-launched” by companies who must voluntarily adhere to a four-step guideline process to ensure that they are “minimally manipulated,” intended for “homologous use only”, are “minimally preserved”, and not dependent on the “metabolic activity of living cells” for their primary function. Unfortunately, many companies take advantage of this voluntary and virtually regulation-free process to bring to market unproven, untested and, in some cases, unsafe 361 products.
Alternatively, blood-derived cell or tissue-based products that fall under the category of 351 are determined as such either because they are more than minimally manipulated, or they are used for non-homologous treatments.
Regenerative medicine companies must bring these products through a substantially more laborious, time-intensive and expensive biologics license application (BLA) process to be approved by FDA. This typically requires two randomized clinical trials to demonstrate effectiveness on a superiority endpoint and reproducibility at the time of approval.
Ultimately, regenerative products that have undergone this “highest” level of rigor have the most value in the marketplace. Understandably, this more rigorous regulatory process inspires more confidence from stakeholders who are making decisions of what therapeutics to work with and to approve coverage for. Traditional medical device companies will be challenged in the future if they try to make regenerative medicine claims or command premium pricing for products that are cleared via 510(k) or 361 pathways.
The Growing Influence of Hospital Value Analysis Committees
One of the key drivers of the move to more rigor in the development of devices and therapeutics is the expanding role of hospital value analysis committees. In the past, simply getting physician support could be enough to get a device purchased. Today, with an increased focus on cost savings and products that can help reduce stays and readmission rates, hospital VACs are having an outsized impact on purchasing decisions.
Not surprisingly, clinical data forms the cornerstone of hospital value analysis programs. Companies presenting their products to these analytical and outcome-focused committees will need to demonstrate a strong clinical benefit and be able to point to independent research to support the benefit being claimed. This trend obviously bodes poorly for those products that take a less clinically rigorous path to the marketplace.
Importantly, without the approval and strong validation from these multiple stakeholders - physicians, patients, and payers - companies introducing their devices into the treatment landscape can be met with skepticism.
Building Commercial and Market Value
When a therapeutic company takes their product to market through the demanding BLA process, for instance, or undertakes extensive additional studies, they prove to stakeholders their commitment to quality, safety, and efficacy. Products that are supported by multiple, well-designed randomized clinical studies can demonstrate that their technology is superior to the standard of care, and hence, be valued higher in the marketplace.
Companies pursuing the faster, less rigorous route may indeed have a therapeutic with great potential, however, they could be disadvantaged when trying to communicate that their technology provides a benefit or is demonstrably superior to a technology it is meant to replace. Since these products would be deemed to be “substantially equivalent” as part of the 510(k) clearance process, or in the case of 361’s, have little or no clinical data to with which to determine benefit, what could be their superiority?
The 510(k) regulatory process has and will continue to produce many great technologies that benefit patients, but it will increasingly become a difficult commercial pathway for technologies that claim a regenerative and/or therapeutic effect. The challenge for medical device and regenerative medicine therapy companies will be to invest the significant time and funding for the more appropriate and, ultimately, more commercially valuable pathway.
By making a commitment to a more rigorous approach, the quality, safety, and effectiveness of patient treatment options can improve significantly, which is what every company and stakeholder alike should be prioritizing.