5 tips for startups seeking regulatory approval
There are benefits for startup medical deviceand drug development companies to court regulators like the U.S. Food and Drug Administration early to ensure strong communication on what's expected and what a comany's product(s) can deliver. But on the other hand,there can be some unforeseen challenges as well. And of course the FDA has been known to change its mind and request more and more data.
This was one of the engaging discussions at the Greater Philadelphia Alliance of Capital and Technologies IMPACT conference convening venture and angel investors and the entrepreneurs with whom they invest.
Among the members of the panel talking about alligning incentives and current challenges facing startups were Jeff Voigt, principal for Medical Device Consultants of Ridgewood; Joseph Capper, the CEO of remote monitoring medical device firm CardioNet(NASDAQ: BEAT); David Hastings, the CFO of pharmaceutical company Incyte (NASDAQ:INCY);and Dr. John Reiss, a partner with Saul Ewing's life science practice. James Datin, executive vice president with Safeguard Scientifics(NYSE: SFE),was the moderator.
Make sure you describe your company's device or drug accurately Years before Capper joined CardioNet as CEO, its tool for diagnosing and monitoring cardiac arrhythmias was classified as a health service, not a medical device. Reimbursement is a big issuefor most companies and they will be pressed to develop products that are substantially better than what's come before. One panelist advises clients to look at the codes, look at the reimbursement. If [their product] is truly substantially different and they can make it that way, so much the better.
Another point on communications with the FDA: although companies need to be passionate about their solutions, the challenge is to back up their claims with data. One panelist likened applying for 510(k) approval toMitt Romney's recent unsuccessfulbid for president in which he had to balance a conservative profile in the primary with a more moderate one after he won his party's nomination. "You have to be careful that what you say in the primary isn't completely different from what you say in the rest of the race," one panelist said.
Timing is everything Although establishing a dialogue with the FDA can be good to ensure their expectations are understood, it's not without some risk. One reason for a company to go to the FDA early is to ensure that they do the necessary studies to prove that label as much as possible to show that their product is substantially different. Reiss advised companies to weigh the decision carefully. "If you go too early and they're not interested, you have have to revive their interest… you have to figure out what the balance is."
What's the value proposition? Voigt encouraged companies toseriously consider thisquestion since the buyer in the future will be more likely to be a provider rather than an insurance company.
Having big partners can help Incyte partnered withNovartis and licensed its myelofibrosis drug Jakavi to treat the rare blood cancer.The drug was recently approved in Europe and by the FDA. Hastings said the deal means it doesn't have to worry about reimbursement issues, because the pharmaceutical company is experienced in global reimbursement.
CPT codes are tough to change The CPT code, set and maintained by the American Medical Association, is used to distinguish medical, surgical and diagnostic procedures and services by physicians, accreditation organizations and payers for administrative, financial and analytical reasons. The application process takes about two years , but once your device is assigned one, it can be tough to change it. It impacts reimbursement and as Capper pointed out: "Changing your CPT code can take longer than getting 510(k) approval."
[Photo by - Damian Gadal]