Summary
There are several forces at work that could adversely affect medical device innovation and, ultimately, availability of medical devices to patients. The latest developments at the Food And Drug Administration suggest that device approvals will get more scrutiny and will be slowed down. Add to that other developments in progress in the medical device industry, and the U.S. medical device industry may well lose its once dominant position.
Analysis
Reports of increased scrutiny resulting in slower device approvals by the U.S. Food and Drug Administration (FDA) indicate that the new leadership at FDA will be less industry-friendly. Longer approval cycles in an industry that already faces one of the strictest regulatory environments in the world will shift the focus of device development more and more to other countries. Already, most device developments are approved in European countries well before they are approved in the U.S. because of a shorter and easier approval cycle.
If we add to this the new Medical Device Safety Act, which is currently under consideration in Congress and which will probably pass, increases in liability lawsuits will further increase the cost of medical device development in the U.S. and add to this trend.s
Entrepreneurship and small-company innovation, which used to offset some of these regulatory pressures placed on the industry in the U.S. with high productivity from entrepreneurs with an appetite for risk, will no longer be able to do so: Venture Capital investments in medical devices are down to 50% of what they were only a year ago. And while there is significant government funding of medical technology research, there remains a big gap between research results and viable medical device products in the marketplace.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
