The Biggest Mistake Entrepreneurs Make with FDA

Regulation can be a challenge for startups. Hear what one expert said was the biggest mistake she saw entrepreneurs make in approaching FDA during her years at the agency.

Marie Thibault

It can be tough to accommodate both disruptive innovation and regulation.

That was one main takeaway from a session this week at the 2016 South by Southwest Conference (SXSW) loaded with practical tips for the healthcare-focused entrepreneur. Experts, including a veteran of FDA, spoke candidly about the burdens—and blessings—of regulation in medtech, digital health, and other areas of healthcare.

The panel, titled "Under My Thumb: Regulation and Healthcare Disruption," was held Monday at SXSW in Austin, TX. 

Entrepreneurs should not extoll how disruptive their product will be when interacting with FDA regulators, said Heather Rosecrans, vice president of regulatory affairs at the Medical Device Manufacturers Association and executive vice president of medical devices and combination products at Greenleaf Health LLC. Rosecrans was previously director of the 510(k) pre-market notification staff at CDRH. The biggest mistake a company can make at FDA, she said, is presenting a new invention as disruptive. "The greater you say it is," she said, the more FDA "digs in." Later in the discussion, Rosecrans added, "saying this will change the practice of medicine is not the best way to approach [FDA]."

Instead, entrepreneurs should find ways to build bridges or highlight similarities to other devices or inventions that have already received regulatory go-ahead, said James Eadie, MD, MBA, a principal at Santé Ventures. "Don't disrupt everything," he said, urging the importance of stepping stones and the way entrepreneurs tell the product's story.

The challenge with labeling your product a "disruption" is that FDA will likely require the product to go through the PMA route to regulatory approval instead of the less-taxing 510(k) process, which the large majority of medical devices use to reach the U.S. market. The length and risks of the PMA pathway has historically meant that venture capital firms would say "no way" to funding such a product, said Eadie.

Health-related companies can't risk forging ahead without a plan of strong regulatory advice, Eadie said in response to a question about whether it is easier to ask for forgiveness or ask for permission when it comes to regulatory strategy. The wrong decision or assumption could potentially mean wasting millions of dollars and years on clinical studies that may not be what a regulator needs to see. That approach, he said, doesn’t involve just asking for forgiveness, but may mean asking for “a pink slip!”

Still, regulation doesn't have to be a threat to the entrepreneur. Eadie noted that FDA is becoming more "reasonable"—strong praise from a venture capitalist—and said the agency's initiatives, including allowing more cardiovascular early feasibility studies in the United States, have helped narrow the domestic innovation gap with Europe.

Finally, regulation can be a win for a startup, Eadie said, because successfully navigating its challenges could result in a period of market exclusivity and derisk the path forward.

Marie Thibault is the associate editor at MD+DI. Reach her at [email protected] and on Twitter @medtechmarie. 

[Image courtesy of STUART MILES/FREEDIGITALPHOTOS.NET ]