By Shawn M. Schmitt
Communications Specialist, Enzyme
When longtime MedTech industry expert Elisabeth George learned in recent years that a medical device manufacturer was using DEHP in products bound for the US market, she immediately knew that someone dropped the proverbial regulatory ball. DEHP – di-(2-ethylhexyl) phthalate – is a potentially cancer-causing chemical, the use of which was restricted in the US long ago.
The manufacturer “knew about DEHP, but also had no idea that in the US 20 years ago, it became mandatory that companies reduce the amount of DEHP they have in their product,” said George, who is President of her own Florida-based consulting firm. “That problem came down to a lack of regulatory knowledge. Someone in that company’s regulatory group was not on top of the ball to know that DEHP was not supposed to be used in products.”
But she knew something else, too – that the manufacturer would probably point the finger of blame at its quality assurance (QA) activities and fail to also recognize regulatory’s role in the muck-up. (Related: “The Cost of Poor Regulatory: An ‘Invisible Expense’ for MedTech?” – Enzyme, Sept. 24, 2024.)
“What happens is, a company will look at that problem as the Cost of Poor Quality because it will say, ‘The supplier didn’t tell us it uses DEHP,’ or ‘Oh, somebody didn’t conduct adequate verification or validation activities,’” George said.
Put simply, the Cost of Poor Quality is what a manufacturer pays when it makes subpar products and/or operates a problematic quality system. Meanwhile, the Cost of Poor Regulatory is how much a MedTech manufacturer could pay in lost sales, employee time, and company reputation if its regulatory affairs (RA) department makes mistakes and/or troublesome decisions.
“In my mind, that company’s DEHP problem could also be a Cost of Poor Regulatory because somebody likely didn’t monitor DEHP rules and realize the speed at which that material had to change or be reduced, or they didn’t know that a particular country had already banned it,” she said. “Or maybe the manufacturer made a ‘Letter to File’ decision that should have been a full-blown submission to the FDA [US Food and Drug Administration] instead, which would have probably forced the company to do more regulatory verification and validation.”
A Letter to File is a document attached to a product’s regulatory profile. Such a letter is not necessarily reviewed and approved by the FDA and is used when a manufacturer plans to modify or change an already-cleared 510(k) medical device.
“So, that’s kind of where people struggle with, ‘How do I differentiate what is the Cost of Poor Quality versus what is the Cost of Poor Regulatory?” George added.
Regulatory Hurdles for MedTech Start-Ups
Jared Seehafer, CEO of Enzyme, a maker of quality management system (QMS) software, said there are various ways that medical device manufacturers – particularly start-ups – can find themselves in hot water when it comes to the Cost of Poor Regulatory, including not hiring skilled consultants or having a problematic early-stage team in place making key regulatory decisions.
“That’s a very, very common failure mode, particularly if the founders of the start-up or its early executive team don’t have a domain competence in regulatory. The more honest ones say, ‘I’m good at this. I’m not good at that.’ But my experience is that most just want the business. So they’ll say, ‘Everyone can do everything,’ and that’s ludicrous,” Seehafer said. “I’ve seen a lot of early-stage companies fall down when it comes to poor regulatory because they picked the wrong consultant for them at that point in time, and that can lead to all kinds of potential downstream problems.”
For example, “a bad consultant can lead you down a path of, ‘I know what you need to do for your performance testing. You don’t need to talk to the FDA,’ when it actually would be advisable for you to do a Pre-Submission in order to get that all-important product-development feedback from the agency,” he explained. “Or you might waste time putting together a Pre-Sub when you really don’t need to, and instead you just need to concentrate on performing product testing and trials.”
MedTech manufacturers can slash their risk of poor regulatory by using digital solutions like QMS software to enhance quality systems and meet the requirements of regulators, Seehafer said. Deploying a software solution like those Enzyme makes takes a “huge, huge weight off of your shoulders when it’s time to prep a regulatory submission,” he added.
Meanwhile, another Cost of Poor Regulatory landmine that a start-up can run into headfirst is not fully understanding the practice of medicine or medical device classification in a particular country. Those types of mistakes can result in a product being improperly submitted to regulatory agencies and not receiving approval in a timely fashion as a result, consultant George said.
Such landmines, she said, can also be linked to failed product reimbursement strategies. “A specific example of that is, in the CT [computed tomography] product world a number of years ago, a manufacturer made a great new design, and the firm did great medical device regulatory work and adequately completed all of its submissions. The final product arrived, and everybody was so excited. But then when the company tried to sell the device to doctors, they wouldn’t buy it.
“That’s because the manufacturer didn’t do a proper reimbursement strategy, which is also a regulatory activity,” George said. “The doctors said, ‘This device is cool. It’s neat. But I can’t get reimbursed if I use it. Why would I use a device that is going to cost more if I’m not going to get paid for it?’ That right there is the Cost of Poor Regulatory.”
Don’t Talk to the C-Suite About Money
Another regulatory pothole for companies to navigate is that, when strapped for cash, manufacturers have been known to slash the RA budget before taking money away from QA “because quality has a direct link to costs,” said Theresa Poole, Director of Regulatory Affairs for 4DMedical, a maker of lung and heart imaging devices.
Poole doesn’t necessarily recommend that RA meet with the company’s C-suite to discuss how much money it can cost when poor regulatory is afoot. Rather, she says RA would do best by explaining to executives how regulatory can help the company meet its objectives.
“Say to the C-suite: ‘This is how we can be flexible with you. This is how we can get you what you want. And you’re going to have to listen, and you’re going to have to decide on these choices I’m giving you, and there are going to be different levels of business risk involved in what I’m telling you – but you have choices,” Poole said. “One of the biggest things that so many RA people get wrong is, they’ll say, ‘C-suite, you must do this because it’s a law.’ It’s a snoozer to put it that way.
“Rather, if you say, ‘If you are willing to sell this product with these features and this way in this country, I can get you into the country six months earlier,” she noted. “Now that’s a big help.”
