European Medtech SMEs Are In Denial Over EU MDR And New Clinical Data Needs

The EU Medical Device Regulation (MDR) is front and center for global medtech companies wanting to succeed in the EU in the next decade and beyond. Or at least it should be, but the fear is that smaller players are not ready for its stringent clinical trials regulations and many other key changes it will bring. The potential impact on the medtech ecosystem and the flow of innovation in Europe is becoming a serious concern.

The rules governing the generation and supply of clinical data – clinical trials/studies/investigations – are set to become much more stringent in the EU for medical device manufacturers and sponsors in two years' time.

It is for this reason that for the medtech industry clinical trials are at the top of a list of priorities compiled by Integrated Scientific Services AG (ISS), a medtech services CRO and provider to European companies, based in Biel, Switzerland. For ISS CEO Hansjörg Riedwyl, managing the changes in clinical investigations rules should be uppermost in the minds of the wider medtech industry that sees the EU as its main market.

In the EU, the new Medical Device Regulation (MDR) has just two years of its three-year transition time left to run: on May 26, 2020, the MDR (EU 2017/745) will come fully into force. Concern is mounting that companies are delaying making the adjustments and preparations needed to comply with the stringent new regulatory code, which, in extreme cases, could be fatal in a business sense.      

"There will be an impact," according to Riedwyl. Speaking to In Vivo at the Medtec Europe event in Stuttgart, Germany (April 17-19), he observed that the medical device industry is not generally accustomed to clinical trials, but now manufacturers will have to get used to methods that are rather akin to those used in the pharma industry. The methods won't be identical – they cannot be: it is not possible to do double-blinded clinical trials in every case (hip implants, as one obvious example). "But there will clearly be a movement towards more clinical trials, which will make the route to market longer," Riedwyl says. Exemptions foreseen in the MDR will allow low-risk products to use the literature route.

"If you can prove that your product is equivalent to other products on the market, then you do not need to supply your own clinical data," he points out. But the threshold to avoid generating these clinical data is increasing. A company must prove that its product is technically, biologically and clinically equivalent to another product, and this might mean gaining access to the data from other products. "This will lead to interesting dynamics: companies that were erstwhile competitors will have to start collaborating." The bottom line is that companies will have to open their books and technical files for each other if they want to avoid  their own clinical trials.

"This is an interesting and quite new aspect for the device industry – companies have a chance to save both a lot of money and time using this option, but we're not sure how it's going to evolve," admits Riedwyl. Some organizations have been experimenting already. SwissMedtech (a cluster organization formed recently from the merger of Fasmed and Medical Cluster), have sought to create a platform where competitors can start to talk together, to find out whether they are ready to share some clinical data – and thus reduce or avoid entirely the need for clinical trials.

"We're not sure how far managers and companies see the chance of this concept – which is effectively a way to survive under the MDR without conducting clinical trials." – ISS CEO Hansjörg Riedwyl

The equivalency route would be especially useful for high-risk products, implants for instance, which is where the trials are most expensive. "But opening up your books to a competitor will only happen if the third party can offer something in return. We're not sure how far managers and companies have understood this concept – which is effectively a way to survive under the MDR without conducting clinical trials," he states.

Rationalization Of Products – Change Of Ownership?

Riedwyl recommends a dose of reality for certain medtech manufacturers. "The differentiations between companies' products are maybe not as great as some of them think – in fact, in many cases the difference in terms of technology is quite small." He thinks the industry will go through processes already seen in other industries, where the lesson has been learnt that the differentiators are not necessarily through the technology itself, but are achieved through different types of service offerings, and marketing and training, etc.

A major Swiss dental implants company is one of those to have taken this on board.  It has done a good job of differentiation by service, offering training and education services, customer loyalty programs, marketing toolboxes for labs and a sound strategy on pricing tiers for different brands. It has been able to leverage a strong position in the universities, and has succeeded in strengthening its brand overall. This will be an interesting option go in the future, not just differentiating by technology, in many cases at least, the ISS chief executive believes.

For medtech trial needs, today, under the Medical Devices Directive (MDD, 93/42/EEC), the literature route has been the normal route (leading to a CER). This very well-established route was strengthened in June 2016 on the release of the new EU Meddev 2.7/1 revision 4 ("Clinical Evaluation: A Guide for Manufacturers and Notified Bodies Under Directives 93/42/EEC and 90/385/EEC"). This was partly a consequence of the Poly Implant Prothèse (PIP) controversy in France, whereby industrial grade silicone had been used in breast implants, leading to legal consequences and thousands of explants for the affected women. Among other measures, the literature route, as a result, became stricter, but it nevertheless remains the usual route for medtech.

Seeing the way the wind was blowing, Riedwyl decided in 2014 that ISS should invest in this business area, and set up a dedicated group for clinical trials. Frankly, he says that, to date, it has not yet seen the rapid lift off that had been expected. "While we have clinical trials running for customers, it's not a huge business yet."

But Riedwyl also thinks that will change, and that many companies will simply not be able afford clinical trials. For device clinical trials in the EU, a company needs to spend, say, €500,000 ($605,000), but for literature route method of clinical evaluation, the cost is around €30,000. The small and medium-sized (SME)-based medical device industry cannot universally afford these clinical trials costs. This is one of the criticisms of the MDR: many companies are in danger of simply dying as a result of the new regulation.

It could well be, that many of the bigger companies are monitoring developments in the knowledge that some smaller competitors will either drop away or become technology acquisition targets. But along with this development, industry investment levels will potentially drop too.

Taking The Pressure Off Medtech SMEs

That's where support tools like Decomplix come into the play. Decomplix AG, set up as a joint venture, provides a package of tailored services for SME clients, and while Riedwyl acknowledges that it won't solve all the problems, it is designed to support manufacturers who don't want to sell their company. It is a way of sharing some of the cost, says Riedwyl. The first medtech product went through the service in January 2018. "We are among the first to use this concept, which effectively means that the company outsources the legal manufacturing to Decomplix."

It is quite a new concept generally, and Riedwyl admits that there are not yet "hundreds" of requests to use the service. But his rationale is that companies are not yet experiencing the whole impact of the MDR, especially the smaller ones that perhaps cannot even see beyond their idea or technology and thus are not aware of the strategic and financial impact the MDR could have. Decomplix will perhaps need another year before it has serious traction. Those clients showing early interest are often the very companies that have already undergone a painful experience in this area.

Other than ISS and its partners, Decomplix has several other partners within its ecosystem, including law firm Beutler Künzi Stutz AG, creative innovative company Creaholic SA, a partner from the cloud, netrics AG, an app community player business, a clinician and a medical doctor/entrepreneur. Two more partners are sought – a German partner and a major clinic in Switzerland that is building a translational center.

It is both risk- and revenue-sharing, and if there is mutual interest, Decomplix takes an equity position. "It is much more than mere hand-holding, and should make it interesting for investors, says Riedwyl. "We're really going into the role of the legal manufacturer. We are responsible in terms of vigilance cases, and the product liability falls to us. In that respect, it is more than a service contract and far more than a consultancy concept." For this reason, Decomplix is very selective, and does full due diligence "because we are responsible for everything at the end of the day."

Clinical Data Medtech Terms Explained

Clinical data show the safety and/or performance information that is generated from the clinical use of a device. They are sourced from clinical investigations of the device concerned; or clinical investigations or other studies reported in scientific literature describing a similar device for which equivalence to the device in question can be demonstrated; or published and/or unpublished reports on other clinical experience of either the device in question or a similar device for which equivalence to the device in question can be demonstrated.

Clinical evaluation is a methodologically sound ongoing procedure to collect, appraise and analyze clinical data pertaining to a medical device and to evaluate whether there is sufficient clinical evidence to confirm compliance with relevant essential requirements for safety and performance when using the device according to the manufacturer’s Instructions for Use.

Clinical evidence is the clinical data and the clinical evaluation report (CER) pertaining to a medical device.

How far the model can go will vary, but ISS always starts with the CE marking. Nevertheless, ISS is a global company, and is also seeking Middle East and US clients, and in time, Asia clients.

As to taking on clinical trial work, ISS says that depends on the product. "At present, under the MDD, we can manage it in most cases with the literature route; once a product is actually on the market, data can be collected with much less effort," says Riedwyl. Premarket data collection is much more expensive. The medtech industry in Europe refers to the harmonized EU standard for good clinical practices (GCP) in medtech, ISO 14155.

Another factor to take on board is the substance-based class of medical devices – those that look like a medicament, but whose primary mode of action is mechanical. Many of these products are being upclassified under the MDR. Under the MDD, for certain products, it was easier and therefor faster and cheaper to get approval as medical device then as pharmaceutical product. Also those products are interesting candidates for the Decomplix model.

The Serious Connotations Of Innovation Being Under Threat

Riedwyl says ISS and Decomplix are driven by the aim to create innovation, and moreover private sector-driven smart business concepts rather than via the governmental route. But innovation is under threat: big companies like Johnson & Johnson look at the smaller companies with a view to buying them after they have proved the value of their inventions. But under the MDR, fewer smaller companies will be proceeding to this stage, and so the majors will have problems of their own kind, with fewer companies to invest in.

This is all adding to the growing apprehension about a potential lack of products in the future as the MDR kicks in, according to opinion in certain circles. If this were the case, the EU will surely come under pressure to ease certain requirements of the MDR, rather than be faced with not enough products for patients. "Trials can't be done faster, so the EU might have to create exceptions for certain products for fear of underserving patient needs," says the ISS CEO. "This is something we will see more clearly in two years' time," but in the meantime manufacturers should not count on that happening, Riedwyl stresses. 

Companies will need to broach serious clinical trial strategic considerations in the coming years as a result of the MDR. Very little is clear as yet. "It will be interesting to see how it evolves," muses Riedwyl. "Companies are still somewhere between frightened and reluctant, and I do wonder where it will all end up."