Medical tech sector worried about innovation, SMEs

This article is part of our special report Medical devices regulation.

SPECIAL REPORT / The European medical technology industry worries that a centralised pre-market authorisation system in Europe will destroy innovation, research and development within the sector. It warns especially that small and medium-sized enterprises (SMEs) could disappear with the proposed new system.

The industry said SMEs will not benefit from the proposed system, warning that they are the ones doing most of the groundwork when it comes to inventing new cutting-edge technologies which can save the life of patients.

The European Commission has tabled new rules for the approval of medical devices following a health scandal in France involving faulty breast implants.

Dagmar Roth-Behrendt, a German socialist MEP who is in charge of steering the legislation through the European Parliament, has proposed a centralised pre-market authorisation system for so-called ‘Class III’ devices, which represent the highest risk to patients, such as pacemakers and hip implants.

But Serge Bernasconi, chief executive of Eucomed, the European medical technology industry association, told EURACTIV that independent research has shown that the proposed EU approval system would delay patient access to life-saving medical devices by 3 to 5 years without adding additional safety.

He cited one example of a technology called “renal denervation” which is applied for the treatment of severe, uncontrolled hypertension for patients whose condition can’t be treated solely by pharmaceuticals. This technology is already saving the lives of patients in Europe while an estimated 7 million Americans with the condition are still waiting for this treatment to be approved.

Other examples cited by Bernasconi include two cardiovascular treatments (Cardiac Resynchronisation Therapy and Transaortic Valve Implantation), which have already provided patients across Europe with an additional 50,000 life years in the period between EU regulatory approval and US approval.

“These are just a few of the many examples where Europeans had access to these devices first and that lives were prolonged because of them. If you are a patient with no other choice – having access to these devices is really a matter of life or death,” the executive said.

The suggestion that a centralised pre-market authorisation system will allow for approval within nine months is extremely optimistic, Bernasconi added, referring to the draft report by Roth-Behrendt MEP in the European Parliament’s environment and health committee.

“There are points in the process which allow for potentially severe delays. Eucomed acknowledges that change is needed to improve the system, but this proposal shares many of the same well-known problems that cause delays in patient access and stifle innovation in the US under the FDA system,” the industry representative stated.

Consumers, patients call for safety first

Monique Goyens, director-general of the European Consumers’ Organisation (BEUC), has repeated along with patient groups that safety must be the top priority in an updated EU medical devices directive.

It underlined that recent health scandals involving faulty breast implants and toxic replacement hips have illustrated the need to strengthen safety checks on medical devices in the EU.

>> Read: Patient groups: Safety first in new medical devices regulation

Goyens supports calls for a centralised pre-market authorisation system and said the industry was not focusing on the right issues.

“We believe that the issue of a pre-market authorisation giving unnecessary delays is the wrong question. There is anyway a long delay from when a device gets a classification and until the patient has access to it,” she said. 

Killing smaller companies?

This view is not unanimously shared however.

Marina Yannakoudakis is a British MEP from the Parliament’s European Conservatives and Reformists (ECR) group, who is a shadow rapporteur on the medical devices regulations.

She told EURACTIV she is worried that too much bureaucracy in the certification process will cause delays in marketing new devices, citing the example of a small US company called CardioFocus.

CardioFocus manufactures products to treat atrial fibrillation, a very common hearth rhythm defect. Its product are implanted inside the heart and for this reason, they are classified as Class III device, meaning that risks associated with them is highest, receiving a great deal of approval scrutiny.

Stephen W. Sagon, who runs CardioFocus, said his company has tried to get its products on both the US and EU markets and experienced how the two different approval systems work.

CardioFocus brought the device to Europe in early 2009 and achieved a CE mark within a relatively short period of time. In the US a feasibility trial began in late 2009, and CardioFocus finally received permission to begin a clinical trial at the beginning of 2012.

“Call that a 2-3 year lag before we could secure FDA permission to initiate our trial,” Sagon said in an interview.

“Ultimately, the difference in the size of the clinical experience that was required for approval was an order of magnitude larger in the US than it was in Europe,” he said, adding that CardioFocus is still engaged in a clinical trial in the US.

“We have treated more than 1,000 patients in Europe since we began. Probably closer to 1,200-1,300. The product is working quite well. It’s only because it works so well that we continue to enjoy some real commercial success,” Sagon said.

As SMEs usually perform better when it comes to innovation within healthcare, according to Sagon, a stricter EU system with larger requirements of capital available to continue the efforts would result in the smaller companies scanning the globe for places with less commitment of resources.

Potential backlash

Daniel Bertholet, who is on the Medtech Task force of the European Venture Capital Association (EVCA), told EURACTIV that he had sent letters to MEPs and Commissioners to express his concern about possible changes in the medical device regulation.

He warned there could be a potential backlash on innovation, for SMEs in Europe, on jobs and patients as well.

Bertholet said Europe is one of the world-leading centres for medical technologies with a great medical community, very innovative, ready to try new technologies. The medical doctors are innovative in Europe and there is a strong engineering tradition as well. The industry employs more than 500,000 people, turns over €95 billion per year and encompasses some 500,000 different medical technologies.

“What we have seen in the last five years is that the FDA [US Food and Drug Administration] has raised its regulatory requirements so much that most US companies have come to Europe to perform their clinical development and launch their product in Europe first because they cannot access the US market before about four years. This can also happen in Europe if the regulation goes through as it has been proposed by the ENVI Committee,” Bertholet said.

“The European system benefits patients and innovation in Europe. It’s currently taking jobs from the US. It also means the most recent and innovative procedures are currently not available to US patients and medical doctors.  Now the system is at risk and this is too bad for Europe,” he said.

‘Risk of overshooting’

A centralised pre-market authorisation system in Europe would have a “dramatic” impact, according to Bertholet. He said companies will go bankrupt because if it takes five years to get market approval, it will be difficult to get financing as no one would want to lend to a company for five years without revenues.

“If we have a centralised regulatory system in Europe, we will lose innovation. We will have research and development in Europe, but the clinical development will be done somewhere else and the market launch will be done in some other places for example in emerging markets,” the investor said in an interview.

“A reform is necessary, don’t misunderstand me, but the Parliament is at risk of overshooting because of the PIP scandal which is really a fraud problem. There are other issues at stake, not only patient safety. There’s also job creation and to keep innovation in Europe,” Bertholet added.

He said that due to the FDA’s stricter approach in the US, less money is now invested in medical devices. A lot of investors have exited the sector, as they see it as a ‘high-risk sector’, and this could also happen in the EU.

“If the new regulation is approved as such, many European companies would probably have to relocate to Asia. They would have to turn global very quickly. Jobs would be created elsewhere and patients would be treated later in Europe than other patients around the world,” Bertholet said.

Balance and trade-offs

Asked how many heart patients have died in the US, waiting for CardioFocus’s product to come on the market, Sagon said:

“It’s certainly impossible to know. What we see today is that devices that are approved for our clinical application are reporting less successful results than we are. I don’t think as a result, I could have counted the number of patients who have been neglected, but I could probably say that more patients would have been better treated had they had access to this technology at an earlier date.”

The CEO of CardioFocus said the healthcare systems make the determination to do no harm, a pledge very similar to the physician’s oath.

“By doing no harm, does that mean you are doing the best possible job you can? Because trying to do the best job possible job can always involve the risk that you might fall short. These are inherent trade-offs,” he said.

“I think at the end of the day, it’s about balancing the assurance of quality, most importantly, the quality of the people that you engage to do the work,” Sagon stated.

The CardioFocus executive said the European system has created an opportunity to engage the highest quality people to do the most efficient work. It has helped European physicians be at the forefront of their field, helped European patients received the best therapy and European universities and medical centres now offer the best therapies. It has also provided a boost for the industry and to economies.

“It’s not that the more time you spend in the approval cycle, the better things are going to be. Rather, it may simply mean the more expertise you bring to the entire process, the better things are likely to turn out,” Sagon said.

Background

Medical devices are defined broadly and can include anything from sticking plasters to contact lenses, pregnancy tests, dental filling materials, X-ray machines, pacemakers, breast implants, hip replacements and HIV blood tests.

Following a huge health scandal involving faulty breast implants sold around Europe, the European Commission published proposals in late 2012 for a new regulatory regime for medical devices. The Parliament is  currently debating the shape of new regulation.

The new regulations are scheduled for adoption later in 2013.

>> Read our LinksDossier: Medical Devices: A new regulatory landscape

Timeline

  • 22 Oct.: The Parliament’s Environment, Public Health and Food Safety (ENVI) Committee votes to adopt its final report on the two proposed medical devices regulations (Roth-Behrendt report).
  • Nov. 2013: Parliament will vote to accept or reject the report in a plenary session.

Further Reading

European Commission

European Parliament

Organisations

European Consumers' Organisation (BEUC): Medical devices

Industry