Medical equipment

Patients Will Feel the Pain as FDA Slams Medical Device Industry With Growing Regulatory Burdens

Businesses that founder or just never get launched won't suffer anywhere nearly as much as the people who would have benefited from their innovations.


Javier Larrea/agefotostock/Newscom

Unlike your doctor under Obamacare, if you like your medical device, you can probably keep it. But getting new devices to market through the Food and Drug Administration's regulatory gauntlet isn't getting any easier. An FDA medical labeling rule change currently in its comment period would add an additional 1.6 million hours to the workload of private sector workers and federal regulators. And that's in an industry that is already hobbled by red tape.

Rules like that don't just stifle innovation and hurt businesses—they harm the people who depend on the sometimes life-saving products those businesses develop and distribute.

Once implemented, the FDA rule changes will lead to an increase of 1,598,480 more hours required to comply, according to a recent notice from the agency. That would bring the estimated annual recordkeeping burden for medical device labeling regulations to about 3.3 million hours for FDA employees and 9 million hours for those in the industry.

That's a lot of paper-shuffling—burdensome paper-shuffling at that. And it's not as if the medical device industry is otherwise red tape-free and has spare time on its hands to deal with bureaucratic demands.

A Pricey Process

"Policymakers should examine whether the lengthy and expensive FDA approval process is necessary," Iris Huang of Rice University's McNair Center for Entrepreneurship and Innovation urged last year.

Medical devices actually have two tracks to winning FDA approval, Huang noted. One is the less demanding 510(k) clearance for devices that are "substantially equivalent" to devices already on the market. "The average total cost to bring a low- to moderate-risk 510(k) product from concept to clearance was $31 million, with $24 million spent on FDA-related activities," notes Huang. For more innovative devices, following the demanding premarket approval (PMA) path cost $94 million, "with $75 million spent on FDA requirements."

Rather than risk a full bureaucratic ordeal that awaits innovation, Huang suggests that many companies likely focus on tweaking existing products, slowing the introduction of advances to the market.

Josh Makower, a medical technology entrepreneur and consulting professor of medicine at Stanford University Medical School, agrees that America's medical device approval process is a barrier to innovation. In 2010, he and his colleagues surveyed 204 companies active in the medical device industry.

"Survey respondents viewed current U.S. regulatory processes for making products available to patients (the premarket process) as unpredictable and characterized by disruptions and delays," he wrote. Businesses complained that the FDA personnel they had to deal with disappeared and were replaced, and that regulators skipped key meetings.

That the regulatory process (if you're going to have one) could be done better is clear from the industry insiders' preference for the much faster and cheaper European process. Streamlined approvals across the Atlantic have resulted in devices being made available to Europeans an average of two years and as much as six years before Americans saw them.

Or maybe even longer.

Thwarting Innovation

"Eight years into our journey, thousands of individuals have used our product in countries where it has been approved," reveals Shantanu Gaur, co-founder of a company that developed a new weight-loss device, in an article published last year in the medical industry publication STAT. "But we have yet to gain approval in the U.S.—a long and expensive process."

Many companies now pursue overseas markets before even attempting what Makower calls the "time-consuming, expensive regulatory processes in their own country." That's if they bother with the U.S. market at all.

"Regulatory submissions for innovative new medical devices have been declining in the U.S. over the last several years," Makower warns. Those lost submissions include established firms that have refocused their attention on incremental changes, as well as potential new firms that might have been, but were deterred by the regulatory gauntlet.

"Startups face particular challenges in navigating the FDA regulatory process," Huang notes. "The total average review time for small companies is 330 days, as opposed to 177 days for large companies." That's unfortunate, given the data showing that small firms are far more likely than large, established companies to introduce innovate devices instead of tweaking existing products.

It could be—and was—worse. The Affordable Care Act imposed a tax on gross sales of medical devices to fund grandiose plans for reshaping healthcare That tax took quite a bite out of the companies it affected.

"In 2012, publicly traded medical device companies cut 10,000 jobs, in part, to brace for the impact of the tax," Boston's WBUR reported. After results like that—and lower-than-anticipated revenues—the tax is currently under an extended moratorium and may be outright repealed.

Its repeal would be a big help to the medical device industry. But if that boon restores some of the jobs lost at medical device companies, how many of the hires will be needed jut to deal with another 1.6 million hours in government-mandated paper-shuffling?

Under the growing bureaucratic burden, the entrepreneurs whose businesses founder or just never get launched won't suffer nearly as much as the people who would have benefited from their innovations.

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  1. Eh. 12 million hours a year is only 6000 full time jobs. Compare that to the estimated 3 million full time jobs for the income tax.

    Piece of cake!

  2. FDA getting out of the way of “medical devices”? Really? Any time soon? GOOD LUCK with that!
    Just the other day, I tried to market, for FREE, a new “app” I wrote? Just snap a picture on your I-Phone and have the app analyze the picture you just took? And it SOLVES that age-old “bane” of husbands and boyfriends everywhere! “Does this dress make me look fat”? ? “Well honey, I dunno, let’s see what my I-phone and the ‘Does this dress make me look fat’ app has to say” SNAP and go!!!? Your opinion is taken OUT, you are OFF the hot seat!
    As publisher of this “app”, I was charged with “diagnosing obesity, a medical condition, w/o a Doctor’s License”. I am writing this post to you, Beloved Reasonoids, from jail? I apologize for my crimes?

    Well actually, my cell mate? You think MINE was a huge crime against humanity, wait till you hear of his or hers (he-she-it deserves his/her privacy, we all know the townspepples will be out there with pitches & torches if / when they hear of his / her crimes? ) He / she BLEW ON A CHEAP PLASTIC FLUTE W/O A DOCTOR’S PRESCRIPTION! This is no joke, the FDA who made this “lung flute” be by-prescription, are the joke? Go search for “lung flute” in my web site for details, at ?

    1. “Does this dress make me look fat?”

      No, your fat ass makes you look fat.

      Wakes up in hospital three months later…

  3. And Hillary Clinton is horrified by the very thought that Trump might start firing people in his administration who oppose and undermine his agenda. My complaint about Trump is that he’s so unprincipled and scatter-brained and ill-advised that he didn’t have a comprehensive list of People Who Need to be Fired 5 Seconds After I Take Office made up two years ago. How hard is it to copy/paste into the List of People Who Need To Be Fired the contents of the List of People The President Can Legally Fire?

  4. Damn it I thought I could beat SQRLSY to this one! Quite foolish of me, I’d say. You literally have to get up pretty early in the morning…

    1. They make me get up WAAAY early in prison here, it’s part of the punishment process! Teaches me NOT to publish “Does this dress make me look fat?” cellphone apps!!!! (W/O spending $30 million for FDA approval process first).

  5. I don’t disagree with the point of the article, but I have to mention it’s not as bad as it seems — the FDA does not regulate the practice of medicine. Medical professionals are free to buy any device they want to assist in the practice. FDA approval simply provides two things: 1) it allows manufacturers to market the device for clinical use; 2) it can be used as a CYA in law suits. My hospital buys medical devices not approved by the FDA all the time. In fact, I actually oversee some of them. Our accreditation is based on the idea that WE did all the validation rather than the manufacturer.

    Drugs are a different story. But that’s less about the FDA specifically and more about the fact that the USA is so anti-drug that it is pervasive throughout our entire society which unfortunately includes the practice of medicine.

    1. Judging by all the lawyers advertising on TV about settlements and how to get a piece of the money regarding approved devices FDA approval doesn’t seem to be much of a protection.

  6. The Bleeding Edge: behind the terrifying new Netflix documentary
    The $400bn medical device industry is exposed in a horrifying look at a string of products that have wreaked havoc on patients

  7. And people wonder why American healthcare is so damn expensive?

  8. Sick and tired of winning.

  9. Given the number of clear and transparent frauds that are on the market as “medical devices”, including “toxin removal” and things like crystals that make claims relying on outright magic, I have to question whether this is too much.

    1. Yes… And how about that “E-meter” thingee from Scientology?

  10. So what?
    Without regulatory burdens patients would end up paying less in premiums and get better healthcare.
    No one wants that.

  11. What do I care? I’m a Roth IRA “early retiree” sucking on the government teat of ObamaRomneyHeritageCare Medicai expanion.

  12. good article i like that thank you guys .

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