February 4, 2016

Overcoming Barriers to Innovation

2015-MedDev-Report-Download-NowIn his final State of the Union Address, President Obama asked, “How do we reignite that spirit of innovation to meet our biggest challenges?” We asked a similar question when we surveyed the medical device industry for the 2015 State of Medical Device Development report: “In your opinion, what needs to occur to foster more innovation in the medical device industry?” We also asked respondents to name the biggest impediment to innovation. For the latter, more than half of those surveyed blamed external factors, such as FDA and international standards, the excessive length of time it takes for product approvals, and the Medical Device Excise Tax’s impact on revenue. They also identified internal barriers, such as insufficient funding, a scarcity of resources, risk-adverse managers, and a lack of integrated development tools. So what ideas did respondents have for overcoming these barriers and reigniting innovation in the industry? Here’s what they said.

Reduce the Regulatory Burden

More than a third said streamlining industry regulations would foster medical device innovation. Many feel the FDA and other regulatory agencies have created confusing, vaguely worded guidelines that are interpreted differently by each auditor. This creates a constantly shifting landscape that is difficult for medical device manufacturers to navigate successfully. This regulatory burden stifles innovation by making companies hesitant to improve products, production methods, and development processes. Tools and processes already in place may not work well, but have been deemed compliant. New methods and tools may help companies solve their business problems, but will they pass regulatory muster? The way current guidelines are written, it can be difficult to tell. If regulations are clear about what is and is not allowed, companies will find it easier to implement process and technology improvements. The time and effort saved after such enhancements will give medical device firms the room to innovate.

Find the Funding

Several internal barriers identified in the report centered around better technology and tools, and better resources and talent. It seems obvious that having the right people and tools can increase the drive and ability to innovate, so what’s preventing companies from acquiring them? In a word, money. The need for more funding was second largest impediment to innovation. A few respondents called for large pharmaceutical and medical device companies to boost innovation by helping fund smaller start-up companies. Most, however, singled out the repeal of the Medical Device Excise Tax. The good news is, that tax was suspended at the beginning of 2016, resulting in a five billion dollar windfall for the industry.

Tear Down the Internal Barriers

But if funding was the second biggest barrier, what was the first? Respondents told us the need for better methods and processes was the biggest internal impediment to innovation. This is supported by other report findings—namely, that more companies are adopting Agile or hybrid Agile development methods, and are moving away from document-centric processes to focus more on tracking work at the artifact level. [caption id="attachment_18184" align="aligncenter" width="726"]agile adoptionAgile adoption grew by 4% over last year, and hybrid Agile grew by 11%. (SOURCE: 2015 State of Medical Device Development report)[/caption] As medical device companies become more Agile or more artifact-centric, however, they often run into a traceability problem. One solution is to adopt integrated product development tools. These tools make it possible to leverage traceability from beginning to end, linking and integrating risk to requirements to tests to other development items. [caption id="attachment_18181" align="aligncenter" width="729"]artifacts vs. documentsSince 2011, the medical device industry has been steadily moving away from document-centric development processes. (SOURCE: 2015 State of Medical Device Development report)[/caption] Because all of these items are managed together, the tool can easily generate a trace matrix on demand, allowing companies to quickly defend an audit. This ability has the nice side effect of reducing preparation and audit times, which frees up more time to dedicate to innovation.

Make the Right Improvements

Will the suspension of the Medical Device Excise Tax infuse enough cash into the industry to reignite the spark of innovation? Maybe. With the five billion dollar windfall, medical device companies have extra room in their budgets for better tools, technology, resources, and talent. If they spend wisely, they’ll be better positioned to adopt methods and processes that are more conducive to innovation.