MedTech Europe on Regulatory Readiness, AI, and MedTech Innovation

00:07 I'm joined by Jesús Rueda Rodríguez. He is Director General of Industrial Affairs and Strategy at MedTech Europe. And he works at the European level on regulatory and also strategic topics impacting your industry, our industry. And he's bringing a clear view on policy, innovation, and competitiveness. So welcome on stage. Thank you very much for joining us Jesús.

00:43 Jesús, to start with, you have a very, I would say, very unique vantage point across European MedTech. So when you look at the industry today and we talked a little bit about challenges and needs and trends. What feels fundamentally different compared to a couple of years ago? Yeah. It's interesting how the system is evolving and it's important to look at the industry within the context of healthcare itself. So some of the things that we are seeing

01:13 is the acceleration of some trends. Definitely the adoption of AI is one of them. It was discussed earlier and it's percolating all levels of healthcare, not just the MedTech industry. There is a lot more drive towards solutions rather than simply products. There is a combination of working towards a service rather than just delivering a device. There is a lot more questions from patients that want to be able to manage their own health. So patients are becoming much more active in their own health,

01:43 and they're given the tools to do that. Tools that range from apps to specific devices, monitoring systems that they can use and work with, and so there is a fundamental shift that the industry is seeing based on how healthcare is evolving around us. And, I mean, with that change come also, not only that there are changes coming from the demand side, I would say, but also from the supply side. So do you think that the leaders and innovators in the industry are underestimating that impact of change?

02:16 That's a very broad question because we are an incredibly diverse industry, and I think there are some that are actually on top of that change and creating that change. And there are others that are living through the change so that there's all kinds of things and situations. And that's normal because we live in an ecosystem where there are some really direct innovators that are there making things go forward. And then there are folks, and there are companies, that are there to keep healthcare going.

02:46 So you have the whole spread from the advances in, for example, surgical robotics or neural modulation or things like that, to people that make sure you get a bandage when you need one. So the whole system is changing. But it's also interesting to see how, from the supply side, we are seeing more and more technologies coming online that are creating shifts in paradigm. So it's not just, oh, this is the next stent or this is the next heart valve.

03:18 It's okay, well, actually, we're going to manage your health in a way that perhaps you won't need that stent. Or perhaps you can wait a couple more years for that heart valve. So we're really looking at technologies that are not just curative or therapeutic in the device space, but also about managing health in a more systemic way. I remember we had the same event last year. And I remember there was Professor Una, he was on stage and he presented about that

03:50 regulatory complexity and all of that. And he also made an interesting statement because he said, when you look at the innovation power of European MedTech especially, he said, we need to be careful that we are not falling behind. So what is your view? How do you see? Are we really falling behind? Or do you think we're still in the face of bouncing back or coming back? What's your view? It's an interesting story. I've been working in this industry for over 20 years, and it's been 20 years that we've been falling behind.

04:21 It doesn't quite happen, but it's true that we can't be complacent. This is a situation where there's a lot of changes going on, and falling behind is not an absolute. It's a relative situation. So it's true that right now we see a lot of competition coming from Southeast Asia. We see a lot of changes in health systems around the world that we need to be on top of in order to remain competitive. We see a lot of challenges from places that we didn't normally expect.

04:52 Our supply chains are becoming much more brittle. I mean, just in the last week, our supply chains have fundamentally shifted once again, and we have mechanisms to try to make up for that. But we need to be able to deliver. The other thing that’s very important is that we need to make sure that we retain confidence as one of the small secret sauces of European industry. There is sufficient confidence in the industry that people generally trust it. European MedTech has

05:22 a fairly good reputation, not just in Europe, but around the world. That becomes a competitive advantage. And so does the relative stability of Europe right now. We're in a world that is very unstable. Lots of things are happening in places that are unexpected and dificult to predict. Within that context, Europe as a stable location is actually looking far more interesting towards an investment perspective. Simply because, okay, Europe might be difficult

05:52 and there are problems and the regulations are a mess and all that, but we know it. It is a known problem and a stable problem. The real consequences you're seeing for companies that, you know, with all the challenges that are in the market, disrupted supply chains, the war for talents, the tariffs, all of that. What do you think? What is the real consequence specifically for European MedTech manufacturers? The real consequence is uncertainty.

06:24 It's like, what's going to happen next? Who is going to be the next development? Is it safe to invest or do I just protect what I have? Do I develop or do I protect? Do I risk something or am I more conservative? That is really a challenge. Now we're starting to see shifts in that. And one of the interesting things, looking at it from the policy perspective, is that the profile of MedTech has fundamentally shifted in the last five years. We went from being a sort of interesting industrial group

06:57 that was there in the corner, doing its thing, and just got on with it, to a group that had two big things. One, it was clear that it was a critical system. That was something that Covid taught the world. And the second thing is, it was also clear that it is not a passive system. It is a system that really gets impacted by policy decisions in the regulatory space in the sustainability space in many other spaces. So it is important for policymakers

07:28 to keep things in mind if they want things to move forward. And that's a perfect transition actually. I really like that you started with saying that the biggest challenges are the regulatory landscape. So when we speak with clients, and I think when you have the conversations also between peers, there's often that regulation is perceived as something that is hindering the organizations or that regulations are a barrier.

07:59 And we all went through that transition from, you know, to MDR and to IVDR. And they have been implemented with strong intention, right? To make the products more safe or safer than they've been. What are the most significant unintended consequences you're seeing today? Ah so, the regulations, This is a little bit of my area of specialty since I helped negotiate the first batch, and now we're negotiating the second batch.

08:29 People often see regulations as a problem. But they're also a solution. They're solution to a very specific situation, which is ensuring trust in the sector. Making sure that the products are safe and effective is what regulators would say. But really the underlying value of regulation is saying, okay, we can trust this. A hospital can say, okay, it's CE marked, I know I can use it, I don't have to worry about it, I’ll take it on board and I can use it safely. I don't have to worry about safety. One of the funny things about the regulations is that we have been so good at this, that the problem is no longer at the level of consciousness. It's subconscious.

09:02 People just assume it's safe. They know it's safe. Of course it’s safe. Why wouldn't it be safe? So the problem that the regulation is trying to solve has been solved so long ago. Except for some edge cases that people just ignore it. And so you're left with the problems the regulation creates. As opposed to the solution it delivers. And those problems are very real. And they come in perhaps 2 or 3 flavors. The big ones are, first of all, cost and time to market. The regulation has fundamentally increased both the cost and time to market.

09:35 It's for a long time created a lot of uncertainty about how much effort is needed to bring a product to the market. This is disruptive to large companies, but it's devastating some of the smaller ones, especially if you have a small startup that depends on venture capital and they say, okay, when are you going to get the product to market? How much is it going to cost? And the answers to both those questions are we don't know. Investors run away. I mean, this is not something you want to be working on. So that's one of the big core problems. And it's actually leading to another one, which is the fact that

10:06 the European regulations were the only major system in the world that did not have a path for breakthrough innovations or things like orphan devices. The reason why is interesting is because under the directives, it wasn't needed. It just got through. But when everything got tightened up and made more complex, all of a sudden it becomes necessary. And that's something that the commission is trying to resolve. And the final problem that the regulations have had is the fact that for many manufacturers it has created a situation where they are

10:42 forced to rethink their investment and their deployment process. So if I don't know how long it's going to take for my product to get onto the European market, maybe I should go to the American market instead first of all, to the Japanese market and so on. So it is creating a situation where we see more and more companies saying we're going to opt for launching somewhere else, and then we'll see when, and if, we come back to Europe. Generally speaking, it always comes back to Europe. But it might be one, two, three, five years later,

11:13 which is what we saw ten years ago with the US. People going to the US five years after Europe, because it was so complicated. Now that's flipped. Which puts actually, and I would say, it is a little bit against the promise that we and the European Commission and also all the member states say that the European people should have access to the latest and greatest and use in technology, right? So but let's talk a little bit with MDR and IVDR for a moment. So do you think they delivered on what they wanted to deliver?

11:45 Oh, they know they didn't. That’s why. No, but this is a good thing. This is a good thing. They know they didn't. So they're trying to fix it. Because if they assume they did and say no, everything's fine, don't worry. We did exactly what we meant to. Well, that's not working. Everyone knows it's not working. Okay, by this point, everyone realizes this is a problem that we need to solve. They tried to solve it by giving extra time, extending the timelines. Well, it helped a little, but it wasn't a solution. It was just delaying the problem. And the problem now is clear.

12:15 It's now. It's there. And, in December, the commission published a full proposal on how to fix this. Now, is it perfect? No, but it's definitely much better than what we had before. Because we have learned from the problems that we have. And we have learned of some of the issues that come up. And what's really important is that it's a very good proposal in the sense that it doesn't compromise on patient safety. Patient safety remains paramount. That has to be protected, but it creates certainty. So it sets timelines for certain processes.

12:46 It makes sure that there's transparency on things like costs, and there's transparency on who you get to ask for. If there is a dispute, how do you resolve it? All of these things get explicitly explained, and that makes all of the difference. Hopefully, for a system that then becomes more predictable, perhaps a little bit less expensive, but we'll cross our fingers on that one. And that also allows innovation to go through much faster. They create these new pathways for innovation to go through, and they do a few interesting things that are there as well.

13:17 Like for example, there is a much closer relationship with the Medicines Agency because it is an interesting fact that today in Europe and this comes from the medicine side, 25% to 30% of all new medicines are linked to a device in order to be able to deliver. So more and more, we are seeing this very strong link. And that's something that's very important from a regulatory perspective to make sure that when the medicine is available the devices it relies on are also available.

13:48 So that also maybe means that everyone in the organization should maybe have a different view also on regulation. You made one point, right? They are two sides of the same coin, right? There’s opportunity and it's a challenge. How should they think differently about the regulatory readiness? That's a very difficult question because they already think differently. It's like, I go to three different companies there are three different approaches to this. But you can't not think about regulatory.

14:20 You need to have a pathway through this. And you need to understand that it's going to change and it's going to happen. And start from that point and look at: how is that going to affect my product? How is that going to affect my pipeline? How is that going to affect my investment decisions? And that gives you a baseline on which to discuss and consider where to go forward. One of the other things that the MDR is doing, for example, is linking medical device regulations to AI regulations.

14:53 And creating a single channel for this. It also does it for cybersecurity questions and creates a single channel for this. That has the potential of significantly simplifying things, which need to be simplified. Now, it doesn't mean we will be ahead of the curve across the world necessarily, but it means we will be competitive in this space for sure going forward. I think really that was a necessary step to do because people were a little bit confused about

15:24 how do I treat my medical devices with AI, is it falling under the AI regulation? Are they falling under the cybersecurity regulations? That combination I think that will ease some of the conversation and also maybe fueling the the innovation pipeline a little bit further. Let's look a little bit, Jesús, in the future in 3 to 5 years, what changes or corrections do you realistically expect? And what should companies not wait for?

15:56 Specifically when we look at the regulatory, maybe at the regulations part in Europe. So things that you can expect, you can expect these pathways to go online. So for innovation to be able to go through much faster. You can expect to have an integrated regulatory pathway for AI technologies used in medicine. Definitely that's going to happen. You can expect to see a situation where that link

16:26 between devices and medicines becomes stronger and more pervasive, and gives you an opportunity to build up on that. So don't shy away from those kind of technologies and devices, because you are going to have a regulatory solution for that. However, However that does not mean that all of a sudden regulatory compliance will be easy, simple, and not problematic. It is still going to require resourcing from companies and it's still going to require a considerable investment,

16:56 hopefully a little bit less than now. You will be able to leverage some international agreements and some international benefits. Like some of you might be familiar with MDSAP, which is the single audit program. That will probably be something the commission will be pursuing. So there are going to be other changes that are going to be interesting, but those things, don’t mean you can ignore the regulations at all. So let's look a little bit at the topic of digital transformation,

17:30 because I think you made a very important point because regulatory challenges won't go away and you need to prepare and you need to have the we still will need people that know about that and can also apply it. But also seeing that there are shortages specifically in those skills. So what do you think from a MedTech industry perspective, where does digital really matter today? Digital matters because healthcare is going digital anyways.

18:02 I mean that's the whole thing. You talk about skills. One of the things that we've been discussing very intensively, internally right now is what do you do when you have a vigilance incident that actually stems from a cybersecurity vulnerability? What skillset do you need to investigate that and report on that and interface with authorities on? And when we look at companies that say, well, we don't have any one person that has the full skillset to handle all of those questions.

18:32 I mean, maybe there are a few people like that, but they're extremely rare. So you need to be able to create those interfaces, to be able to respond to the questions that are going to be coming, because they are going to be coming, and to deliver a rapid response to that kind of situation. So clearly, there is a need for skilled workforce because from the point of view of healthcare and MedTech, you've got AI coming in so many different levels.

19:03 We've talked about internal workflows, how AI can help there. It's absolutely true. It's also true for hospitals. Their internal workflows are also being revolutionized by AI in many different ways. And acceptance is up and down. But it is coming. There's no question about that. And it's going to hopefully, unleash the capacity of doctors to be more doctors again and less bureaucratic. So spend more time treating patients and less time filling out forms. And this is the kind of thing that is going to change healthcare, but

19:38 in the actual MedTech space, you're going to see AI drive new technologies that were impossible years ago. We've talked about neuromodulation a little bit. That's the kind of technology that's going to be foundational in AI perspective. Surgical robotics, it's all the same thing. We're going to start to see smart implants that are able to adapt to the physiological condition of the patient in real time. Things like pacemakers or so on that, you know, would have to be reprogramed in the past they can now detect

20:09 and automatically adapt to the actual situation of the patient moment by moment. You're going to start to see a lot more advanced diagnostic systems that rely on AI in a holistic way as well, not just, oh, I have the image, I can enhance the image, which is great, and you have a lot of value in that. But now is like, okay, I have the patient file. And I can assess the patient file, the patient history interactions, etc. and get new insights or get faster conclusions and the results.

20:40 So this is happening across the board. And your last point is actually also closing to what you just said earlier is about the combination of the device space and pharma space. You could leverage that data that you collect from a diagnostic device and maybe also to develop more personalized treatments on the pharmacy side, right? Digital transformation is not only, and we talked you mentioned the manufacturers and then and also the hospitals. What about regulators? When you look into FDA

21:11 they are experimenting with AI and, you know, applying AI on the approval processes. What is your view on that? I actually visited in Amsterdam, the Medicines Agency, a few months ago, a couple of months back, and they had an exhibit I thought was fantastic, and their exhibit was the technical file for a drug. And it was a wall about the size of this wall full of boxes, full of papers. And they're like, see? That's what it used to be. And now it's all digital. And that means we can study it and analyze it in a different way

21:43 as a regulator. So AI creates two different opportunities for regulators. It does the streamlining of the workflow of the way they can go through technical files in more depth, and perhaps spark questions that they might want to ask. So you might get more questions. And when AI systems start to ask questions, it can just go on and on and on sometimes. So careful with that one. Oh, you know what I'm talking about, yeah. The other thing that happens that's also quite interesting is that the AI systems are starting to be deployed as well, in the field of market surveillance.

22:15 To find signals, problems, issues faster than they would otherwise happen. It's an evolving area of application. And it is, as many other AI applications subject to some hallucinations and issues around the corners. But it is something that is coming. It is something that's being developed and deployed. And what's interesting is that in that context, Europe is going to have one secret competitive advantage over the rest of the world if we do it right, which is the European Health Data Space.

22:46 If the European Health Data Space is properly deployed that creates probably what could be the single biggest repository of medical information in the world, which could allow for many different applications, both from the point of research and development of products, simply the monitoring of how performance is happening. It would allow, as well, things like regulators to check how products are performing and if there are any problems. It has huge potential.

23:17 It also has a huge potential of going wrong. So, that’s the promise. But we need to get there. It's not a given that we're going to get there because it's very easy for this to break down into little national silos or, the interfaces, the interoperability, the data compatibility, the informed consent, availability of data, primary versus secondary use of data issues. So we have a chance, an opportunity to really transform healthcare delivery and transform healthcare research.

23:48 Both in MedTech and Pharma and across the board. I mean, this is not just for us. It's for everyone. But we need to be able to make sure that that data is properly bounded, properly used, and also that the patient’s confidentiality and patient safety is protected. I mean, we have to keep the patient at the core of everything we do, otherwise we fail. So, Jesús, maybe to also come a bit to the end, if you would give

24:19 or if you could give one piece of advice to leaders in the MedTech space today. What should they focus now to prepare for what's coming next? I've been thinking about this one a lot. Because it's one of those things that change, there is going to be uncertainty. This is not an era where you can predict what's going to happen. So in that context, you need to have two things. You need to have a North Star.

24:49 You need to know where you want to go to and have that institutionally clear. This is what our goal is going to be. This is what we're striving towards. It could be a set of values. It could be a set of deliverables. But define that and don't let the environment define you. Because that could be a very easy trap to fall in, in a changing environment. But at the same time you have to remain agile because you can't ignore your environment. So you have to be able to move with the environment,

25:19 but know where you're going, have a vision of where things are going to lead you. Because if you don't, at this stage, it becomes very easy to become trapped with the different eddies of influence that are going to go through the system in the next couple of years. Because those are going to be very powerful, and they are going to drive all kinds of changes. Great Jesúis, thank you very much for being with us today. So maybe to sum up. What I take away is, there are maybe three points, right?

25:50 One is of course, so we are actually operating in a very good environment. And Europe has a very strong proposition also for MedTech. And with the changes that are coming specifically to MDR and IVDR, maybe also, we may bounce back in terms of more innovation. And then the third one was also nevertheless regulatory will stay but we are working, you have worked in your organizations with the Commission on making a little bit more easier. But we would need to have the

26:21 people that know what they are doing and they have an understanding on all the different regulations. But with digital tools, we might have not only the potential to improve healthcare and health care delivery, but also how our people work to deliver for the best patient outcome. That's a great summary. Thank you very much Jesús for being here.