The recent DeviceTalks Boston event highlighted many of the challenges facing Medical Device startups. Anyone working in a hardware startup knows that the odds are against you for succeeding. After listening to speakers at DeviceTalks, the challenge of starting a medical device company is even more apparent. Below are my takeaways from DeviceTalks Boston 2017.
Top 3 Challenges for Medical Device Startups
Challenge 1. Funding and Capital Issues
This should be no surprise. Funding is always a major challenge for a startup. According to a survey done by Emergo, half of medical device companies say that they face funding challenges. Not only do you need funds for running your company, but you also need to cover FDA compliance and related costs. On top of that, you need enough capital to cover the dead period between the time you get your FDA clearance until the time you can sell your first commercial units. Some European governments provide financial assistance during this early phase. US companies get no such help. It is an extra long funding road for medical device startups. No wonder the funding session had huge interest and attendance.
Challenge 2. Compliance and Regulatory Issues
Getting FDA clearance for a medical device is a major hurdle that non-regulated hardware companies don't face. The time, expense, and resources needed to obtain the necessary certifications can be an overwhelming barrier to launching a new medical product. It was interesting to hear one of the speakers caution to not just test with the goal of certification. He recommended a more thorough approach. Otherwise, quality issues may come up later that may end up being more costly.
There was optimism expressed that the FDA is listening to past complaints. Hopefully the FDA will simplify processes in the future. The bottom line is that a company must prepare early with the necessary processes and systems in place. This minimizes time during the pre-approval phase and streamlines future regulatory compliance activities.
Challenge 3. Product Development and Quality
Without an innovative and well-made product, the issues of funding and regulatory compliance are moot. Just like any hardware startup, a new medical device company must be able to design, build and launch a new product while managing costs and quality. Many of the sessions talked about innovation. Due to the financial challenges, large device companies fund many early stage startups. This encourages innovation from small companies that may be future acquisition targets.
Once a company comes up with the new product, then part of the challenge is figuring out how best to make it. The DeviceTalks event featured several product development and manufacturing companies that specialize in medical devices, technology, and services. The availability of so many vendors in the Boston area with medical device expertise was impressive.
Companies in a non-regulated industry may be able to launch their first product without a PLM or quality system. Since medical devices companies can't take the risk, they need to have a system of record for product and quality data. Early processes and development partners may change in the future. It's important to chose validated systems that can grow and adapt to future needs.
With a cloud PLM and quality solutions like Propel, a startup company can quickly get a system in place. Propel's cloud PLM is cost effective and customizable. It also provides a platform for collaboration with development and manufacturing partners. The Propel quality solution includes validation scripts and best practices validation methodology to speed the validation process and maintain compliance.
Next Up... California
No doubt, it is hard to start and launch a new medical device company. However, it's encouraging to see the activity level of medical device funding, research, and startups in the Boston area. We look forward to the next DeviceTalks West in December. Orange County, California is another hotbed of life sciences activity.