Manufacturing in the medical devices sector is attracting close scrutiny by regulators as they seek to tighten up oversight to ensure the highest standards of public safety and to promote fair market access for all companies. Fundamental changes are being introduced under the new EU Medical Device Regulation (MDR) which will involve medtech firms adhering to stringent new standards across many critical processes. These include the reclassification of devices including legacy products, the reprocessing of single use devices, clinical evaluation and evidence standards, mandatory product liability insurance, labelling and the supply chain, and technical documentation.
At Maetrics we firmly believe that manufacturers who achieve MDR compliance as quickly as possible – rather than waiting until the 2020 deadline draws closer – will reap substantial commercial advantages over their less proactive competitors.
Why is this? Firstly, the requirements encompass the most wide-ranging set of changes to the regulatory landscape since CE Marking was introduced in 1993. Preparatory work, such as obtaining buy-in from the various stakeholders within the organisation and adapting the necessary business processes, will be an in-depth and lengthy process and can not possibly be achieved properly in a last-minute compliance rush. Secondly, the industry is already questioning whether there is sufficient capacity in terms of suitably qualified in-house consultants to guide compliance preparations, and likewise, enough Notified Bodies (NBs) to conduct the audits and certifications within the required timeframes. It has been reported recently that NBs have begun turning down new clients for CE Marking, which indicates the pressure they are already under even before the MDR floodgates are fully open.
In part, outsource providers can plug the in-house gap by providing expert support but it should be emphasised that this resource is also limited and is likely to be seized upon by the compliance first-movers. Even if they have the time to wait for in-house professionals or outsource providers to finish contracts and become available, medtech firms that delay their compliance plans will still find themselves at a severe disadvantage – not least because over-demand tends to push up costs. At the time of writing it is difficult to imagine how the dual challenge of the in-house skills shortage and regulatory under-capacity can be solved in time for the entire medtech industry to achieve compliance by the deadline, even if it is two and a half years away.
Our best estimates put MDR compliance under-capacity in the region of 20% of total market value. The consequences of this are significant. Non-compliant manufacturers whose products are uncertified will simply be unable to service the market and their compliant competitors will step in to pick up the business. It has been acknowledged by large operators in Europe that this loss of market share may never be recovered.
We have formulated a financial model to put figures on the scale of this opportunity – the MDR Market Opportunity Value model (MOV) – and it reveals that $16.5 billion in potential revenues is the prize on offer to fully MDR-compliant manufacturers. If we look at this from the non-compliance perspective, it is also the value of the possible revenue penalty for those that find themselves excluded from the market.
It is clear that medtech firms need to take action sooner rather than later to reap full advantage of the MDR compliance opportunity. What measures can be taken in-house? First and foremost, they must book their certification work in with NBs (as soon as the NBs become MDR-compliant themselves). They should create a comprehensive, practical MDR compliance strategy which involves appointing team members from across the business to take ownership of assessing each necessary process. We would recommend that firms scan their product portfolios for any unnecessary products that could be eliminated before the auditing begins.
In many cases, medtech firms will choose to partner with compliance outsourcing specialists who can provide expert guidance throughout this process, from planning through to implementation and certification. This is especially likely to be the case given the unprecedented extent and complexity of the changes set out by the MDR and the scale of the Market Opportunity Value achievable by compliance pioneers.
By Peter Rose, Managing Director Europe, Maetrics
See full details of Maetrics’ Market Opportunity Value model here