America’s baby boomer generation is aging. In their 50s and 60s, the boomers are starting to need better health services and more medical devices. The aging population is only one of the reasons that EvaluateMedTech reports that the medical device industry is projected to grow 5.2% every year for the next five years. While this is a great opportunity for medical device companies to grow, many are facing huge hurdles to success. In the latest episode of The Connected Engineer, Michelle Boucher of Tech-Clarity shared some of these challenges and how companies can overcome them.
One issue that medical device companies struggle with is profitability. “That’s not something really unique to medical devices,” Boucher admits. “But medical device companies have some unique circumstances. One in particular is that they’re so focused on compliance and regulations and so much of their resources go into compliance and all that documentation, it takes resources away from the ability to be innovative and focus on quality.” Because of this, companies are missing out on opportunities to become more competitive in the market.
Another concern is time-to-market. Explains Boucher, “The challenge for medical device is that you’ve got these very long regulatory approval cycles. So much time goes into them, that companies are feeling a lot of pressure. They need to recoup their investment. They need to be looking at ways to really eliminate any bottlenecks and improve efficiencies as much as possible. They are going to be facing that long regulatory approval cycle at the end so they want to start seeing a return on their investment.”
While maintaining compliance plays a starring role in the struggle for both profitability and time-to-market, the cost of being noncompliant is more deadly for companies. According to McKinsey, non-routine quality events cost the industry $2.5-5 billion every year… and things are just getting worse. According to an FDA recall report, there was a 97% increase in the number of recalls from 2003-2012. “It’s just getting that much harder to develop a quality device and that much harder to be compliant,” says Boucher. “McKinsey found that every year, one company loses 10% of their share value… just due to a single quality event.”
This is something that the FDA has noticed. Its Case for Quality initiative launched in 2012 to combat the medical device manufacturing approach that completely favors regulations over quality. “[This approach] forces companies to focus on documentation rather than innovation,” explains Boucher. “As a result, companies are disincentivized to be innovative.” The Case for Quality initiative focuses on the quality of devices. As a result, companies will be able to bring better devices to market which will provide for better patient outcomes.
So what can medical device manufacturers do?
“Some of the research that McKinsey found shows that just by adopting quality best practices, [organizations] can reduce quality-related costs by 20-30%,” Boucher states. “Then, just by lowering your cost and having a better reputation because of better quality, you can actually increase your profits too. The research is showing that profits will be improved by 3-4%.”
Tune into the complete podcast to discover how your organization can take advantage of these best practices to better comply with the FDA’s Case for Quality initiative.