Regulatory revolution in MedTech makes data much more valuable

The regulatory framework for medical devices and diagnostics in Europe and the UK is in the midst of revolutionary change.

One of the central changes is a dramatic increase in the amount of data (particularly clinical data) that must be collected and evaluated by MedTech manufacturers. This need for more data is in response to several widely-reported scandals in the sector. In fact, many in the industry have adopted the mnemonic More Data Required! for MDR, rather than the Medical Devices Regulation.

This increase in data is already having a real impact on the MedTech sector. A large number of existing products have been discontinued; estimates of 50% are common. More importantly, the effort (in both time and cost) to obtain a new approval is dramatically greater than under the previous framework. We are aware of exciting MedTech products that have experienced delays measured in quarters, and sometimes even years.  

The increased data requirements, particularly for clinical data, will significantly increase the value of the data held by MedTech companies, as access to such data will represent a significant barrier to entry to European and UK MedTech markets.

Restriction of the use of “equivalence”

Arguably, the change that will most significantly increase the value of clinical data is the restriction on the use of “equivalence” to justify approval of a new medical device. Equivalence allows a new device to be launched relying largely on the data that was used to support an existing “equivalent” approved device. This avoids the need to conduct new studies and can radically reduce the time and cost to bring new devices to the market.

The new framework savages the ability to rely on this pathway and compels developers of new products to gather new clinical data. This confers significant competitive advantages on originator companies as it dissuades potential competitors from bringing a product to market unless they are willing to invest in the costs (and risk) of new clinical studies. Even if a “follow on” manufacturer does invest in new clinical studies, this will significantly delay product launch, thereby reducing competition while the second manufacturer gathers new data.

Clinical data licences - A new opportunity?

This will provide companies with a new opportunity to grant licences of the data that supports the approval of existing products even after the original patents have expired. We have already had discussions with several companies about such “clinical data licences”.

Post-market data

In addition to the increased requirements for pre-market clinical data, the new frameworks impose a greater burden on manufacturers to collect post-market data regarding the safety and performance of devices in the real world. Manufacturers need to have more developed post-market surveillance systems and additional Post Market Clinical Follow-Up studies. These all require the planned, proactive collection and evaluation of safety and performance data. 

Reconciling increased demand for clinical data with GDPR considerations 

There is often an inherent tension between the MedTech regulatory framework and data protection principles. A key data protection principle is data minimisation, while MedTech regulators ask manufacturers to collect as much data as possible and hold it for as long as possible. As companies find themselves holding more and more clinical data that is special category personal data, they must also increase investment in data protection and cybersecurity systems.

How may increased data requirements change the dynamics of the medical device industry?

The focus on clinical data acquisition to bring a product to, and sustain it safely on, the market makes the data significantly more valuable. Given the up-front costs inherent in conducting clinical studies and in developing post-market surveillance systems, further consolidation in the industry is inevitable. Start-up companies may opt to license out their technology for a larger company to bring it to market rather than proceeding on their own. This is likely to favour larger companies (with established regulatory infrastructure and access to crucial clinical data) looking to acquire new technologies.  

Altogether, this will lead to reduced competition in many medical device markets, which could lead to an increase in prices for new medical devices. Data collected for compliance with the regulatory regime may also be helpful for companies in demonstrating the cost-effectiveness of their product in health technology assessments, thereby then helping gain reimbursement for products even if the prices are higher.

Increased data requirements are particularly acute for In-Vitro Diagnostics

The regulatory revolution is even more pronounced for in-vitro diagnostic medical devices (as opposed to general medical devices). Previously, 85% of in-vitro diagnostic devices could launch on the basis of a relatively light-touch self-certification regime. This proportion will plummet to around 10%. The difficulty that this poses has already led to an admission by the European Commission that the situation is “grave”, and to a plea from the European Cancer Patient Coalition to alleviate the alarming impact of the regulatory changes.

We are certain that the increase in the value of safety and performance data regarding in-vitro diagnostic devices will be even more dramatic than general medical devices.

Conclusion

MedTech regulatory revolutions have already increased the value of clinical data and we confidently predict that this will continue.

This article is part of a wider Value in Data series. To read other articles in the series, click here.