5 Things to Invest in Before Prototyping New Medical Devices

Are you solving for the right need? How many clinicians, provider organizations and patients stand to benefit from your idea? Are there competitive devices already on the market (this is an IP issue as well)? If you alone need or want the device, that’s an issue that needs to be identified as early as possible in the process. Innovators should be prepared to invest in market research at the earliest stages – we call this Phase Zero – of medical device design and development.

Who is going to pay for the product? Is there an existing, applicable CMS code? Are you going to have to convince patients to share some of the product’s cost burden? If a product reduces the need for repeat surgeries, for example, it is not of value to many hospitals whose operating rooms are operating at 70 percent of their capacity. A product’s reimbursement or revenue generation pathway will be one of the very first questions prospective investors will ask. Absence of a confident answer will make fundraising for development an uphill battle.

Does another individual or entity already own the intellectual property (patent) for your idea? Or do they own something substantially equivalent? On a global scale, is your idea truly novel and available for patent or IP security? These questions must be answered prior to prototyping or you will certainly waste time and money in the process.

The opportunities and requirements for medical devices vary widely between regulatory pathways. Products following an FDA 510K process typically require a minimum technology development time of 12 months at a cost of $500,000 – $1.5 million from concept through regulatory submission (e.g. – a simple Class II 510k without high-volume manufacturing). This cost does not include your executive team, marketing efforts, rent, or IP prosecution. Products following a de novo pathway have development times ranging from 12 to 24 months (minimum) and a technical development cost of $1,000,000 – $5,000,000 to get the product from concept through regulatory submission including preclinical and potential clinical work. Data requirements from preclinical study are the primary reason for doubling time to submission compared to a basic 510K. For high risk or novel products, the PMA pathway can require four years or more and $2 million to $15 million to generate regulatory data supporting the IDE (investigational device exemption) controlled clinical trial.

Early confidence in your regulatory pathway and reimbursement strategy paints a realistic picture of the product’s landscape, time, and resources the team needs to achieve marketing approval. A product’s regulatory strategy impacts the entire project.

Is it your intention or belief that the product will be the first “child” in a new company’s portfolio? Do you want to exit relatively early by licensing the technology to an established company? Do you intend to take the product to FDA approval then sell it to a larger entity or ‘strategic’ like a large publicly traded medical device company? Answers to these questions precede prototyping in a capital efficient development process in which de-risking future investors or acquirers is paramount.