Medical device regulatory strategy – what you need to know about the US and EU markets (part I)
In this and the following blog post, we provide tips on the most relevant aspects to consider when preparing a regulatory strategy for medical devices in the United States (US) and the European Union (EU).
Introduction to medical device regulatory strategy
Anyone who develops and wants to sell a medical device must make a careful decision about the target markets. In addition to commercial decision criteria, such as revenue and market share, regulatory requirements are also decisively important. Those who do not take these into account run the risk of exploding costs and time in product development — the product may not reach the market at all.
There are several factors to consider when deciding which market to enter with a medical device. Market strategy should not be established without regulatory considerations, and should not be only driven by economic factors like revenue and market share. The attractiveness of a market needs to be weighed with regulatory requirements in mind as the time, cost, and complexity of getting and maintaining a medical device approval cannot be underestimated. The regulatory strategy should be set up in the early phases of the product development process, as it impacts the market launch, marketing activities, and therefore the business.
The decision where to start (whether EU first, US first, or simultaneously) has different advantages that need to be considered and must be assessed on a case-by-case basis, depending on the characteristics and features of your device, your company setup, and the corresponding regulatory control. At Decomplix, we see more and more cases where the US is preferred over the EU as the initial market, due to the additional restrictions introduced by the new Regulation (EU) 2017/745 on medical devices (EU MDR) and the related uncertainty.
Your regulatory strategy drives your marketing strategy
Your regulatory strategy is intertwined with your marketing strategy, as gaining access to markets is preceded by regulatory approval. To anticipate the time, cost, and complexity of getting your device approved in a particular market, you (obviously) need to know the regulatory requirements applicable to your device. In almost all markets worldwide, the risk classification determines the regulatory pathway and, therefore, the level of regulatory scrutiny that applies to your device. To classify your device, you need to have defined its intended purpose and intended user as well as a comprehensive list of device functions. Therefore, a regulatory strategy can only be developed once the initial phase of product development is completed. The regulatory pathway is the core of your regulatory strategy.
In order to support your strategic decisions, the basic regulatory requirements in the EU and the US, as well as the main differences, are outlined in the following paragraphs. In addition, there are other regulatory-related factors we suggest to consider when planning the market entry, for example:
1. Your professional resources
Gaining market approval requires effort. You need to ensure you have sufficient and qualified resources to comply with the regulatory requirements.
2. Strategic order of regulatory approvals
Sometimes, a market clearance in one marketplace can be used to support market clearance in others. For example, a Quality System Certification to ISO 134585:2016 is a basis for approval in other countries such as Canada and Australia. Also, it forms the basis for the Medical Device Single Audit Program (MDSAP).
3. Knowledge of your target market(s)
Even though some markets are well known for high-profit margins in general, it is vital to make this decision based on your product and perceived market demands; some markets are more attractive for a specific product than others. This also includes information on distribution channels (e.g. distance sales, restrictions on dispensation of medical devices subject to prescription), reimbursement policies, and similar devices on the market (which would reduce the level of novelty of your device and might simplify the proof of evidence needed for approval).
Ensuring that product development meets all regulatory requirements is essential to meet manufacturers’ competitive challenges. Regulatory considerations are therefore crucial for the success of a business. Achieving marketing capital often depends upon a robust and well-built regulatory strategy.
What aspects to consider in your regulatory strategy?
In brief, your regulatory strategy for a medical device to be launched in the US and EU needs to account for potentially significant regulatory differences in: device qualification, device classification, compliance requirements, and compliance ownership.
1. Device qualification
The same product might fall under the definition of medical device in the US and not in the EU, where it might correspond to a cosmetic, pharmaceutical, consumer product, or another regulatory category. Special caution is recommended for devices intended to administer drugs, since drug-device combination products are regulated under a single set of rules in the US and overseen by a single competent authority whereas they are subject to dual legislation in the EU. Read more in Part II of this blog post.
2. Device classification
The same medical device might be considered a low risk device exempt from regulatory clearance in the US and medium/high risk in the EU subject to Notified Body scrutiny. In particular, the approach differs in the classification of medical standalone software — i.e. SaMD (software as medical device) in US and MDSW (medical device software) in EU. Read more in Part II of this blog post.
3. Compliance requirements
The level of evidence required to prove safety and performance of the device (e.g. clinical data, absence of certain chemicals) might be higher in the EU than in the US for the same medical device. Also, certain processes required to maintain compliance might apply in the EU and not in the US. And the non-standardized UDI systems have finally made it impossible to have the same outer pack label for the US and EU.
4. Compliance ownership
Whereas both US and EU require a local representative when the manufacturer is based outside the jurisdiction, the role and duties of the US Agent vs. the EU Authorized Representative (EAR) differ significantly. Even more important is the different definition of “manufacturer” in both jurisdictions and the fact that a US distributor selling a device under its name or co-packaging several devices might be viewed as the manufacturer in the EU, and be responsible for CE marking. In general, it is vital to make this decision based on your product and perceived market demands; some markets are more attractive for a specific product than others. This also includes information on distribution channels (e.g. distance sales, restrictions on dispensation of medical devices subject to prescription), reimbursement policies, and similar devices on the market (which would reduce the level of novelty of your device and might simplify the proof of evidence needed for approval).
Whereas both US and EU require a local representative when the manufacturer is based outside the jurisdiction, the role and duties of the US Agent vs. the EU Authorized Representative (EAR) differ significantly. Even more important is the different definition of “manufacturer” in both jurisdictions and the fact that a US distributor selling a device under its name or co-packaging several devices might be viewed as the manufacturer in the EU, and be responsible for CE marking. Read more in Part II of this blog post.
What are the main regulatory differences for medical devices between the US and EU?
It may seem obvious but it tends to be overlooked: the US is a country, whereas the EU is the political and economic union of 27 European countries (EU Member States). The US has a definite set of federal legislation on medical devices (in the US Code, USC, and Code of Federal Regulations, CFR), a single competent authority (US FDA), and a single language required for medical device labelling (English).
The EU has established a single market through rules that apply to its 27 Member States as well as to other European countries adopting EU legislation via different types of bilateral agreements (i.e. EFTA countries, Turkey, and European microstates like Andorra, Monaco and San Marino). These countries have adopted CE marking as the mutually recognized conformity assessment process for medical devices. However, each of them has its own legislation, competent authority, and mandatory labelling language(s). In addition, the oversight for CE marking is delegated by competent authorities to third-party accredited organizations, the Notified Bodies. And, the United Kingdom (UK) left the EU in December 2019 and will be setting its own separate process for medical device clearance.
For a long time, the EU market was the starting point for medical device commercialization, being known for relatively timely market approvals. But the implementation of stricter regulations through the EU MDR and the tendency to deregulate in the US have changed this picture and invited a lot of criticism that the EU market would lose its attractiveness for medical device innovation.
Further information about regulatory strategy
Developing an efficient regulatory strategy can be a challenging task and requires a lot of knowledge in different areas. The strategy is crucial for the success of a company because a product can only be brought to market if all regulatory requirements are met. Time is of the essence, but it is precisely this factor that is difficult to control and often the effort and complexity of obtaining and maintaining approval or certification of a medical device is underestimated. Therefore, it is crucial to ensure sufficient professional and human resources for market authorisation, in-house, or outsourced.
The first step consists of identifying the key target markets and evaluating the overall scale of the effort to gain market access through regulatory approval. This requires a detailed understanding of the regulatory framework as well as a well-constructed strategy plan, which defines the appropriate requirements, activities, and responsibilities.
You can find more basic information on the regulatory requirements in the EU and the US in the second part of the blog post. In it, we explain the differences in the definition and qualification of medical devices and the assignment of the regulatory procedure based on the risk class. We also explain who can sell medical devices in the EU and the US and how the requirements for economic operators differ.