Focus on value, mitigate risk

Originally posted on Medical Design & Outsourcing

“I need a prototype.” This is often the kick-off to my conversation with a prospective client. Usually the idea is voiced by a clinical innovator, the CEO of a medical device startup, or perhaps an academic researcher who’s come upon a new technology or technique they’re eager to apply.

This focus on prototyping is understandable—inventors have an idea, often one they’ve been mulling over for years, and they’re eager to get it out of a sketchbook and have something tangible to prove that their technology really works. But, while prototyping is a critical element of the product development process, it isn’t the same thing as the process itself. Instead, a prototype should be viewed as a byproduct, a sign and a test of the hard work that’s gone into charting and maintaining a course in the right direction.

It’s our goal at Smithwise to help innovators over the hurdles that stand between them and turning breakthrough healthcare technologies into real medical products. So here’s the advice we offer to those near the beginning of that journey, or to anyone who feels they’ve strayed from the straightest path to market.

Instead of fixating on building a slick prototype, medtech innovators should focus on proving the value their device will bring to the market and mitigating the risks that could stall or stop their progress.

Proving Value to the Market

Focus on value means aiming for a real impact on the way healthcare is delivered. It’s not enough to have a new way of solving a problem that’s already been solved, even if it’s a little bit better than the status quo. Demonstrable value can mean a significant change in patient outcomes and quality of life. It can also mean showing hospitals and payers a big enough cost savings over the current way of doing things to justify the pain of change.

Will your device speed recovery times, reduce hospital readmissions or time in ICU, or eliminate the need for opiate prescriptions? You’ll need to make a compelling case that your product addresses a known problem in healthcare. That’s a challenging task. To accomplish it, you need data—a lot of it.

Data-generation is accomplished through clinical trials. Value to investors and potential payers increases exponentially after a demonstration of clinical efficacy. Until you have data to show your product can deliver outcomes that move the needle on a critical metric, your product is one idea in a sea of others just like it.

So think about the value you need to prove in order to reach your next milestone. That might be assembling a grant application or putting together a compelling, data-driven investor pitch. It will probably include prototypes, but these will likely be early-stage “Frankensteins” that don’t look much like a market-ready product.

Mitigating Risks to Commercialization

We often think of risks when it comes to medical technology very narrowly, as in “what is the risk to patient safety if this device fails?” Certainly, that’s one set of risks, one that has to be carefully monitored and managed throughout the development process. But there are all sorts of other risks that can keep your product from reaching the market.

You’ll need to do your research and construct a strategy for identifying and addressing each of these questions. If a potential investor asks you about market size, regulatory pathway, reimbursement codes, or prior art, you need to have a good answer that instills confidence. They won’t care if you have a great-looking prototype but no strategy to address an existing patent blocking your way.

Charting the Path to Market

Most medtech innovators are very aware that their resources to reach a state of revenue generation are limited. But many of them are spending those resources on the wrong things, or on the right things at the wrong time.

Medical product development is about charting your path forward in a way that spends resources efficiently to achieve key milestones along the way. Remember: prove value, mitigate risk. There are a lot of slick prototypes packed away in closets of bright innovators who never made it to market.

 Written by Eric Sugalski

Written by Eric Sugalski

Eric Sugalski is the founder and president of Archimedic, a contract medical device development firm with offices in Boston and Philadelphia. Sugalski has led the development of a novel pediatric life support system, cardiovascular implants, laparoscopic surgical devices, and an array of wearable diagnostics. In addition to his technical background, Eric provides companies with product development strategy that encompasses regulatory, reimbursement, and fundraising requirements. Eric obtained a B.S. in mechanical engineering from the University of Colorado Boulder and an MBA from the MIT Sloan School of Management.

MedTech Mindset Podcast: Clinical Evidence Insights with Joe Popowicz

EPISODE 3 – Joe Popowicz and Emergent Clinical Consulting

In this episode, clinical study expert Joe Popowicz, founder of Emergent Clinical Consulting, sits down with Smithwise President Eric Sugalski to talk about clinical evidence strategies surrounding new medtech. 

They cover pre/postmarket data needs, regulatory pathways, Value Analysis Committees, Significant Risk vs. Nonsignificant Risk, Institutional Review Boards, and more. 

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Episode Transcript

Eric Sugalski: Hi Joe. Thanks for joining us this morning. Glad you could be part of this.

Joe Popowicz: Absolutely. Thanks for having me.

Eric:     Yeah. Joe, to kick things off, why don’t you tell us a little bit about Emergent Clinical. When did you start the company? What was the need in the market that drove you to start this business?

Joe:     Sure. Emergent Clinical’s been in business now for coming on six years. The whole focus was to optimize the clinical trial process for diagnostic and device companies. So we started this as a small company to act as an extension to these teams, really helping them guide the clinical pathway.

I was doing a lot of speaking at conferences back in 2013, and I realized there was a need for us to start providing some clinical advice to companies because it was one of those areas where they’d spend a lot of time on regulatory feedback or product development, but clinical wasn’t always an area that they were having internal capabilities. Because they would need some trial work or some advice, and then it would go away.

So I gave it a shot in 2013 to start helping clients and six years later we’ve been steadily moving our way through this process.

Eric:     Good for you. Are you working primarily with startup companies or academic centers? What’s the typical profile?

Joe:     Most device and diagnostic companies in the space are small to midsize of less than 50 employees. And that represents about 75% of our business. About a quarter of the business is the larger medical device companies as well that might need some process development work or [inaudible 00:01:30] help so we help them to go through that as well.

Eric:     Okay, great. A lot of our listeners are trying to bring a new medical technology to the market. It might be spinning out of a lab or it might be a spinoff of a larger established company, but there is something new and novel that they’re looking to develop, and the clinical factors are important for them to be thinking about at the beginning stage.

I thought the way that we could structure this conversation is by setting up two examples of different medical devices sort of generically that we could walk through from a clinical study standpoint.

And the first one that I wanted to talk about was a new surgical device. So let’s say that I am with a startup company, and I’m developing a new laparoscopic surgical device that has some improvements over the existing devices in the market. And I’ve gotten some feedback from regulatory consultants that this is a pretty clear 510(K). So in my head, I’m thinking that this product, 510(K), I don’t need any clinical studies, right? It’s just a straight approval process. What’s your take there?

Joe:     It definitely depends. It’s great you’ve mentioned about having good regulatory advice because I think that’s one of the keys for any startup company is to understand what your regulatory pathway is and what’s going to happen moving forward. That said, the market definitely has shifted over the past few years in that you’ll have value analysis committees who wanna look at products that come into ORs, and they wanna know what the clinical benefit is, so in a lot of cases you may have a clear regulatory pathway that says, “No clinical evidence is required,” but that doesn’t necessarily mean that you wouldn’t wanna collect some clinical evidence to differentiate your product from someone else’s.

So in a lot of cases, we look at it from could you develop a postmarket strategy at that early phase to say we’re going to collect some evidence against another product once there’s clearance to then say, “We are better in a certain area or we have an economic benefit,” so we really wanna work with companies to ensure that we have a clear value proposition for them as they get to commercialization.

There are also some though the regulatory guidance may come through and say, “You will need some clinical evidence.” There are 510(K)s with clinical where depending on that product classification, you would have to collect some evidence premarket to then show that this product should be cleared for use.

Eric:     So just to clarify for me. When we’re talking about the regulatory approval process, that 510(K) approval, everything before that, the premarket clinical studies, you’re saying that during those premarket studies there may be cases for a 510(K) when you do need to collect some clinical data before getting that approval.

Joe:     Yes, absolutely.

Eric:     Correct. Okay. But then when you get through that approval, there is very likely the scenario where you would need to be doing some comparative studies to look at how this new surgical device performs with respect to the other, the gold standard or the commonly used surgical devices that are for a similar indication.

Joe:     Exactly. And it may not be for claims purposes, but it may be for publication purposes that you could go to a value analysis committee and say, “Look, here is a level X, 1, 2, 3, trial that has been published,” to say this is a difference for how the modality of care worked for this particular product. There is a benefit in what you would use for commercialization standpoint to collect some evidence for that product.

Eric:     Got it. So the comparative studies are often for business factors. You wanna be showing that there’s a clinical benefit obviously but there’s also hospital economic factors that come into play and other things that are gonna matter to the value analysis committees. Is that-

Joe:     Absolutely. And we work with marketing groups even in the postmarket to say, “What do you want this to be working with the end in mind, working backwards,” to say, let’s develop a trial design that gets you what you need in postmarket so that we can help them get that strategic vision.

Eric:     Right. We talked about value analysis committees. This process of getting a new medical device into the hospital has become fairly complex. Can you help me understand what exactly is a value analysis committee?

Joe:     Each hospital or as this has gone through, more hospitals are relying on an economic assessment of device or diagnostics or products and saying we have limited shelf space, why should we use this product as opposed to the other 15 products that are available in the market? So to that end, they’ve more formalized this where they have scientists, people with a finance background to look at the products and really get a good assessment of does it make sense to bring in this product versus another product, what are the benefits or risks associated with it, and they have a formal assessment. We’ve seen that with some of our clients go through the process of having to get product on market saying if I have this hernia mesh, let’s say, as opposed to other meshes, why would I use this one versus another one when there are 15 options? And that’s where collecting some evidence may differentiate you from some other companies that haven’t collected any evidence for their products.

Eric:     Got it. And so back to this example of I’ve got a surgical device, it’s gotten, let’s say it’s now gotten 510(K) approval, do I just look for the value analysis committee email on the hospital’s website and email them? How do I get into the value analysis committee?

Joe:     In that case, most of the sales reps have some inroads to the hospital administration so they’re working with their doctors and then they find their inroads. We haven’t had a lot of direct experience with going to the hospital administration. We’re more on the supporting side of collecting the evidence and helping them through that. But commercial groups typically have some inroads to that.

Eric:     Got it. So it sounds like the commercial groups, the salespeople, they speak with the clinicians and then the clinicians, one or several, may be a champion for a new product to bring it into the value analysis committee in order to get it evaluated.

Joe:     Yes, absolutely.

Eric:     Okay, great. Let’s go back to this postmarket concept. We have a new surgical device, it’s going up against an existing surgical device. How would you think about the endpoints? What are the endpoints that we would be looking at in that clinical study?

Joe:     So this is where we work with the team as an extension to understand what are the benefits of the product. Why when you started to conceptualize this product did you think this would be better than other ones? And that’s really what formulates our idea of what should be a primary, secondary endpoint, however it works. Because in most cases, the engineers, the medical teams, they really understood … They had a good understanding of why this product was gonna be better than or why we should really commercialize this product. Our job is to kind of translate that portion of what did you envision to what will accentuate that benefit from a clinical standpoint. So primary and secondary endpoints typically revolve around maybe you have less surgical time because it’s easier to use. Maybe there should be better outcomes associated with healing or a quicker implementation. There’s really a number of different ways and it’s really dependent on the product. But we wanna work with the team to understand why did you conceptualize this as a better product, and let’s translate that into an endpoint story within the protocol.

Eric:     Got it. I’m still a little nebulous or confused on primary versus secondary endpoints. Back to this surgical device example, give me an example of what you think a primary endpoint would be for this.

Joe:     A primary endpoint for that may be the efficacy of the product. Think of it as primary endpoints are usually built to say we wanna have a claim, and that usually is more in the premarket side than the postmarket side, but each will have an endpoint.

Eric:     Well, let’s say that it’s a surgical closure device. It’s used for closing tissue after say an organ has been removed from a particular area. What would be a primary endpoint in that case?

Joe:     Speed to closure, ease of use. You could see that a surgeon’s application, they may have an assessment of it to say how easy was it to use this product. You can have very strict guidances like quality of life assessments but to more qualitative responses to how easy was it easy for me to close as opposed to what I’ve experienced in the past.

Eric:     Got it. So the primary endpoints are directly related to the output of the surgery. You mentioned some of the human factors issues. Does the device result in intuitive use? But then also does it result in a very robust closure or seal if that’s what the device is looking to do. Is that an accurate depiction of what common primary endpoints might be?

Joe:     It can. And it can shift. An endpoint is an outcome for the trial, whether it’s a primary or a secondary endpoint. It’s really a decision by the company of is this trial’s focus X. And that’s where your primary endpoints would be where you would still look at secondary or tertiary endpoints to say these are other things that are of interest that we would wanna publish on or we would wanna present from a regulatory standpoint. We’re also gonna look at this as well.

In the premarket and especially depending on if you need this data associated with a project, there’s very clear guidance by products of what you need to show because other devices have done that in the past. In more new devices, let’s say De Novo, it may not be as clear and you’d have to have some discussions with FDA potentially to determine what your endpoints may look like.

Eric:     Got it. Got it. So premarket endpoints are really a negotiation with the regulatory agency, whereas postmarket, those endpoints are determined by the company to figure out what is going to be really important for the clinicians that are using the product and the hospitals that are ultimately going to be evaluating the product with respect to other devices that are on the market.

Joe:     Yes.

Eric:     Okay. That’s helpful. Let’s talk about the size of a trial. Let’s stay with the postmarket theme. We have a new surgical device, it’s going up against something that’s competitive. We believe that this new surgical device can result in a more robust closure process. What does a study look like for that in terms of proving at a postmarket level that we can produce more reliable closures and say reduce infections related to those closures?

Joe:     You hit a nice topic about infections or reduction. Everything is driven based on a success criteria. You’d say our expectation is that this percentage will be successful. In a case of trying to reduce infections, there typically small percentage numbers, single digits, so to show statistically significance in that case you’re gonna use thousands and thousands of patients to be able to say we reduced infection rate by 50% from two percent to one percent.

Eric:     Because the infection rate is already so low. If you had a really low incidence rate, that’s gonna obviously result in a pretty massive clinical?

Joe:     Yeah. And this is where it’s really good to have a great statistician that can work with you on a power analysis because things like that you can see how it’ll inflate and adding other criteria might change your success rates. But the important part is to understand what the end game is, so what your endpoint is and the success rate of that to be able to build a good power analysis.

Eric:     Got it. This is I think a really important point because when you’re picking your endpoint, you need to also look at what the incidence rate is that you’re trying to affect. Because if you’re looking at a multi-thousand patient study, that could be beyond what is reasonable from an investment perspective, right?

Joe:     Absolutely.

Eric:     It sounds like when you’re looking at your clinical study design, you really need to be trying to identify some endpoints that you can really influence at a significant scale with a relatively small patient population.

Joe:     That’s absolutely right. But the one interesting part of it in the post market, you may not be building a study to show statistical significance. You may be showing it to show trending. So in a case like that, you may have hundreds of patients to be able to show we’re trending towards that, but we would never be able to run the trial to that magnitude. So we collected evidence to see where did the data trends, not necessary [crosstalk 00:14:25].

Eric:     So when you say trending, what does that mean? Like you haven’t hit statistical significance but you’re sort of going in that direction?

Joe:     Exactly.

Eric:     Okay.

Joe:     So data trends towards a certain end point, that it’s in a positive way or negative way, depending on how the end point is created. But it won’t show for a P value or .05. Or it’s trended towards that but we would have to power the study to a larger degree.

Eric:     Got it. Great. Okay. That’s really helpful. Let’s say that we brought the statistician into the process, and she has informed us that the trial should be 200 patients in order to really show significant statistical significance of the study. How do we understand, as an early-stage company, what the magnitude of that cost is going to be from a clinical study at some point?

Joe:     Yeah. There’s a number of different ways to look at that. And you can look at just the budget because there’s a budget of cost per patient, which is important. That definitely varies depending on the surgical application or the therapeutic application of the trial, certain cost per patients may be as low as $1,500 a patient. There’s other applications where surgery and long-term follow up, you could be in the 20 to 30 thousand dollar cost per patient. So it really is dependent on your therapeutic application there. But you can also look at it as how do we play with the levels of number of investigators in the trial and we make it more efficient. So we typically work with clients to say, “Let’s do an enrollment projection to see how many sites, doctors’ offices you would need to participate in the trial to then get a study done in a certain time frame, to understand the costs of how long a trial would take, how much would it be per patient,” things like that so that they have a very clear understanding and can communicate that to investors, management, boards. So they have a really good control of what that clinical cost would really be.

Eric:     Got it. Got it. Okay. So is it fair to say that clinical study that is sponsored by a device company needs to finance the surgical procedure as well as a series of follow-up visits with the patient, typically?

Joe:     So things that are outside of standard of care are definitely part of the trial. So if you have a vote on what would be standard practice … So let’s say I’m adding another product into a surgical procedure, we want to try to stay as close to standard care because the doctors are going to be comfortable with that. We want to ensure that they are comfortable so that there aren’t protocol deviations, things of that nature. But costs for the device or diagnostic company are really the things, in addition to what standards of care are. So, typically, our team will work with that group to help them build a site budget. So what will be the costs for the implementation for that patient and really add that into it. So it may be things like data entry because they wouldn’t typically enter that data into a database. They would enter it into their electronic health system and that would be the extent of it. Or follow up because it’s maybe different than what standard practice is. Anything like that would be a cost to the device of diagnostic company. And you would have to incur that for a trial.

Eric:     Okay. Okay. That’s helpful to clarify. So it’s not if you’re running a clinical study, you’re paying for the entire clinical procedure, the entire surgery. It’s really just the incremental costs based on the device that you are now introducing into this existing process.

Joe:     Absolutely. That’s the ideal situation.

Eric:     Okay. Great, great. Let’s talk a little bit about US versus outside US Clinicals. Why would a company want to consider going outside of the US for a clinical study?

Joe:     Historically, speed to market has been one of the areas that device or diagnostic companies have really focused on why they’d go outside of the US for the regulatory pathway.

Eric:     So in that case, the regulatory agencies that are not FDA might have a lower bar, allowing you to perform a clinical procedure earlier. Is that accurate?

Joe:     That’s been the perception. I have to say in the recent past, our interactions with FDA, they’re interested in making sure innovations come to market first in the US. So the pathways, they’ve been quicker to review. They’ve been more collaborative in the process. So that perception should definitely be tested with the FDA. I think if you have good regulatory guidance, they would head you down that direction to say, “Have the discussion early with FDA. Explain the clinical utility of this product, and see if it makes sense to be here domestically,” because I think FDA’s interested in ensuring more innovation comes to market first in US. So they’ve really worked with industry to ensure that happens.

Eric:     Got it. Got it. Okay. What about the costs? So we talked about the timing, but is there a significant cost savings to going to South America for a clinical study versus the US?

Joe:     The perception has definitely been there as well, the per patient cost. I think if you look at it in just direct costs, you can make the argument that maybe the cost of the patient in South America might be less than of the cost per patient in the US. But I don’t think we’re looking at it holistically because there’s service costs. There’s transport costs.

Eric:     Travel. Right.

Joe:     There’s a lot that goes into play. A lot of the companies, especially that we see, the device and diagnostic companies, they’re hands on. They want to be there for surgical procedures if that’s their type of product. So they’re there all the time. They are ensuring that the product is going well. In that case, there’s a cost associated with that and having to find a vendor in South American that could execute the trial. It’s cost associated. So you have to look at it holistically and then weigh does it make sense. I would argue it’s becoming more competitive to be in the US, as a whole, just to ensure that the product comes through. But you have to weigh it out an see what makes sense for your device or [crosstalk 00:20:36].

Eric:     Great. Okay. Excellent. So let’s switch gears now. We talked about this surgical device that was a 510(k). I think everything there is pretty clear to me. Let’s change over to a different application. Say we have a new diagnostic system. It is a non-invasive diagnostic. It’s reading certain health data through the skin. And there’s no inherent risk with using the device. There may be some risk with the data that the device is generating, but this is a diagnostic device that is likely, based on regulatory expertise we’ve received, going to be a De Novo pathway. And we’ve been talking with some investors about this device, and there’s a lot of excitement around it, but there’s also a bit of skepticism around the sort of clinical merit, clinical validation. Is this really going to be useful in providing clinicians the data that they need? So in that case, how do you get a study going as early as possible so that you can prove that you’ve achieved this clinical milestone, you can get the data that you really need?

Joe:     So I’d start with, as we talked about, getting involved early and often. It’s the same situation from the regulatory side because there may be the determination of significant risk versus nonsignificant risk. I’d have the conversation, from a regulatory standpoint, to get an understanding of what is this pathway. So whether it’s you go the formal regulatory pathway and get a designation through FDA, as an example.

Eric:     So time out for one quick second. Significant versus nonsignificant risk. Are these just interpretations? Are these defined terms? Help me understand a little bit more. What does that mean when a device is classified as significant risk versus nonsignificant.

Joe:     So FDA has a guidance document. I definitely recommend, if you’re in that device or diagnostic that could fall into significant risk versus nonsignificant risk, start there. But it’s a question of whether there would be some detrimental impact in the long haul from a safety standpoint if something failed for the device. So even if it was maybe not a safety risk from an implant standpoint, but in this case, a diagnostic, if there was a failure for the data to be accurately analyzed, it may be that there is a detriment to the patient because we didn’t see some health issue that would have come up earlier than how we’d normally treat or diagnose that case. So there is a pathway that has to be assessed to say there might not be inherent safety risk immediately, but data interpretation may be an issue in the future.

Eric:     Great. This is helpful. So let’s say this diagnostic device, it has a number of different sensors on it, but all of these different sensors independently exist. And the clinical can be such that you’re using the diagnostic device in a hospital environment, but it’s redundant with other data that is being collected with this other instrumentation that already exists. So does that mean that the device is going to be significant risk or nonsignificant risk?

Joe:     So you have to go down the pathway to ensure, and that’s where, from a regulatory standpoint, I may not be the best person to go through. However, that seems like the study design that I would implement, saying “We have some data that’s collected in this novel way. And we have redundancies in place to make sure that these data match what our standard of care.” So you’ve just basically developed what the design of the trial may look like to ensure the safety in the future from a commercial standpoint.

Eric:     Got it. Got it. Okay. So in that case where you have some redundant devices that are being used, the data that’s coming off this novel diagnostic device, the data may not be as likely to be interpreted or relied upon by a physician because there’s other sources of data that are being captured simultaneously.

Joe:     Correct.

Eric:     So that is likely to push it into the nonsignificant risk category versus significant risk, with the caveat that there’s guidance and regulatory process that needs to be followed here.

Joe:     Absolutely.

Eric:     Okay. Great. So what about significant risk? Let’s say that we need to show that this device is going to identify a novel set of health data that does not exist and clinicians are going to be relying on this data. What does that path look like for getting approval to use this device clinically?

Joe:     Yeah. Most devices will fall into a significant risk device, so it sounds scarier than it is. It’s more that there is a potential risk associated with patient, so we need to ensure that it is safe and effective. So this is, essentially, an IDE or an investigational device exemption. So that is something that prior to a clearance or approval, depending on the classification of the device, you have assurance from FDA that you can use this device in the premarket to collect the evidence, to prove it’s safe and effective for a ultimate commercialization when you send in your application. So that’s where a significant risk device, you would be running the trial under an IDE, and then, ultimately, collecting data to get a regulatory approval or appointments.

Eric:     Got it. Okay. So if I’m this startup that is building this new diagnostic device and I know that this is going to be a significant risk trial, do I just go straight to FDA, or what does that process look like for getting that significant risk status and the IDE application rolling?

Joe:     So, typically, you’re in that pre-submission process at that point with FDA. And you’ll have to have a sense of what the trial would look like and things like that, so they can weigh in on, “Does this application fit?” so that you can be granted the IDE.

As you’re going through the process of developing the trial, that’s where you would get some sense of, “We have a trial design. Here’s what our pre-clinical package looks like. Here’s what we’ve done in the past. And here’s how we execute.”

Eric:     So IDE. I want to dive into this a little bit more. So Investigational Device Exemption. Is this for significant risk devices only, or is this also for nonsignificant risk devices that label?

Joe:     An investigational device exemption is basically saying, “Because this is not commercially available, we’re allowing you to transport this device to different locations because it shouldn’t be used in commercial or clinical applications.” So it’s basically FDA’s blessing to move forward.

Eric:     Okay. I want to make sure I’m clear here. So we’ve got this diagnostic device and we want to do a clinical study. I say that it is nonsignificant risk. That’s what I believe. That’s what maybe some of the regulatory guidance that we’ve received believes. So we go to an institutional review board, an IRB, and that’s at a hospital, an academic hospital that has an IRB. What happens there? What are the scenarios for the IRBs? Do they basically just pass through the study or, tell me about their decision process.

Joe:     So at that point, you’d ask an IRB to designate if they believe that it is a nonsignificant risk. So if you believe that you have a nonsignificant risk device, you would go to the institutional review board and say, “We believe that there is a pathway for this to be reviewed through your governing body. Please let us know if you agree that there is no risk associated with the patient, that you can allow this trial to go on without a formal designation from a regulatory panel.” So at that point, the IRB will review what the protocol is and the consent documents, things that would be the trial-related materials so that designate, yes, you can move forward with this trial or no, this is significant risk. You need to do this under an IDE. So go back to your regulatory authority and get granted that to move forward with the project.

Eric:     Okay. That’s helpful. So what about the level of information that is needed for each of those pathway? And this may be more of a regulatory question, but there’s … If you’re going the IDE route with the significant risk status, my understanding is that you need to do a much deeper level of testing, verification work, documentation, versus the amount of testing that you would need to do for a nonsignificant risk device. Is that true? Can you talk about the pros and cons of each of those scenarios?

Joe:     In our experience, whether it’s the nonsignificant risk or the significant risk device, both are going to require a fairly large set of data. So in either case, you’re still using it on a patient. There’s still some application associated with it. So you’d have to ensure that there is no safety issue that it does work to some degree, whether it’s NSR or significant risk. So that and it’s more about the product class and what level of evidence you would collect, whether it’s preclinically or clinically to determine this is a useful product to be available on the market.

Eric:     Okay. Okay, great. Now, one of the key pieces of information that needs to be provided to either the IRB or the regulatory authority is the clinical protocol, right?

Joe:     Yes.

Eric:     Who’s writing that clinical protocol? Is that me? One of the engineers on the team or do we need to get Emergent Clinical to help with the clinical protocol? Who exactly is responsible for that?

Joe:     So we typically help clients write the protocol. The way we envision it is it’s a two-fold process. There’s a medical application to it, as well as the operational aspect. So we typically work interchangeably with the device company because they have a great understanding of the medical application, but we understand the clinical ops portion, so together we’ll help build the framework, all the required elements for it, the things that will help them get to the finish line sooner without multiple iterations with the institutional review board or the regulatory authority, things that would be expected to be seen in that process, but we rely heavily, because it has to be a collaborative effort.

Eric:     Got it. So in a realistic scenario though, when should that clinical protocol start? Does drafting that clinical protocol begin after the design is complete? Should it happen before the design is complete? What’s the timeline look like there?

Joe:     We’ve worked with clients very early on to build synopses. So a very simple outline of what the inclusion, exclusion criteria would be for patient selection. So the things that you would want someone to have or not to have in the trial, the endpoints that we discussed before, a simple power analysis, things like that that give a sense that you have an understanding of what the trial will look like. That happens very early in some cases and that’s important whether it’s you’re raising capital, you’re having conversations from a regulatory standpoint, you’re looking for strategic partners, it really conveys that you have an understanding of what the pathway looks like and what you’re going to do to execute a trial. The more formal protocol should be closer to execution because things will change, you’ll learn more things as you go through, you don’t need the 70-page, full protocol early on. But to have a handle on the synopsis as early as you can I think is valuable to companies.

Eric:     Got it. Okay. That’s great. So I’ve heard of some companies taking the route of an IRB within an academic institution and then other companies taking more of the for-profit IRB pathway, like a Western IRB or one of those for-profit IRBs. Talk a little bit about the differences, the trade-offs associated with both of those pathways.

Joe:     Sure. Institutions select what IRB they will have review their products, or projects, excuse me. So in a case of a large academic institution, historically they have their own institutional review boards and the institutional review boards processes to ensure that this is an ethically sound protocol, the patient’s rights and safety are maintained in the project through informed consent process, there’s no issues with the design of the trial scientifically, so it’s important that they’re really the patient’s advocate in ensuring that this project is worthwhile and ethically sound. So larger institutions historically utilize their own boards. Lately, they’ve been more inclined to work with commercial institutional review boards like Western IRB and their multitude out there. The pros and cons typically, an institutional review board that has a commercial application tends to be faster to review and give some process associated with it. So you’ll have a Western IRB that will provide a review cycle within a week in some cases and give you a decision where, historically, some of the larger academic institutional review boards have taken months. They don’t meet as often, they are trying. So I think things are changing. You have to assess on a case by case basis, what the institution you’re working with, what their IRB looks like from a review cycle, how quickly they turn it around, things like that, because it will play into the ultimate timeline of the application.

Eric:     Got it. So a commercial or a for-profit IRB, do they have specific clinical sites that they use? Or is that up to the sponsor of the trial to determine where the sites are?

Joe:     So the sponsor decides which institutions they’re going to use for the trial and then the institutions decide which IRB that they would do or contract, things like that. So it’s one of the things we assess as part of our feasibility assessment in who should you work with to execute a trial. It’s one of a number of things of how do they review budgets, contracts. There’s a whole startup criteria that you have to understand so that you select the right institutions to ultimately execute a project.

Eric:     Okay. But say we went to a Western IRB or a group like that, and is there … If there’s an existing IRB at one of the sites that we would like to use, is there going to be any conflict between the in-house IRB at a large academic institution that is receiving the IRB approval from a group like a for-profit IRB?

Joe:     So the for-profit would review the study as a whole, let’s say, and then anybody who subscribes to Western would then allow them to be listed under that approval.

Eric:     Got it.

Joe:     Separately, the local IRBs can run other institutions. Let’s say you have five institutions, three can be under Western, two can have their own institutional review boards do the review. So it’s a bit of both you can have, and it’s dependent on them to decide, do they allow for the Western approval to apply for their institution or do they require that their own local institutional review board is the one that governs the protocol review?

Eric:     Okay, okay. So could be a combination. But what I heard is that sometimes, if you’re using a commercial or for-profit IRB, it can be a faster process than going through a large academic IRB?

Joe:     Absolutely.

Eric:     If you’re looking to get a trial going very quickly. Are there any downsides to using a for-profit IRB? Is the data not respected as highly or are there other factors that might be considerations?

Joe:     No, I think they just formalize their processes differently than other local institutional review boards. So because it’s a commercial entity, they’ve learned how to … A customer service group and routing, scheduling technology, so it’s more about efficiency as opposed to the quality. The quality is good whether it’s the centralized Western IRB or a commercial IRB versus the local IRBs, I think that it’s essentially the same quality you’ll get, it’s just a question of speed.

Eric:     Got it. Okay, great. So we’ve hit on a lot of topics here. We’ve gone down the 510(k) path with a surgical device. We’ve talked about endpoints, primary, secondary, quantified the size of trials, and then we looked at the diagnostic application, more of the De Novo, the premarket process of getting early clinical data. We talked about significant versus nonsignificant risk. This has been great. I’ve learned a lot here. I have one last question for you. Advice that you have for early stage companies or companies that have new technologies. What advice do you have on how they can get into their clinical study design most efficiently?

Joe:     So we always recommend come early and come often. So the earlier the better. It’s great to have conversations with early stage companies, maybe that haven’t gotten their round of financing secured at this point, but they have a great idea. We’ve started conversations four or five yeas ago with companies that are still not to the clinical phase because they are still working with a group like yours to help them with product development and ensuring they have the right application. But there is still value in us having the conversation, because they may get utility out of understanding what the clinical pathway would look like. And I think that goes for most in our industry. I think you have to build a really strong team around you, whether it’s product development, regulatory, clinical, to ensure that you have that right structure moving forward, even if it’s early, because then you have an understanding of what you need to do, what that pathway looks like, and it will be easier for you to communicate to investors, strategic partners, things like that, as you develop the project. So come early, happy to have the conversation. We love to see technology. We got into this space to ensure that we saw all this cool medical technology come to market. So we love the early stage conversations.

Eric:     Yeah, this is great. So it’s a reminder for me, being an engineer and often looking at problems through the lens of an engineering sort of technical side, that when you’re bringing a new medical device to the market, it’s not all about just “Does the design work? Can we engineer this product really, really well” but there’s all these other factors, and I think what you’re representing here today, the clinical side is so important to be thinking about really early on in the process. Looking at those endpoints, where exactly are we going, what are we trying to achieve? There’s a number of other factors that we’re going to get into during other sessions, but this has been really very helpful. We really appreciate you taking the time to chat with us. One last thing, if companies want to find out more about your company or reach out to you directly, how would they go about doing that?

Joe:     Come to our website, emergientclinical.com. There’s an information section there, you can reach us, there’s all our contact information. I can put my email address in the show notes. We’d be happy to reach out and hear from anybody out there, questions about clinical and just in general. Again, I love to hear about the medical technology that’s coming through, so feel free to reach out and we’ll start a discussion.

Eric:     Okay. Thanks again, Joe. Really appreciate it.

Joe:     Thank you.

Written by Daniel Henrich

Written by Daniel Henrich

Director of Marketing at Archimedic

Podcast Launch: A Medtech Mindset with Eric Sugalski

Launch Episode

This episode is a great way to tell if this podcast is for you.

Eric Sugalski and Dan Henrich sit down to discuss the big picture of bringing a new piece of medical technology to market. We touch on product development and design, regulatory pathways, clinical evidence, go-to-market strategy, intellectual property, and other important topics.

In coming episodes, we’ll explore these topics in more detail with guests who are experts in these areas and guests who have recently been through the process. 

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Episode Transcript

Dan Henrich: Hello and welcome to the very first episode of Medtech Mindset. I’m Dan Henrich your host, and I’m director of marketing at Smithwise, a medical device product development firm.

I’m gonna use this first session to kick things off, and let you know what to expect from this show. We’re gonna be talking with guests who are experts in different areas of medtech. Including product design, clinical trials, regulatory, market strategy, funding, things like that. We’ll also bring guests onto the show who have had recent experiences commercializing new medical technologies. Some of these might be Smithwise clients. And others are just gonna be friends and colleagues we’ve met working in the industry. We wanna hear about their ups and downs, and try to draw out some lessons from their practical experiences for you our listeners.

For this first installment, I sat down with the president of Smithwise, Eric Sugalski, and we talked about the big picture of bringing a new piece of medical technology to market. Our conversation touched on a lot of themes that we’re gonna develop more fully throughout the show. So I think it’s a great introduction to help you decide whether or not this podcast is for you.

Now, just so you know a little bit more about him, and why I think he’s worth listening to. Eric is an entrepreneur and a mechanical engineer by training. He’s got extensive experience working in the medtech arena. He’s held engineering and leadership roles with IBO and Insight product development. And he’s even lectured in the mechanical engineering program at Massachusets Institute of Technology. He holds a bachelor’s degree in mechanical engineering from University of Colorado Boulder, and an MBA from MIT. Eric founded Smithwise in 2009, and he continues to lead our Boston and Philly teams. So let’s get started on Medtech Mindset by jumping into my conversation with Eric.

Eric Sugalski: Hey, what’s up Dan?

Dan: Hey Eric, how are you today?

Eric: Good, good. So, what are we doing here?

Dan: This is our very first episode of Medtech Mindset. So this is our chance to kick off and grab everybody’s attention. Explain to them why we are launching this podcast.

Eric:    Okay, okay. Sounds interesting.

Dan:    So I thought you’d be a good first guest. Because we are often approached by a prospective client or a new project, and the first words out of their mouths are usually, “I have this idea, but I need a prototype.”

Eric:    Yep, all the time.

Dan:    And so I thought it would be good to begin with that idea, because it’s probably the idea in the mind of some of our listeners. And we wanted to talk about the different phases of things that they need to think through before they get to the stage where they need to build a prototype.

Eric:    Got it, got it. So, you’re right. We hear 95% of the time, when companies come to us, usually at the early stage. They have in idea, the see an opportunity to make a difference with a new medical technology, and right off the bat they jump towards, “How do we build this prototype to really demonstrate the idea.”

Dan:    Right, so I thought it would be good to use this first chat as a chance to take a step back, and talk about the things … Where do prototypes come into play, but more importantly, the process of bringing a new piece of medtech to market. What are the steps that you rally go through? And I think it would be good to take a step back and talk about defining the bigger picture of the need. Where does your idea fit in, and what’s the real value that you see if everything goes right throughout the building process.

Eric:    Yeah, yeah. I think that that’s a part that a lot of times gets glossed over. There’s an awareness to a particular medical need initially, and that leads to a quick idea session. And then people become fairly focused on that idea. And that makes sense because that’s where the commercial opportunity is, that’s where the creative process starts to kick in. But, in our point of view, we think that there’s a lot of benefit in going back to the need, to really make sure that the solutions that we’re building off of are really founded in … They’re grounded in a very strong need.

And we follow a process that is advocated and spelled out pretty well in the BioDesign book that coursework at Stanford. And really coming up with the need, it comes to three components, there’s three parts to it. The first is really looking at who specifically is the patient population that you are targeting, right? So, in many cases a common mistake for startup companies is that they try to address too large of a patient population. They try to say, “This product is going to be for everyone.” But realistically in medical device development, it is much more effective to be laser focused on a very specific patient population first. And then if you’re successful there, then you can expand into other markets. So we think that that is the first part. Who exactly is your user? Who is the patient?

From there, it’s looking at what is the problem? What’s really going on with the patient that deserves an additional solution? And how is this problem being addressed by other solutions? Whether those are products, whether those are services, whether it’s a workaround that a patient is implementing themselves. There are often a variety of ways of solving a problem. And so, developing a landscape or understanding what all of those problems are, or what are those ways of addressing a problem, that’s an important part of the process.

Dan:    Yeah, so it’s not really just, “Has this technology been commercialized before?” Right? It’s, “How is this problem currently being solved? And is it a problem that’s appreciated by the market already?”

Eric:    Right, right. Yeah, absolutely, absolutely. And then the third piece is, what’s happening right now, what is the outcome of this problem? Right? So how are you going to quantify this outcome in such a way that allows you to determine if your solution is really addressing that problem that you spelled out, with the specific patient population?

So it’s those three components. It’s the patient population, the problem that’s facing the patient, and then the outcome that is really worthy of solving, [crosstalk 00:07:28] solving that problem.

Dan:    And ideally, you should be able to tie all of those things into a very succinct needs statement right? That contains each of those three elements.

Eric:    Yeah, absolutely.

Dan:    And if you can’t do that, then it’s probably a sign that you haven’t really dialed into the problem that you’re solving.

Eric:    Right, right, yeah, yeah. And it’s very, very common. All too often, we see pitched [inaudible 00:07:53] from startup companies that spend a ton of time talking about their technology or their solution, and they have not even clearly spelled out the needs statement. So it’s a really foundational part of the process, and in many cases, companies should really be spending more time refining and spelling out that need to make sure that they’re solving a real problem that needs to be solved.

Dan:    Yeah, I think that’s something that struck me a couple of weeks ago. You and I were down at UPenn for that biomedical engineering student pitch meeting. And there were groups of some really talented and bright engineering students who were pitching health related technologies for their project that they’re working on. And in many of the cases it kind of seemed like there was a technology in search of a problem, rather than the other way round. That’s sort of what you might expect to see from an undergraduate student, but it doesn’t end with graduation. That’s something that people are not necessarily appreciating throughout the normal course of study to become and engineer or a business person or whatever. We still often see, even funded medtech companies, who haven’t really dialed into their proper needs statement and the problem that they’re solving there.

Eric:    Yeah, I think that what you mentioned about the engineering students, that happens everywhere, at all universities. The schooling of engineers is very solution oriented, right? You get your problem sets, those are given to you. And the job or the responsibility of the engineers is to really create the solutions that satisfy those problems, right? So, there’s very, very few parts of the engineer’s curriculum that’s focused on identification of the problem, right? So this is something that’s very, very common, it’s not intuitive to engineers or people that have a technical focus, to really be thinking more about that need and the problem and the patients. But it’s a super important part of this process.

Dan:    So, I guess then it becomes really important for, particularly if someone with an engineering background has an idea that they think might have a great application in healthcare, it’s really important to get clinical input early in the process, right? And understand how things are done now, and get some honest reactions to your potential new way of solving this problem.

Eric:    Yeah, so there’s a lot … One of the challenging things about medtech is that, the people that are buying the product are not the people who are using the product. So, the clinicians who are going to be using the product, a surgical device or a diagnostic system, they’re certainly going to have influence into the utility of the product, and how it’s going to compare to the other products or services that are currently being used. But they’re one of many, many stakeholders in this medical device procurement system. There are hospital administrators who need to really crunch the numbers to understand, does this make financial sense? There are regulatory bodies who might get in the way of this product from ever seeing the light of day. There’s the end patients who need to be adherent with certain technologies in order for them to be utilized.

Dan:    And there’s the payers right? Either the public or private payers, Medicare, Medicaid, or a private insurer, and you need to prove to them that the overall cost using your solution is going to be less in the big picture.

Eric:    Yeah.

Dan:    Than whatever the standard of care is.

Eric:    Absolutely. And that could be possibly the most critical aspect to really understand. What is going to drive change from a payer’s perspective? Whether that’s CMS or whether that’s private insurance. So yeah, these are all key things. But to your earlier point, it is definitely important as engineers are coming up with these ideas, to vet these concepts with clinicians. But they’re not the only stakeholders that matter in this really complex industry that we’re in.

Dan:    Right, right. So let’s talk about … Say you have an idea, you have a technology. You think you have an application for it in the healthcare space. And you’ve done all that leg work. You’ve got your needs statement, you’ve got some at least preliminary feedback, at least neutral feedback from clinicians or from people who are going to be working with the products itself to say, “yeah, this is a real potential solution to an existing problem.”

Dan:    You have your idea, and you want to start developing that. Let’s move into this talk about, “Now am I ready for a prototype?” IS that when I start building my first … Ordering parts and soldering things together, or are there more things that need to come into it prior to jumping into that process?

Eric:    Yeah, sure, Great question and a common question that a lot of early stage companies have is, “What should be my next, most logical step that’s gonna help me build value in the company?” And the way that I think about this is, when a company or new idea’s just getting off the ground, the inventors of this new technology, they have this very optimistic mindset. They are imagining what the world could be with this new solution that they are creating. And that leads into new concepts, and eventually this concept for a product that could result on a medical technology or medical device. So, it starts with optimism. And you need to have that optimism and opportunism to get to that point, where you have something on the table that you can evaluate.

But now when you’re looking at what’s the next step in product development, you need to kind of flip a switch. And you need to go from being an optimist and an opportunist, to being a skeptic. And being a skeptic changes your thinking a lot. I makes an individual think not about why the product will work, but more of a why the product is not gonna work. What are the reasons why this product could fail? Premarket, postmarket, whatever may happen, whatever the case may be. What are all of those factors? Then … So there’s a number of these factors, there’s regulatory risks, there’s clinical risks, does the product work in humans or with humans? There’s IQ risk, is there other technology that’s going to block this from ever coming out? There’s the payer risk that we talked about, there’s user compliance or adherence risk. There’s market risk, is the market going to be big enough to drive the investment that’s needed to move this technology along? So there’s all of these different risk factors. And so founders of new companies, inventors of new technologies, they need to get into this skeptics mindset, and they need to think about why might this product fail?

Dan:    Right. So, is that maybe … Something that is occurring to me as you’re talking about this is, is that maybe why we see so many new startups that are two person operation, right? And there’s very different personalities sometimes when you meet with a team. It’s a tow person team, and one of them really seems to be just boundless energy and ideas, and everything is kind of like roses and sunshine. And the other person is kind of a Debbie downer.

Eric:    Yeah.

Dan:    Is one way you could interpret it. You need both sides of those ways of thinking. And it can be difficult to combine that into one personality.

Eric:    Yeah, absolutely. I think the way that you put it is right. You need to have that optimist, the energy to move things over, but then you also needs to have the critical eye that’s questioning things.

Dan:    Yeah. Yeah. You know, my dad’s a mechanical engineer, and it always seemed to me when I was a kid, he was just such a downer on things. And one day he turned to me, and he said, “You know it’s my job to think of everything that could possibly go wrong, right?”

Eric:    Yeah.

Dan:    And when he explained it to me like that, it really put thing into perspective. He’s derisking all day everyday.

Eric:    Yeah.

Dan:    Basically is how he has to think.

Eric:    Yeah, very true.

Dan:    So, I think that concept of risk is interesting. Particularly in the medical device, medtech arena. I guess because people often talk about risk related to medical devices, but they mean it in a very particular area of risk. Which is basically what’s the risk to the patient if this device fails, right? So then, you were talking about other areas of risk. Regulatory risk, market risk, right? So talk to me about how you move through each of those areas, and go about trying to reduce your risk in each of those different sectors.

Eric:    Yeah, yeah, sure. So, as we started out, there’s also technical risk, and that’s probably the easiest one to tackle first. There’s a question about viability. Is this idea going to really work? And so the natural way to approach that is to come up with bread boards or test beds that allow a team to understand what the technical limits are of an idea. And so, one of the ways that as an engineering firm, here at Smithwise, one of the ways that we tackle that is, we try to simplify and isolate the key technical risk areas. So if there’s a core mechanism that really needs to fit within a certain size in order for a product to be viable, then we will just isolate that one mechanism and we will focus on iterating that in a very, very rapid way. If it’s an electrical subsystem that needs to be developed so that it can be managed, it can provide all of the functionality in a very low power environment, then we might isolate that electrical subsystem so that we can iterate that technology.

I think one of the approaches that does not work when you’re at the very early stages of looking at technical risk, is to try and merge all of these different things together, and create a single cohesive prototype. The reason being is that when you put all of these things together into a holistic prototype, the challenge is that, number one, it’s gonna take you a really long time to get there. And then number two is, when something goes wrong, you’re not gonna exactly know why or where it went wrong. It’s going to be a little bit nebulous, right?

Eric:    And then I guess the last reason is that development of technology, product development is a lot about iterations. And you wanna be able to reduce the size, the length of an iteration cycle as much as you can.

Dan:    And the expense, right?

Eric:    Yeah. Money is short for a lot of companies that are developing new medical technologies. So if you isolate that technology into a core area, it allows you to iterate that one specific subsystem much more quickly. And then once you get all of the performance of those subsystems the way that you want them to be, then you pull them together into that cohesive working model that demonstrates the overall system level functionality you’re looking to achieve.

Dan:    Right. So you can have a prototype that maybe is your electrical components prototype, your mechanical components prototype, your human factor prototype, right, that is, does this feel natural for the user? You might never tie these things together during the first prototyping phases right? That might be the next thing down the line after you’ve isolated each of those systems.

Eric:    Yeah, absolutely. And so I’m glad you brought up the human factor and usability type of prototyping. If I have a new medical technology, let’s say it’s a wearable. And it needs to be used by a person at home, and they need to be wearing this product for ten hours a day, hypothetically. If I’m testing out an idea, do I really need to have that mock up or that prototype fully functional in order for a user to give me feedback on it? Probably not. I can come up with a mock up that is very simplistic that just focuses on the key usability attributes that are gonna matter to that individual. So this could be a non-functional mock up that you take out to users, get their feedback on it, and better yet, it’s multiple mock ups. Because you’re simplifying things, it’s really just a dummy shell of a product, you can come up with six or eight different versions of this, and test of these versions with potential users. It’s a great way to get a lot of that longer term user usability and concept preference feedback to help you steer that direction.

Dan:    And that might really impact your design process very significantly, right? If you’re deciding where to place a sensor, and you think it’s gonna be going on someone’s wrist, but it ends up whatever, going around them in some way, or hanging from their neck or whatever the case may be. That will very much impact the rest of your design process with how all of those components function.

Eric:    Absolutely. It’s gonna drive all kinds of requirements, it’s gonna drive the size and the shape of the housing or the package that all of the electronic are gonna be contained within. It’s going to define whether it’s going over garments or under garments, directly on the skin, or hanging off a pocket or a bra strap, you know. It’s all of these architectural requirements from a usability standpoint are going to drive the design. So it’s really important to be thinking about that stuff up front. If you focus on technology too much at the front end, and you ignore a lot of human factors, it could be a rude awakening when you go out and get feedback from customers, and you realize you’ve developed the wrong product. And now you have to go all the way back to the drawing board, and start exploring these new configurations from scratch.

Dan:    I think that maybe some, or a lot of people have in their minds when they say, “I need a prototype” what they really have in their minds is, “I wanna be able to hold something in my hands when I make that Shark Tank like investor pitch. That is gonna look really slick and impress somebody right upfront.” But really, most of the prototyping process is really about clearing what isn’t right about your current design, right?

Eric:    Yeah.

Dan:    And so you can change it the next time round.

Eric:    Right, right. Prototyping is really in my perspective, it’s a learning methodology. It’s a way of thinking to test out your ideas in a very rapid way. So, yes, everyone’s goal is to have that cohesive prototype that demonstrates the full functionality, and it’s the right form factor, and it’s the right cost structure, and it has all the embedded functionality. That’s where everyone wants to go. But the way to get there is by taking this isolated approach, right? Isolating your risk factors, iterating those risk factors individually, and then merging them afterward. So, it’s a different approach than most start up companies take, but we believe it’s the one that results in the most efficient process.

Dan:    Hey listeners, if you have a great medtech story to tell, or maybe a suggested guest we should have on the show, or a topic in medtech you think we should cover, send me an email at marketing@smithwise.com. Or use the contact us form on our website.

So one other area that I wanna make sure we touch on is the regulatory approach. I think often people think of regulatory approval as kind of like once they get that stamp of approval from FDA, they’re home. They’re free and clear and now they can bring the product to market. But all that means, is that the FDA’s not gonna stop you from marketing your product, right? So, let’s talk about the different approaches to overcoming that regulatory hurdle, and then what comes after it.

Eric:    Yeah, yeah sure, it’s another factor that needs to be considered very early on in the process. For some products, like you mentioned, if it’s a consumer wellness device, a wellness device, maybe you do have the option of it could be marketed as an unregulated consumer product. Or, it could also be marketed as a regulated medical device. And it’s a really important topic for companies to consider at the very early stage, there’s implications to either one of those [inaudible 00:25:34].

Dan:    Sure. And that decision will really totally determine your whole go to market strategy, right?

Eric:    Exactly.

Dan:    Are you marketing it to consumers? Or are you marketing it to payers?

Eric:    Yep, yeah, yeah, yeah. Absolutely. And it will also drive certain design elements. So the design of the product, it may be of a different cost structure if you’re marketing it to consumers, rather than trying to get a product to be purchased by hospitals, right? So, these decisions that companies make at the very early stage, they have longer terms consequences that people need to be aware of.

But back to, there’s a number of other ways that you can get regulatory insights. For the longest time, people were fearful of getting together with FDA. They were fearful [crosstalk 00:26:23].

Dan:    You don’t want to be on the radar.

Eric:    Yeah. That they were gonna give you the black mark, and you were never going to be approved once you got that black mark. So FDA has evolved immensely int he last decade. They have programs now for doing informational sessions where you can collect feedback in an informal manner with FDA officials. There’s pre submission meetings where you can present the endpoints that you’re looking to achieve, an animal model that you’re looking to support. An IDE application, and collect formal feedback from FDA. So there are some really great ways to collect feedback from FDA, and it’s an important part of the process. Companies should not be avoiding FDA no until it’s too late.

Because again, if you wait too long and you get a response that, after you’ve invested an enormous amount in product development and clinical affairs, then you’re going to have to spend a lot of time and a lot of money redoing all of that front end effort. So, again, it’s about thinking about those longer term consequences, those longer term decisions, and trying to figure out how can I get some feedback as early on in the development process as possible.

Dan:    Right, and that maybe ties into another sort of premarket thing you need to worry about, which is intellectual property and patents, right? So, we talked about what are the other solutions to this problem? The fact they might not be just a similar piece of technology, right?

Eric:    Right.

Dan:    But when it comes to exploring existing or prior art, right? How do you go about that process?

Eric:    Yeah, so there’s a few key pieces there. There’s first looking at what is out there, what does the current patent landscape look like? And oftentimes the way that this is started is individuals, engineers, or people that are founders of the companies will hop on Google patents or the USPTO website, and start to do [inaudible 00:28:34] style searches. Looking at typing in key words and finding the patents that are most relevant. Once they find those initial patents, then following the references and citations that link to the most relevant patents, that’s a great way to get an initial pass of the overall patent landscape.

So, understanding that patent landscape at the front end is pretty critical. A lot of times investors want to know, have you got a formal legal opinion of freedom to operate? That’s different level of patent scrutiny, and it’s usually a pretty costly undertaking. So in most cases, startup companies that are resource constrained do not invest in that until a little bit further along in the process, unless their investors are insisting on it.

Eric:    But you at least need to do preliminary due diligence to understand what IP is out there, right? And what IP is protected. Because just because there’s no product on the market that utilizes this technology, doesn’t mean that somebody doesn’t hold the patent to it, right?

Dan:    Right, I mean, that’s a great point. There’s a lot of patents for technologies that are not on the market. And so you do have to be looking at the patent database to see if you’re stepping on another company’s patent.

Eric:    Another good source of looking at products or products that have become commercial or were commercial at one time, is in looking at FDA’s [510(k) 00:30:15] database. So this is of course limited to products that are 510(k)s, but this allows you to type in a certain classification code, and identify all of the products that have been cleared for 510(k). So that’s another good way to get a basic understanding of what products have historically received FDA clearance, and maybe what products are still on the market in a particular category.

So, all of these things that we’re talking about are strategies that you need to begin defining very early on in the process.

Dan:    What about your go to markets? How do all of those tie in to your go to market strategy? And making that ultimate go, no go decision that your investor is going to have to make of, does this market opportunity justify the amount of investment that you think is needed upfront?

Eric:    Yeah, yeah. So, one thing that we didn’t talk much about yet, but it’s a really key aspect of go to market strategy for medical devices, is the clinical risk. So how do you, how does a new company prove that their technology is superior from a clinical perspective than the standard of care? And this is interwoven with the market strategy, right? There might be some clinical work that is needed for regulatory clearance, but there’s another level of clinical work that is often needed to prove the value of a product related to the competition, right?

Eric:    So that type of clinical study might be looking at reduction in readmissions. Or it might be looking at reduction in a certain cost element. Or hospital stay time. Whatever those end points are, you need to identify how am I going to prove to the medical community that this technology is superior? And so, whether it’s a 510(k), or whether it’s a PMA, you really have to be thinking about that clinical strategy. How am I going to prove that this is better?

And so that often feeds the go to market strategy. If you can conduct that clinical study in a really efficient way, and present the data such that it is a cost savings to a hospital, then maybe the hospital is the payer. If instead, you are looking at providing a product that’s falling under an existing reimbursement code, and you’re looking to do this more cost effectively than competing technology, then that’s another way to get hospitals to consider your product or technology.

In certain cases, there is no code. For a lot of [inaudible 00:33:06] devices that are being developed and new PMAs, there may not be a new code, or code that’s available. And so this can be a much more lengthy process. But it’s one that needs to be considered really early. What does that clinical study need to look like in order to compel CMS to set up a new code, and to provide the coverage that’s going to be needed to justify this new medical technology down the road?

Dan:    Right. So that’s an example I guess of how your regulatory pathway is going to very much spell out or help define your business plan. Because if you’re going to market via a 510(k) pathway, versus a [inaudible 00:33:50] pathway, that makes a huge difference in your time to market, right? Which translates into overall cost of bringing the product to market.

Eric:    Right, right. Yeah, so that’s a good point. If you’re looking at the [inaudible 00:34:05] 510(k) pathway, then you may need to run some additional clinicals. And there may be uncertainty about the coverage, or the coding that’s going to be available to that product longer term. So again, looking at that regulatory pathway very early and using that as a key point to make your architectural decisions about the product development, that’s a really important consideration at the front end.

Dan:    One of the things I wanna make sure our listeners understand in this first episode it that, we’re trying to set the stage here for what it takes to bring a new medical product to market. Whether it’s a medical device that’s regulated, or whether it’s a consumer wellness product. There are all of these different areas that come into play. We’re going to be, in the coming episodes, sitting down with both experts in these particular areas, because you should always have expert opinions as you get further down the track. And we’re also going to be sitting down with folk who have been through this process recently in maybe a new medtech start up. So, I think you and I are both really looking forward to those conversations. So we have a great slate of folks who are signed up to come and have those conversations about clinicals, and what do investors look at when they’re deciding whether or not to fund a new company? And what’s the process for determining what the existing IP is? And how do you approach the FDA and inform your regulatory strategy and all that.

So, I think this is gonna be a really great series, especially for people who are early on thinking about how to begin that process.

Eric:    Yeah. I think that’s dead on. So we are, at Smithwise, we’re focused on product development, right? We’re focused on a lot of the engineering. The design, the manufacturing of new medical products, but one of the things that I realized throughout my career is that the product development of medical technology is complex. And you really need to be considering all of these different factors that we just discussed. If you try to develop a product in a vacuum, then you’re gonna have some big nightmares to address later on. And so bringing in these experts to talk about all of these areas is going to help us better understand how to integrate those aspects into product development, and it’s hopefully gonna allow our listeners to get the insights that are needed to shape their product development strategies as well.

Dan:    Yeah, I think what we’re really talking about is going in to the product development and the design and engineering phases of your project with your eyes open to the different hurdles that you need to get over in these various areas. It’s a little bit like that Gilligan’s Island special, where the Professor gets back from the island and he’s been inventing in a vacuum for the past 10 years, right? Nd he’s got all these great ideas, but then he brings them back to civilization to find that they already exist.

Eric:    Yeah, right.

Dan:    So, I think a real theme that’s gonna come out here is, the earlier the intervention you can get, the better input you can get from people who have experience in these different areas. Whether it’s clinical, or legal, or regulatory, right? The better off you’re gonna be throughout your product development process. The faster you can iterate and bring your device to market, and the lower you can keep your costs. So I think that’s part of what we’re hoping this podcast series really helps people think through.

Eric:    Absolutely. Well said.

Dan:    Well Eric, thanks for sitting down today, I’m very excited about kicking this off, and I think you are too, and we’ve got a very good slate of people who are ready to talk about these issues with us.

Eric:    Yeah, Dan, should be pretty exciting. Looking forward to it.

Written by Daniel Henrich

Written by Daniel Henrich

Director of Marketing at Archimedic

Regulation Meets Collaboration: MDIC Five Year Reflective

Last month, I attended a public meeting in D.C. where FDA/CDRH directors, medical device company leaders and academic researchers came together to design new ways to improve U.S. competitiveness in our industry. Pretty lofty goal. The group is called the Medical Device Innovation Consortium (MDIC) and it’s a novel creation, five years in existence, dedicated to continuous improvement for the benefit of patients, manufacturers, and our overall medical knowledge. I went with skepticism and returned a believer that things are truly improving on all these fronts.

It was an impressive list of speakers during this one-day conference. Scott Gottlieb, Director of the FDA led off with a talk describing the new mindset he and his team have towards improving FDA processes, responsiveness, and openness to working with device manufacturers. The meeting closed with Jeff Shuren, Director of CDRH explaining the accomplishments and next goals of the numerous working groups of MDIC. In between were intriguing round tables, break-out sessions and fireside chat interviews.

Several themes emerged, including the opportunities, challenges, and risks presented by advances in technology and their entry into the device space. We discussed the importance of and strategies for harnessing and policing the massive amounts of data being generated throughout the healthcare chain. Many conversations touched on how to keep the patient’s experience and well-being at the center of our work with so many other factors competing for our attention.

But more than any of these topics, what impressed me was the change I’ve seen in recent years in the relationship dynamic between industry and FDA. For most of my career, interactions between industry members and agency representatives could have been fairly described as cautious, mistrustful, and, too often, adversarial. In the past decade, however, I’ve witnessed a significant and positive paradigm shift in this area.

The mere existence of the MDIC is a sign of this progress. In its own words, “MDIC is the first-ever public-private partnership…with the sole objective of advancing medical device regulatory science.” The organization provides a platform for medical device regulators, industry members and advocates, and even citizens to interact around the most critical issues facing our industry today. If you’re interested in learning more, I’ve added links below to some of the more compelling topics discussed:

FDA Commissioner Scott Gottlieb signified the agency’s commitment to speeding the entry of new, effective, safe devices to market by highlighting of several initiatives that are helping to modernize and streamline the process. These include:

– FDA Payor Programs that facilitate communication between device manufacturers and payors (including Medicare and private insurers) beginning before device approval, speeding coverage and reimbursement decisions, and expediting patient access to new treatments.

– Draft Guidance on Humanitarian Device Exemption (HDE) Program that seeks to update FDA review procedures for devices intended to treat conditions affecting fewer than 8,000 individuals in the United States.

– Brand New Draft Guidance on Dealing with Uncertainty in Benefit-Risk Determinations for PMAs, De Novos and HDEs that seeks to better define these processes and apply a more scientific approach to decision-making under these circumstances.

As a 25+ year veteran of the device industry, I’m actively monitoring these initiatives at FDA with interest and optimism. I believe we are witnessing examples of government performing more efficiently and working to both protect patients and ensure their access to new and more affordable treatments.  

Whether you see things the same way or not, I’d love to hear your take on these initiatives. Strike up a conversation with me and other colleagues by sharing this on LinkedIn or sending me an email at CScholl@Smithwise.com.

Though not yet available as I write this, you’ll be able to replay other 2018 presentations on MDIC’s site soon.

Chris Scholl
Director of Mechanical Engineering
Smithwise

Written by Chris Scholl

Innovation Hurdles: Why Pediatric Devices Don’t Make it to Market

Photo Above: Session speakers (from L to R) Dr. Richard S. Davidson (CHOP), Greg Walters (Essential Medical), Adam Dakin (Dreamit Ventures), Matthew Maltese, Ph.D. (CHOP), and Eric Sugalski (Archimedic)

Runaway Train

Imagine there’s a runaway train barreling down the track toward four innocent people. You sit in the railway control room, your hand on the switch that would divert it down an alternate track where it will kill one person instead. Do you flip that switch? This was the question posed last Friday by Matthew Malteseto his audience. With nodding heads and hands raised slowly off their tables, most audience members seemed to agree reluctantly that sacrificing one person to save four others was the ethical choice in this situation. “Alright,” Maltese said as he looked around the room and saw consensus forming, “but how about now?” On the screen behind him, a photo of a little girl had appeared, replacing the faceless silhouette of the single victim the audience had just agreed to sacrifice for the greater good. Not a single hand remained raised.

Maltese was speaking to FDA representatives meeting for the day at Children’s Hospital of Philadelphia, where he serves as Director of Biomechanics Research. The room full of government regulators and reviewers were in Philadelphia for a course on pediatric orthopedic medical devices, visiting CHOP to learn about the clinical and regulatory factors that contribute to the current standard of care for children.

Course attendees heard from pediatric surgeons and practitioners, as well as other professionals working throughout the healthcare chain to bring the devices to market that will help children suffering from spinal deformities such as scoliosis.

Maltese’s session was a panel discussion titled “Capital Investments in Pediatric Device Development.” The panel included a pediatric surgeon, the CEO of a medical device company, a venture capitalist, and the president of a device engineering firm. These four panelists expounded for the audience the particular challenges pediatric devices face in their path to market.

Challenges in Pediatric Device Funding

Maltese also heads up the Philadelphia Regional Pediatric Medical Device Consortium, an FDA-funded organization working with players in the Philly healthcare hub to bring critically-needed pediatric devices to market. He opened this session with the train analogy to ensure that his audience was aware of the jarring realities that exist in the field of pediatric device development. In short, due to the respective sizes of the patient populations, it’s much easier to obtain the resources needed to bring a device to market for adult patients than for children. While it’s easy to say in general that researchers and investors should focus their resources on the devices that will bring the greatest good to the greatest number of patients, the calculus shifts in the minds of most when they consider one of the most vulnerable, and yet underserved, patient populations–children.

The skilled hands of orthopedic pediatric surgeon Dr. Susan Nelson (Univ. of Rochester Medical Center) guide those of an FDA representative as he places his first spinal screw on a synthetic model during a session break.

 Adam Dakin, Managing Director of HealthTech at Philly-based Dreamit Ventures, sat on the panel and emphasized the main challenge pediatric devices face in their initial review by investors. The first question, Dakin told the audience, is always “what’s the market size?”

Another industry member on the panel was Eric Sugalski, founder and president of Archimedic, a medical device engineering firm with offices in Philadelphia and Boston. Sugalski, an engineer and entrepreneur, explained that pediatric devices are often successful in obtaining their early seed round funding, perhaps in the neighborhood of $200-$500K. This initial investment helps the device clear early design and intellectual property hurdles, bringing a promising concept to the stage of a working prototype.

Most devices come to the U.S. market through the 510(k) Premarket Notification regulatory pathway, which depends on the ability to demonstrate that the device being reviewed is “substantially equivalent” to an already-approved “predicate” device with regard to safety and efficacy. Pediatric devices, however, often have no established predicates. In this case, a device must go instead through the Premarket Authorization (PMA) channel, requiring extensive clinical data to be generated, compiled, and analyzed.

 Todd Lexer of NuVasive demonstrates the MAGEC® system to course attendees during a session break, designed to reduce the number of surgeries needed to treat early-onset scoliosis in children.

This stage, Sugalski said, is where pediatric devices often hit a wall. Series A investments, “which can cross the eight-figure threshold,” typically fund the clinical trials needed to demonstrate safety and efficacy. However, investors are unlikely to shell out ten million dollars when market opportunity is limited by a small patient population.

This limited market opportunity puts an even greater-than-usual pressure on the device development timeline. Time to market is a critical component of the viability of any investment so, if regulatory review times and clinical trials can’t be compressed, an otherwise promising pediatric device may get left on the scrap heap.

Progress, But a Long Way to Go

The panel praised FDA for improvements made by the agency in recent years in fostering a more collaborative environment when working with innovators. “The interactive nature of the agency lately has been fantastic,” said Greg Walters, CEO of Essential Medical, a device startup based in Philadelphia. But, he added, FDA representatives should understand that time in regulatory review can quickly cut into and compromise the feasibility of a particular project, so it’s essential to be as efficient as possible in getting over that hurdle.

Dakin agreed with Walters that the relationship dynamic between the agency and innovators has improved. Early in my career, he explained, I would have described the process as “doing battle with FDA.” Now, reviewers are working to bring investors to the table in a spirit of increasing collaboration. Still, he emphasized to his audience, we as entrepreneurs can “live or die by one letter or FDA action,” so it’s important for agency representatives to understand the business constraints that determine whether a device ultimately makes it to market.

In order to better serve pediatric patients and bring them treatments that can improve or even save their lives, the panelists emphasized that regulators must continue to look for ways to reduce barriers to commercialization while safeguarding patient safety. Panelists pointed out that FDA has helped in many instances to shorten the review process by working out critical details through phone calls, rather than a series of official letters and responses.

“In a minute or less,” Maltese asked the panel as time was running out, what do you think can be done to change the pediatric device landscape and make it more appealing to investors? Sugalski seemed to voice the consensus of the group with his quick summary—structure things to make serving small but vulnerable populations more viable from a business standpoint. The traditional device revenue model is difficult due to population size but the government can help through tax incentives, grants, extended patent protections, and other tactics that have seen success through programs such as FDA’s Orphan Drug initiative. The rest of the panelists beside him nodded in agreement.

Written by Daniel Henrich

Written by Daniel Henrich

Director of Marketing at Archimedic

DO YOU REALLY NEED A PROTOTYPE?

There may be more cost-efficient and less time-consuming methods than developing a prototype to generate the critical information needed to move a business forward.

Originally posted on Med Device Online

Written by Eric Sugalski, President of Smithwise 

 

Early stage medical device innovators and entrepreneurs often feel that the first critical step in their new venture is to build a prototype. Without a prototype, these visionaries rely on verbal descriptions and rough diagrams to help articulate both the medical problem and their proposed solutions. A functional prototype advances the conversation with key stakeholders and builds the value of the medical device concept and business opportunity.

The challenging part is that prototypes cost money, and designers at the idea stage usually are in short supply of financial resources. While widespread availability of 3D printing and other rapid fabrication methods has reduced the costs of fabrication, rarely is prototyping a matter of simply fabricating parts. Prototyping is an output of a product development process, which most often involves detailed design and engineering efforts. Trying to build a prototype without investing in competent engineering and design is like trying to build a house without skilled carpenters, plumbers, and electricians. Typically, investing in a development process that would result in a functional and reliable prototype is much more costly than bootstrapping entrepreneurs are able to endure.

Eventually, to advance a medical device business, there certainly needs to be a prototype to demonstrate functionality and to serve as a testing platform. However, there may be more cost-efficient and less time-consuming methods that can be deployed, at an early stage, to generate the critical information needed to move the business forward.

So, what then is this critical information that needs to be addressed at the idea stage? Most often, the focus is, “will it work?” While this is a critical question, it often is only a small part of the challenges facing early stage medical devices, and should be expanded to include:

  • Will it work within the economic constraints of customers and payors?
  • Will it work without infringing on existing intellectual property?
  • Will it work within a development timeline and budget that is acceptable by investors?
  • Will it work while meeting regulatory requirements for safety and efficacy?

Often, these other business risk factors (healthcare economics, intellectual property, regulatory affairs, etc.) are just as important — if not more so — than the product risk factor of functionality. Furthermore, addressing these business risk factors does not require designing, engineering, and prototyping. These factors can be addressed through secondary research and brief reviews with industry experts.

Before undertaking on any type of product development effort (including prototyping), these key risk factors should be thoroughly evaluated and documented. Even if these factors have been sufficiently addressed, and a prototype is the next logical step, it still is best to isolate the most critical product risks and target prototyping efforts on reducing them:

  • Technology risk — Are there critical operating parameters that enable the device to meet performance expectations?
  • User and customer risk — Will customers be inclined to adopt this new product and to incur the behavior changes that may be required for its use?
  • Manufacturing risk — Are there existing, available manufacturing processes and materials that enable this product to be produced with reliability and scale potential?

It is tempting for designers to attempt tackling all of these product risk factors (and more) in a single prototype build. But, the reality is that prototyping is a process of experimentation. Very rarely does any experienced product development team get it right the first time. For novel medical devices, the ideal product development process anticipates change and builds in methods for adapting to unforeseen circumstances. It is a process that generates rapid prototypes focused on specific questions, and then uses an iterative approach to identify the optimal solutions.

Below are some methods that can be used to target these individual risk factors:

Prototyping To Address Technology Risk:

When new functionality needs to be developed and evaluated, it often is better to build a focused subsystem breadboard or a testing fixture. This approach focuses exclusively on the technical area of concern and provides means for swapping critical components — such as motors, springs, and sensors — in and out. It enables rapid experimentation to take place in arriving at the conditions that will result in ideal performance.

However, a breadboard developed with the intent of swapping components and optimizing parameters may be far from the ideal product form factor. Breadboards often are large and lacking aesthetic appeal, since they need to account for an array of interchangeable components. Still, prototyping through a breadboarding approach can be an effective and efficient means of reducing technology risk.

Prototyping To Address User And Customer Risk:

When developing a product that may not currently exist in the marketplace, gaining user feedback early in the development process is a crucial step. Too often, product developers assume that customers and users will adopt the novel product based on its merits — a gamble that often results in costly redesigns late in the design and manufacturing process.

But, addressing customer and user perspective rarely requires the new product’s full functionality. Often, sharing with target users an array of non-functional use-case mockups can yield greater feedback than sharing a single functional prototype. Customers care about the product’s end benefits, not the technology that enables those benefits. Attempts to quickly develop a functional prototype for user evaluation typically create an unrefined (i.e., bulky, non-ergonomic) contraption that tells you things you already know. Evaluating customer perceptions and concerns can be much more effectively accomplished through use-case mockups that focus on the end benefits to users, as well as the varying trade-offs that may need to be considered.

Investor Demonstration

When functionality is needed purely for demonstration purposes, often the fastest route for achieving this demonstration is cannibalization and repurposing of an existing product that has similar functionality. For example, one might take the electronics (e.g., wireless chip, sensors, power source) from a commercially-available consumer product and package them within a custom enclosure that has mechanical elements sufficient to perform a basic demonstration of the product and the value proposition.

Often, animations and renderings can supplement these demonstration prototypes to provide the visuals necessary to more clearly articulate the longer-term product vision. Rarely does a prototype need to be fully customized and executed perfectly for an investor to understand the value proposition. While a prototype may be one of the key preparations required for an investor pitch, most savvy investors will be more concerned with the business risk factors (regulatory pathway, intellectual property, etc.).

Which brings us full-circle to the question, “Do you really need a prototype?” Stated simply, a better approach is to list the numerous risks facing your new venture, and then deploy a product development strategy that reduces those risks through the most efficient means possible. Prototyping certainly will be a part of this risk-reduction strategy, but prototyping should not be considered the strategy itself.

 Written by Eric Sugalski

Written by Eric Sugalski

Eric Sugalski is the founder and president of Archimedic, a contract medical device development firm with offices in Boston and Philadelphia. Sugalski has led the development of a novel pediatric life support system, cardiovascular implants, laparoscopic surgical devices, and an array of wearable diagnostics. In addition to his technical background, Eric provides companies with product development strategy that encompasses regulatory, reimbursement, and fundraising requirements. Eric obtained a B.S. in mechanical engineering from the University of Colorado Boulder and an MBA from the MIT Sloan School of Management.