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The Perfect Storm for Medical Device and In Vitro Diagnostics Companies in Europe

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This blog was authored by Fiona Maini, global compliance and strategy principal at Medidata, with input from an executive at a start-up in vitro diagnostics company. Fiona focuses on the evaluation of relevant regulatory changes coupled with the regulatory aspects of technological advancements and geo-political dynamics impacting the life science and healthcare industries.

To say it hasn’t been an easy year for medical device and in vitro diagnostics (IVD) companies in Europe is an understatement.

First, the industry was already preparing for and implementing the new EU medical device and IVD regulations (MDR and IVDR). While companies have been preparing for MDR and IVDR for years, this was the year that the new regulations were to be enforced. These regulations require companies to provide as much information and data on their products as drug trials. This will lead to many medical devices and IVD products to be taken off the market as companies might not have the resources to run the clinical trials required to produce the data. 

IVD devices are categorised as medical devices, but it’s important to note that IVD devices are clinical tests done on samples (like blood or tissue) taken from the human body. These devices tend to involve diagnostic products which are reagents, instruments and systems for the diagnosis and measurement of diseases or conditions. Diagnostic activities are performed outside of the human body (like a COVID-19 test, MRI scan or pregnancy test). IVDs can determine the disease state with a view to cure, mitigate, treat or prevent a condition. 

Second, the industry got hit by COVID. This impacted pretty much every company in the industry. Some were able to mitigate challenges with the use of technology and virtual trials, but even so, there were months where we saw trials halted and planned studies unable to start across the globe. Additionally, many medical device trials require in-person visits if the device is on-site or if the device needs to be implanted (like a cardiac pacemaker).

Third, and even though this was a long time coming, the industry got hit by Brexit. This has impacted UK companies and their operations in Europe, as well as any European countries with operations in the UK. And what’s tougher is the continuous uncertainty around what Brexit will truly mean for the industry in the near and long term.

While many companies in the medical device and IVD sectors could probably handle these issues in isolation, the trifecta of issues has created a ‘Perfect Storm’ environment for these companies to operate through.

We spoke to a company in the IVD space and got their insights on the current environment and how they are managing. The company is a startup, a university spin-out, based in Europe and working in molecular diagnostics. 

How has the IVD landscape evolved?
So initially there were very few regulations on these products. A decade ago, it was relatively straightforward. There were a few connections to something slightly biological but because the products weren’t actually connected to anybody, the regulations were fairly loose.

That’s now been tightened up with the new IVD regulation to the extent where the product is almost treated like a medical device - the reporting structures, the data you have to generate, etc. Before, 15% of IVD devices had to go through notified bodies and now it’s 85%. So, there’s a massive shift in the amount of data, and the amount of external input and oversight you have on your data. There’s a lot more procedures in place for companies to now get these devices on the market. 

How will this new regulation impact the IVD sector?
All companies have to adhere to this new regulation, even long-standing companies that have had products on the market for decades. So, for example, if you have a blood test machine that’s been working fine for 20 years, you will have to put it through the IVD regulation. You will have to prove that you have designed it correctly, that you’ve maintained it, and that you’ve got all the data. And if it’s 20 years old, you don’t have this data. 

So, products will be taken off the market in Europe. We know that for a fact. And I think, now, a startup will not be able to get a product on the market in the EU.

How does Brexit impact companies in the UK and in the EU? Is the UK’s Medicines and Healthcare Regulatory Agency (MHRA) enforcing these new EU regulations as well?
This is where it gets even more complicated. The MHRA have said they’re not adopting these new regulations, and they’re not in favour of the MDR and IVDR. We don’t know what they’re going to implement so there’s a level of uncertainty about the UK market as well. That will add another level of work if we decide to sell in the UK.

As stated by the MHRA, “The provisions contained within the EU MDR and EU IVDR will not be transposed into law in Great Britain and will not be implemented in Great Britain. We are committed to improving the standards and scrutiny of medical devices that reach UK patients. This will be enabled through the powers created through the Medicines and Medical Devices Bill. We are developing a robust, world-leading regulatory regime for medical devices that prioritises patient safety. We will take into consideration international standards and global harmonisation in the development of our future system.”

Were these new regulations necessary to put in place?
The reason they were put in place for devices was because of the unfortunate incidents with breast implants and hip replacements. So, you can entirely understand why it’s been tightened up - to stop events like this from happening.

But I think the impact on IVD companies is much bigger, because they’ve started from a much lower point and less need for oversight, whereas devices have still had a fair bit of oversight. I’m not sure this regulation is necessary for IVD devices. It’s a big jump. There could have been a lighter version for IVD products, since they were starting at such a lower regulatory barrier to begin with.

How have companies mitigated these challenges and some of the impact?
We probably could have coped with one of the things, but with COVID, Brexit and IVDR it’s been very difficult. We were planning for IVDR - we knew it was going to be tough. COVID then impacted the lead times of the notified bodies. It takes forever to get anything done, even a fairly straightforward step, such as certification ISO 13485 approval. How do you cope with these delays as a startup? You submit your file to the notified body and then they tell you they’ll review it in 18 months. You can’t sell any product, so what do you do?

As a European company, how does Brexit impact you?
The problem with Brexit for us was the uncertainty leading up to it and there’s still uncertainty about the regulations. We’re looking to manufacture in the UK but one of the difficulties that we’re still grappling with is the supply chain. If we make it in the UK and sell into Europe, what are the tax implications? Do we shift our manufacturing into Europe and uproot all the pre-production work that we’ve already started? The uncertainty with Brexit is a problem because we don’t know the answers to these questions. 

What could regulators and notified bodies be doing to help medical device and IVD companies through this?
The notified bodies are also facing a massive challenge. About three or four years ago they were recruiting like crazy because they knew these regulations were coming into place. And then when COVID happened, everyone started working remotely, with all the inefficiencies that that brings. Before COVID, when we were still under the old regulation (or directive), there were 117 notified bodies in Europe and 15% of the IVD market would have to go through these bodies. There are now four notified bodies accredited to assess IVD devices and 85% of the IVD market now have to go through these bodies. That’s a bit of a problem.

Notified bodies have to be approved to be able to assess MDR and IVDR applications. That process takes some time, and they need to train more staff. It takes years to get accredited. Even some of the bigger notified bodies couldn’t get the IVDR and MDR accreditation and others have just pulled out, saying they won’t assess medical devices and IVD products anymore. 

What does the future look like for the IVD sector once they’ve weathered this ‘Perfect Storm’?
I think the IVD startup industry in Europe will be massively affected. I think there will be a large number of buyouts. The big companies know that the startups will realise it’s their only exit. 

A large number of devices will no longer be available on the market. Which is scary in itself. A perfectly good set of equipment in a hospital that’s been used for years will be decommissioned, impacting hospital workers and patients. I’m not sure hospitals, and even the regulators, realise this.

It will be interesting to see what happens in the UK, given they’re not implementing the new regulations. There will be quite a disparity between what you have to do in Europe and what you have to do in the UK to release a product. It might be that the UK becomes a good development ground if they have lighter regulations in place to get a product launched.

Eventually, it will be okay, but unfortunately all these changes and challenges are converging and happening at once. 

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As the industry has always done, we will get through these uncharted waters and await the calm after the storm. 

For medical device companies looking to bring products to market faster and comply with changing regulations, Medidata provides unparalleled technology, solutions and expertise that optimize the process of developing new products for patients, and help position them for regulatory and commercial success.

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