After four years of negotiation, the European Parliament has published the text of its EU Medical Device Regulation (MDR), setting the stage for sweeping changes across the medical device value chain.
As expected, medtechs will bear the brunt of the costs of complying with the new regulation. To reduce the costs - and execution hazards - associated with implementation, we recommend companies take a risk-based approach to compliance that involves a detailed assessment of the revenue impact, as well as the cost and complexity of remediation. By outlining a thoughtful, well-ordered approach now, medtechs can protect valuable and future revenues while making upgrades to critical business functions.
Resistance is futile
Spurred by safety concerns associated with breast implants and metal-on-metal hip replacements, the regulations come at a time when the medtech industry is under pressure: revenues are contracting, competitors from outside the sector are redefining innovation, and maintaining market share requires investment in new capabilities such as data analytics.
But resistance to MDR isn't really a viable choice. Once the legislation is adopted, an event expected to occur by early 2017, medtechs will have three years to amend a range of activities spanning clinical trials, quality management and commercial activities such as product labelling and design. Products that fail to conform with all aspects of the regulation will lose their CE markings - and thus, the authorisations required to market them.
Simply put, complying with MDR is another stressor for medtechs at an already challenging time, potentially affecting both top- and bottom-line growth. Faced with needing to make significant investments in quality and data management in order to keep products on the market in Europe, some companies may have to forego strategic initiatives such as business development or R&D.
Medtechs will need to invest in upgrades to individual devices as well as broader business practices
It's difficult to estimate just how great the costs associated with MDR implementation will actually be. Medtechs will need to invest in upgrades to individual devices as well as broader business practices. It's clear that regulators will scrutinise the sophisticated so-called Class III devices - for instance, heart valves and joint implants - more closely than simple Class I instruments such as sutures. In the meantime, added requirements mandating that companies collect clinical data to support product performance may necessitate improvements to - or the additional development of - quality management processes across the business.
Thus, just how much medtechs will have to spend to make sure their devices comply with the new regulation will depend on the overall product portfolio mix and the amount of remediation required at both a product and a systems level.
Lucien de Busscher is a partner at EY Belgium and Eithne Lee is executive director at EY UK