AAMI News September 2016

Harvard Paper Links Review Times to Device Innovation Incentives

The longer it takes for new medical technologies to be approved by the Food and Drug Administration (FDA), the fewer incentives there are for manufacturers—especially small companies—to innovate. This is the key finding of a research paper published this summer by the Harvard Business School (HBS).

In her working paper, Ariel Dora Stern, an assistant professor of business administration at HBS, was interested in finding out if “the regulatory approval process currently in place creates advantages or disadvantages for pioneer innovators in medical technology.” Using data spanning three decades, Stern found that regulatory approval for first-in-class medical devices is more than seven times longer than for those that come after.

“I find that, in contrast to the early entrant advantages observed in drug regulation, first entrants in medical device markets experience a strong disadvantage in the regulatory approval process,” Stern wrote in the paper titled Innovation under Regulatory Uncertainty: Evidence from Medical Technology.

Fostering innovation has been one of the strategic priorities of the FDA’s Center for Devices and Radiological Health (CDRH) since 2010, and it has implemented a number of initiatives aimed at speeding up approval times. Between 2013 and 2015, CDRH more than halved the average time to a premarket approval application decision, cutting it from 432 days to 209, according to reports from the agency.

At first, Stern thought regulatory delays were due to device evaluators needing to learn about and understand the scientific mechanisms behind a new technology. However, based on her findings, “approval times are largely unrelated to technological novelty, but are meaningfully reduced by the publication of objective regulatory standards.” Stern calculated that, on average, approval times following the release of guidance detailing application content and evaluation procedures decreased by about six months.

However, developing regulatory guidance that covers all marketed devices, as well as those in development, just isn’t feasible. The FDA has finite resources and a portfolio of 1,700 generic device types.

That’s where standards come in, said Carol Herman, senior vice president of standards policy and programs at AAMI. “The drafting of guidance documents can be so very challenging and time consuming, so FDA/CDRH relies on standards to fill the gap,” she explained.

The FDA recognizes roughly 1,200 device-related standards. Manufacturers can use conformity to these specifications as evidence of quality and safety in a premarket application. “Ideally, standards and guidance documents are meant to be complementary,” Herman said. “But FDA/CDRH has always seen standards as a way to promote innovation in the absence of guidance.”