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What is a regulatory strategy? And for that matter, what do people sometimes think is a regulatory strategy but isn’t? Those are the questions that today’s guest, Mike Drues, discusses as he begins his conversation with host John Speer, founder of Greenlight Guru.
Mike is President of Vascular Sciences, an education, training, and consulting company that offers many services to medical device, pharmaceutical, and biotechnology companies. Listen to the episode to learn how Mike thinks about competitive regulatory strategy, delays in complying with regulation, and reimbursement and regulatory strategy.
What regulatory strategy is and what it isn’t
Why a good regulatory strategy is so important
What competitive regulatory strategy is
The mistake of focusing on only one company
How the EU MDR is affecting regulatory strategy
What causes delays in complying with regulations
The industry record on post-market surveillance
Reimbursement and regulatory strategy
“Let’s not forget my old friend, competitive regulatory strategy.”
“It’s never too soon, in my opinion, to start thinking about regulatory strategy.”
“As a general rule, we have done an abysmal job on post-market surveillance across the board.”
“I consider this whole thing to be a poker game, in every sense of the word.”
Announcer: Welcome to the Global Medical Device Podcast, where today's brightest minds in the medical device industry go to get their most useful and actionable insider knowledge direct from some of the world's leading medical device experts and companies.
Jon Speer: Hello and welcome to the Global Medical Device Podcast. This is the founder at Greenlight Guru, Jon Speer. And joining me is familiar face and voice on the Global Medical Device Podcast, Mike Drues. Mike is the President of Vascular Sciences. So Mike, welcome back.
Mike Drues: Thank you, Jon. I always a pleasure to speak with you and your audience.
Jon Speer: For those listening, Mike and I always try to figure out what topics are we going to talk about next? And we always try to find things that I think are, well, sometimes relevant and timely, but other times we try to choose topics that are somewhat evergreen. And I think the topic today is more one of those evergreen type topics. I think this will be applicable today, but also a few months from now and probably even several years into the future. So anyway, I just thought we'd dive in, and the topic is talking about designing an international regulatory strategy and why so many people and companies seem to get it wrong. So of course, if you've listened to any of our episodes before, you know that Mike is a regulatory expert. So Mike, a great place to start. What is regulatory strategy?
Mike Drues: Indeed, Jon, that is a great place to start. And as always, thanks for the opportunity to talk to you and your audience about this, albeit evergreen, but nonetheless, very important topic. And before we get into international regulatory strategy, let's talk about regulatory strategy. And before I tell you what I think regulatory strategy is, Jon, let me tell you what I think it is not. One of my frustrations with a lot of folks when I ask them, when I meet somebody for the first time and I ask them, for example, what's their regulatory strategy? They'll say, " 510( K)," or, " PMA," or, " De Novo," or something like that. That is not a regulatory strategy, that's a pathway to market. So a regulatory strategy, and this is actually the Oxford Dictionary's definition of strategy, which I like, is a plan of action designed to achieve a major goal or objective, a plan of action designed to achieve a major goal or objective. So a 510(K) or a PMA is your objective, but it's not your plan on how you get there, so that's I think what a regulatory strategy is. And just as a reminder, Jon, we did a podcast, maybe we can provide a link to materials along with this podcast, back in 2020 on how to construct an effective regulatory strategy and it's one of my more popular podcasts that people have listened to.
Jon Speer: Yeah, that's a good one.
Mike Drues: So in that, for example, I go into in some detail my regulatory strategy executive summary template, the different sections that are in there, the device description, the classification, and so on and so on. And one of the pieces that are in there is the international regulatory strategy component. And that's one of the reasons why, as we'll talk about today, Jon, I suggested that this might be a good topic. Yeah, it's an evergreen topic as you put it, but it's a good topic to talk about because at least from my customers, Jon, I get a lot of questions about international regulatory strategy. And perhaps even more importantly, I get a lot of questions from some people about international regulatory strategy and from other people, I get no questions about international regulatory strategy because they've never heard of it, they've never thought about it, they've never talked about it before. So these are all the reasons why I think regulatory strategy and then international regulatory strategy I think is important to talk about.
Jon Speer: Yeah. And I like what you're sharing about the pathway. I hope I'm wrong, but I have an assumption that when a lot of people create what they call A Regulatory Strategy, they're looking at where in the world can they achieve the fastest path to market? And that's loaded in a lot of ways, but it's very shortsighted thinking because they're just thinking, " Oh, well, if I go to this part of the world, I could probably get to market in X number of months, but over here, Y number of months, which one gets me there faster?" And then they slap a cover page on it like, " That's my regulatory strategy," and it kind of misses the point a great deal. And so why do you think... well, we'll get into that probably in a moment, but why is regulatory strategy, a good regulatory strategy, and sound principles to crafting that regulatory strategy, why is that so important?
Mike Drues: I think it's important for a lot of reasons, Jon. I think most obviously it's important for planning purposes, for budgeting and timing and all that kind of stuff. Even on the engineering side, it's important early on as a former engineer, Jon, you'd appreciate this, identifying the different testing that you have to do, especially testing that's going to require a lot of lead time. Like for example, biocompatibility testing or usability testing. Certainly clinical trials are going to require a lot of time. So regulatory strategy is important for all those obvious reasons. But there are some less obvious reasons why I think it's important as well. For example, in dealing with either investors, VCs, or Angels, or even if you're working in a larger company and required to present your plan to your senior management to get them to buy in on it so that they will allocate the resources that you can implement your strategy. So it's important for all of those business reasons. One of the things that I get asked to do a lot for my customers, especially small and startup companies that are trying to raise money, is they'll want me to put together a regulatory strategy executive summary so that they can then boil that down into one or two PowerPoint slides that they can put into their pitch deck when they talk to their Angels or VCs, or when they talk to their senior management in their company, to make sure that they present the different options. For example, Jon, if you go to a VC, ask them to give you a check, and they say, " Oh, Jon, you sound like you have a graded device. What's your regulatory strategy?" If you look at them like a deer in the headlights, like you don't know what the heck they're talking about. I don't know about you, Jon, but to me, if I was on the other side of that desk, I wouldn't be so inclined to sign the check. So it's important for a lot of reasons. And then the last reason that I thought I would mention, Jon, this is a tangent that you and I have talked about before. Let's not forget my old friend, competitive regulatory strategy. Competitive regulatory strategy. Not just simply getting your device onto the market here in the United States, or as you mentioned a moment ago, getting it onto the market somewhere else in the world, but doing so in a way that will, at the same time, create a barrier to entry to your competition, to make it more difficult for other people following in your footstep. That's what I call competitive regulatory strategy. And I know, Jon, you and I have talked about this before, and I think we've done some podcasts on this as well, maybe we can provide some links to those podcasts, but I think these are all different reasons why regulatory strategy overall is very important. Is there anything that I'm missing, Jon, that you would add to that list?
Jon Speer: I don't know if it's something you're missing, but just a couple points that stick out to me as you were sharing some insights. The first is, I think, the timing in some respects. I think a lot of folks, they get stuck in that pathway approach. Like, " Oh, we're going to be a 510( K), a De Novo, or in the EU, we're going to be Class IIa," or whatever the case may be. They're so stuck on that pathway approach, that's what they focus on early on or earlier on in development. And I've seen it happen many times where the development, it's in the thick of it and they're getting into the verification or validation or some testing or animal testing, whatever the case may be, and they sort of revisit the regulatory strategy and things had diverged or the regulatory person wasn't connected to the project. And now it's like the regulatory person's like, " Oh, Jon, you need to do this, this, and this, because we've got to address these needs." And discovering those things later in a project, it's going to cause delays, it's going to increase cost, it's going to ultimately affect your go- to- market strategy as well. So I think the thing that I pick up on this is it's important to establish that regulatory strategy on the, I would say, very front end. I realize you might have to... there's a little bit of chicken and egg scenario here, but very, very early on. And to your point, I mean, I think every medical device being developed has some investor or stakeholder. And now, granted, if you're in a company, you've got to get resources committed. But if you're a startup, you're probably at some point in time going to be looking for some sort of funding to support that. And I think the regulatory strategy, a well thought- out one, a holistic one, is going to show to those potential investors that you've got your act together. Because regulatory is a gate to getting to market for sure, and if you haven't thought about all the what- ifs and the different scenarios, you're going to have a hard time raising those funds.
Mike Drues: And I think, Jon, you bring up another interesting point in terms of when should you begin to think about your regulatory strategy or indeed your international regulatory strategy? First of all, it's just like other things, it's never too soon, in my opinion, to start thinking about your regulatory strategy. But more importantly, you brought up that it should not be a static document. In other words, you should not create your regulatory strategy once and then kind of stick it in a file cabinet and never touch it again. It should be very much like your risk management plan, your quality management system, all the different documentation that you and I have talked about over the years. You should be constantly revisiting it, constantly updating it, and document the fact that you've updated. Here's a little suggestion on the international side, Jon, for our audience, maybe periodically, depending on the area of technology that you're working in, maybe once a quarter you revisit your regulatory strategy plan and see if anything has changed, specifically maybe some of the regulatory requirements in different parts of the world may have changed. The EU, for example, is undergoing a lot of changes, although as we'll talk about, Jon, I'm reminded of the French philosopher that said, " The more things change, the more they remain the same." But nonetheless, these should be dynamic documents. It's not the kind of thing that you just create one time and then you never touch it again. I think that would be a mistake.
Jon Speer: Yeah, I agree. And not to get too much on a tangent, but one of the design and development plan or project plan or whatever terminology you want to use, to me, a project plan needs to be, well, I suppose these could be separate things, separate documents per se, but to me, a project plan should be cross- functional, holistic and think about all the different areas, not just the engineering perspective, how you going to manufacture, what is your strategy there, regulatory as we've talked about and so on and so forth. But absolutely, I think a lot of people think, " Oh, a plan is a moment in time thing. I do it once and then I don't ever touch it again." But every project I've ever worked on, I think this is a true statement, has had something change somewhere along the way. And in fact, usually multiple things change. And anytime something changes, you have to revisit your plan, you might have to revamp that something. At the very least, you need to review it and make sure that those changes didn't impact the rest of your strategy.
Mike Drues: And I think you and I, Jon, are sort of paraphrasing what one of the great boxers, I think it was maybe Muhammad Ali, or I could be wrong, who famously said, " Everybody has a plan until they get punched in the face." So basically what that means is you create a plan, but then you have to adopt that plan, you have to modify that plan as you continue. Or at the very least, you have to revisit that plan and see, " Does this plan still make sense? Do we need make any changes?"
Jon Speer: Absolutely. So we've talked a little bit about international regulatory strategy. I mean, is there a difference between regulatory strategy and international regulatory strategy?
Mike Drues: Yeah, great question, Jon. So thus far we've been primarily talking about regulatory strategy in general. So now let's dig into the topic of today's discussion, which is specifically international regulatory strategy. So international regulatory strategy to me, Jon, and this is just my Mike Drues definition, it's not like there's any standard definitions of these things, but it's nothing more than sort of a global version of the regulatory strategy principles that we've been talking about. In other words, it doesn't just focus on the United States or any one place in the world, it focuses on the entire world. And why is this such an important thing, Jon? Very simple. Because a lot of companies, I see this happen so many times, including to some of the largest medical device companies on earth, and when I see it happen to them, I just laugh because it's such a amateur mistake, they can easily avoid it. They bring their device onto the market in one place in the world, and then they move on to place number two. And they realize that place number two wants a piece of information that place number one didn't want. And so now they have to do testing over again. In some cases they have to do a whole clinical trial all over again. I don't know about you, Jon, but I hear ka- ching, ka- ching, ka- ching, and that's such a amateur mistake. So the question is, " How do we mitigate or ideally avoid that? Very simple, develop your international regulatory strategy. What I mean by that is identify the first three or four places in the world that you want to bring your device onto the market. Please don't tell me that you want to bring your device onto the market on the entire globe because that just ain't going to happen at one time. But identifying the first three or four, it could be US, EU, Japan, Canada, whatever it is, the first three or four. And then identify or sort of pool their regulatory requirements. In other words, come up with what I call the lowest common denominator so that when you do your testing, for example, whether it's benchtop or clinical or what have you, you will have all of the information necessary for all the different places in the world. And you won't have that mistake of realizing that when you move on to place number two or number three or number four, and they want that one piece of information that the others want, now you're going like, " Oh, you know what? Now we have to stamp around like a bunch of chickens with our heads cut off." Ka- ching, ka- ching, ka- ching. And the last piece of general advice that I would give, Jon, and then I would love to hear your thoughts on this, and it's not going to be any surprise to you or to the audience that's listened to us before, is communicate with the regulatory authorities in advance in these different places. For example, here in the United States, consider doing a pre- submission meeting or a pre- sub before, or at least as early in the process as you can to make sure that A, you've identified all of the things that you need to do, and B, the regulatory agency, whether it's FDA or Health Canada or HSA in Singapore or whatever it is, they see it the same way. Because one of the most common reasons why submissions are rejected, whether it's here in the US or anywhere else, is because the company does a certain number of tests and they submit it to the agency and the agency throws it back to them and says, " Well, we want to see this one or two additional tests."
Jon Speer: Right, exactly.
Mike Drues: Once again, Jon, I just laugh when this happens because it's such an elementary school mistake, it can be greatly mitigated, if not completely avoided, by following some of these common sensical ideas that you and I are talking about, not just today, but in our conversations in the past. This is not rocket science. Does that make sense, Jon?
Jon Speer: Yeah. Let me share a short story to illustrate some of the points that Mike is talking about. So quite a few years ago, I was doing some work for a company and helping them get products to market. And I joined in the midstream of development of their first... or actually, more toward the latter part of development for their device. And they were focused just on that US. I think their product, if memory serves, is going to be a 510( K) submission probably. I mean, it is the workhorse of regulatory app submissions in the US. There was never any talk about other markets, which sometimes that's the case, companies are just like, " No, we'll just focus on the US market." But I started asking question like, " Do you have interest in the EU?" And they're like, " Oh yeah, we do." I'm like, " Okay, well, how are you addressing that?" And like, " Well, we'll get to that project after we launched the US device." Just was confusing to me. I'm like, " That doesn't make any sense." They're like, " Oh, well, we'll deal with that later. We don't have time to deal with that." And then stayed with them through that project, getting 510( K) clearance. And we started to dive into the European project, which again, I'm still scratching my head. And there was several cases where the classification was slightly different for their product in the EU, and so it required different things that the US market didn't require. And I think they were going into it, they were making these assumptions like, " It's going to be the same stuff more or less. We just change a label or make our directions for use in 12 languages," or whatever the case may be. But it was way more complicated than that. And to your point, cha- ching, cha- ching, cha- ching. Not that they would've got it for free had they thought about it at the beginning, but it would've been way less expensive because essentially they ended up having to create pretty much a variant product in order to satisfy the needs of Europe. They pretty much had to go back and redo a whole project all over again. And that's just crazy, it's just crazy.
Mike Drues: I think that's an excellent example, Jon. Thank you for sharing it. I've seen it myself many times as well, where a company will focus on one place, for example, the United States, and then they don't even consider the EU or anywhere else in the world until after the US. As we've talked about, I think that's a real mistake. A similar example that I would share as I think about it, is I have some customers that I've worked with in the past where they will have one person or one regulatory consultant manage their US regulatory strategy, and another one manage their EU regulatory strategy.
Jon Speer: That's correct.
Mike Drues: And in my opinion, Jon, that's a huge mistake as well, because the right hand doesn't know what the left hand is doing. And so in those cases, I basically, because, you know me, Jon, I'm a pretty straight shooter, I say to the customer, " Look, that's not a good way to do this, and here are the reasons why. You have a decision. Either we do this holistically and if you want me to work on your US strategy and somebody else on the EU, that's fine, but I would want communication."
Jon Speer: Absolutely.
Mike Drues: Or find yourself a new regulatory consultant. Because to me, that's just asking a surgeon to perform surgery with one hand tied behind his or her back and that's just not a way that I want to do business. So I think both examples that we just provided are good illustrations to our audience of not just what not to do, but more importantly, why are these things not such a good idea.
Jon Speer: Yeah. Touching on the international side of things, let's talk a little bit about the EU and specifically, hopefully this is not news to anybody listening, but EU MDR is still, I think I put it in the category of new. It's not brand new, but it's newer- ish I guess. But I know that a lot of folks leading up to the effective date of the MDR, some companies were completely pulling out of the European market and all these sorts of things. I'm curious from your context, how is this new MDR impacting international regulatory strategy?
Mike Drues: Good question, Jon. On one hand, from sort of a pragmatic perspective, it is having an impact. And what I mean by pragmatic, basically the changes that are going into effect in the EU, in my opinion, are not substantive changes. On the contrary, they're all trivial changes in paperwork and processes and so on. So on the pragmatic side, it is causing delays because of the new paperwork, because of the delays with the notified bodies. As one of my friends at one of the notified bodies likes to say, " These new regulations going into effect in the EU is the greatest source of job security for the whole notified body system that's ever come along," because these notified bodies, quite frankly, have more business that they can deal with. So all of that is impacting international regulatory strategy. And you need to build into your timelines, your Gantt charts, whatever it is, the appropriate time necessary to incorporate those changes. But much more important to me, Jon, nevermind as a regulatory consultant but as a professional biomedical engineer, there's very, very little, if anything, that has changed in the regulation in terms of what I would do with the testing of my device, for example, that I wouldn't have done or I've done any differently a few years ago. And so from that perspective, I would argue that these new regulations, and again, I put that word new in air quotes, really is having very little or probably no impact at all when it comes to international regulatory strategy. So again, I don't want to be misunderstood here. I'm purposely trying to separate these into two buckets. One is what I call the pragmatic side, the paperwork, the forms, the processes. Okay, fine. No, that just keeps the bureaucrats happy. That's just a bunch of bean counters having to justify their job descriptions. But more importantly, from an engineering perspective or from a biological perspective, it's really not having an impact. And as an aside comment, Jon, and this is probably not going to make some people in our industry very happy, but I think quite frankly it's embarrassing, if not shameful, that we as an industry keep asking for delays and more time to implement these things when they are largely administrative and nothing to do with substance. At the end of the day, and I've said this publicly many times, if these new changes that are going into effect in the EU, if they don't ultimately lead in 5 or 10 or 25 years from now to safer and more effective medical devices, then isn't this just simply a colossal waste of time and money? And again, I hate to be so direct, Jon, but I'm getting older, so I call them as I see them. But anyway, those are sort of my thoughts, especially how it relates to international regulatory strategy. Jon, what would you add to the discussion?
Jon Speer: Well, I tend to agree with you. I think these requests for delays or extensions and what have you, at least from my point of observation, is usually related to the requester procrastinating. Because regulations change at a glacial pace, they don't snap their fingers and change from one day to the next. That is, I can't think of any examples in our industry where a regulation was one thing one day and then somebody decided the very next day it's going to be something different. There's always a transition period to be able to migrate. Now, I will give you though that on the EU MDR side of things, there have been some logistical challenges with notified bodies and whatnot, at least a couple years ago, that were concerning and potentially problematic and potentially bottlenecks. But I don't know that we're in that scenario today, so.
Mike Drues: There is one thing that I would add to my statement a moment ago, as my attorney friends like to say, " I reserve the right to change my opinion as I learn more information." So as we talk about this further, Jon, there is one thing that I would like to add in terms of how does the new EU MDR impact international regulatory strategy? And that is... Oh my gosh, now it just went right out of my head.
Jon Speer: Uh- oh, you're getting old.
Mike Drues: I am getting old. Oh yeah, now I remember. I need to write things down. I do have a few notes in front of me, but that was not written down. There's been an ongoing debate, and now most recently, in the last couple of years, a resurgence of this debate, " If I want to bring my medical device onto the market, where in the world do I bring it onto the market first? Here in the United States, in the EU, somewhere else?" Historically, and I would love to hear if you agree, or better, if you disagree, Jon, historically, a lot of people thought, " Bring it onto the market in the EU first," because in many ways it was quicker and easier than here in the United States. Now, with the changes in the EU going into effect, I think a lot of people are sort of rethinking that, and it's not as clear plot or black and white maybe as it was before. But at the end of the day, to me it's very simple. The basic principles of safety and efficacy are exactly the same, regardless of what part of the earth you happen to be standing on at the time. In other words, biocompatibility depends on many, many different things, but one thing that it will never depend on is whether you're in the United States or in France or in Taiwan or someplace like that. That's one thing that a company should consider carefully. And if you want, Jon, maybe we could do a separate podcast discussion sometime on how do you decide which country to go to first? The only reason why I haven't really suggested that is because quite frankly, there's so many people that have been talking about that, but I'm sure you and I could come up with a different spin on it.
Jon Speer: Well, we probably could so we'll put that one in the parking lot to think about later. But I don't have any statement to disagree with you because I've seen the same thing. I mean, I would say... Well, I mean as far as global markets for most medical devices, I mean, both the EU and the US are comparable in population and generally regarded as the two largest market opportunities for most medical technologies. Not all, but most. And so those are almost always on the radar screen. I do agree with you that a few years ago, I think a lot of folks looked at the European model as being, I would think, more finite or more determinant. They have more of a rule- based system to determine product classification. It's just a different spin in my interpretation. But I think with the complications and the logistics, I've seen the same thing happen where a lot of folks are waiting for the dust to settle, so to speak, in the EU, and instead shifting their focus on entering the US market first.
Mike Drues: Yeah, not to get too much into the weeds on this, but in terms of the differences, the new regulation that's going into effect in the EU, and again, I'm putting that word new in air quotes, because it's really debatable what is new, and-
Jon Speer: There's a lot more pages in the MDR than there is MDD, but you're correct.
Mike Drues: Correct. But in my opinion, one of the very few significant changes, and in my opinion, it's a justified change, it's a necessary change in the EU, is an increase in the post- market surveillance requirements.
Jon Speer: Absolutely.
Mike Drues: And to be brutally honest with you, Jon, and again, I'm sure that some of my friends in our industry are not going to be happy with me saying this publicly but I think it's a fair statement, a true statement. We as an industry, and again, I'm being very general here, stereotyping, there are many exceptions, but as a general rule, we have done an abysmal job on post- market surveillance across the board. And I could give you lots and lots of examples, which I won't here, but I'll just illustrate with one. If our industry has done a good job with post- market surveillance in the past, do you think that the post- market surveillance reporting requirements would be increasing, not just in the EU, but in the US and other places? Of course not. So let's just be honest, we haven't done a good job. The statistics, and again, this could be a topic of a different discussion, but the statistics are not they're very impressive, to say the least.
Jon Speer: Yeah, yeah. Sadly, I think that's what drove a lot of the, quote, new MDR is that post- market surveillance. I mean, we won't dive into it today, but folks, you can look into it. There were a couple of device scandals issues that sort of became the straw that broke the camel's back, so to speak. But a lot of it is predicated on the post- market surveillance.
Mike Drues: And to link this back to today's topic of international regulatory strategy, here's another piece of pragmatic advice for our audience, Jon, because I don't want to just be complaining and bashing. I want to make positive suggestions. In terms of developing your international regulatory strategy, be aware of the changes that are going on in different places in the world, like for example, the increase in post- market surveillance requirements in the EU. And make sure that you incorporate into your timelines and your budgets, make sure that you have the resources to implement those changes, to follow those regulations. Because I'm not sure what the statistics are in the EU, Jon, if you know feel free to share, but I can tell you here in the United States, one of the most common reasons why companies get pinged by the FDA with 483's or sometimes even warning letters, is because of post- market surveillance or the lack thereof.
Jon Speer: That's right.
Mike Drues: So look at it this way, if you don't want to deal with the problem now, sooner or later you're going to deal it with later on. It's like if you don't take the time to brush your teeth today, sooner or later you're going to be sitting in the dentist chair and the dentist is going to be drilling cavities and everything else in your mouth. What do they say? " An ounce of prevention is worth a pound of cure," or something like that.
Jon Speer: It's something like that. And I'm not aware of the data, the statistics from EU, and to my knowledge, I don't know that, especially within when you work with notified bodies and auditing organizations from an ISO and an EU perspective, I don't know that they publish that information. So I've always wondered why, again, this is a tangent, we won't dive into this one, but I've always appreciated rather that the FDA is fairly transparent with the data that they're collecting from their inspections and observations and all these sorts of things. And boy, I wish other markets would follow suit on that, but I digress.
Mike Drues: Well, not to use too many cliches in today's discussion, Jon, but what do they say? " Sunshine is the best disinfectant?"
Jon Speer: I haven't heard that one. I kind of like that one. As the sun pokes out outside by window. All right, so getting the last maybe topic or two, maybe compare and contrast a little bit, reimbursement and regulatory strategy, or maybe more importantly, reimbursement strategy. Obviously, depending on where you go in the world, there's an influence or an impact from a regulatory go- to- market point of view. But I think a lot of times people forget about or don't think about or put enough thought into reimbursement. Or in other words, how is somebody going to pay them for their product, so to speak?
Mike Drues: Yeah, good question, Jon. So reimbursement strategy is just as important, in some cases maybe even more important, than regulatory strategy. And just like regulatory strategy we should be thinking about reimbursement strategy as early in the product development process as possible. For a lot of reasons, not the least of which, is I've seen it happen several times now, and I think it's going to happen in the future, where a company gets their device, say, through the FDA and onto the market here in the United States, only to come to find that nobody can benefit from it. Because nobody can use it, because nobody can get paid for it, because CMS doesn't reimburse, or the health insurers, the private insurers don't pay for it. So again, it's a very, very amateur mistake. We have to consider our reimbursement strategy early on. We have to integrate our reimbursement strategy with our regulatory strategy. Jon, we've talked about some of these issues in other discussions before. In some cases, I've had to actually change my regulatory strategy to match my reimbursement strategy. So you really have to take sort of a holistic approach. And similarly, on the international side. I don't claim to be a expert in international reimbursement strategy, absolutely not. However, just like here in the United States, it's important to get somebody on your team as early as possible who has at least a working knowledge of international reimbursement strategy, so that we can be aware of those things now. Kind of like, I know, Jon, you're obviously a big fan of the design controls and one of the most basic tenets of the design controls says, " You want to get all the different people that you need as part of your team from the beginning."
Jon Speer: That's right.
Mike Drues: That's one of the most basic tenets of the design controls. So this is another one of those examples, Jon, where we don't need more regulation. We've already got, as you alluded to a moment ago, thousands and thousands of pages of that. We need more people who understand the intent of that regulation, the spirit of the law, if you will, rather than the letter of the law and applying it here. So those are some of the reasons why I think international reimbursement strategy is important. And I'll give you one quick example, Jon, and then if you want to chime in, feel free, and then we can wrap this up. I've seen it happen, as I said, a number of times where a company gets a device through the FDA and onto the market, but people can't use it because they can't buy it. So I've had now a few devices, 510( K) devices, for example, where I was a hundred percent confident that I could get it onto the market without any clinical data. I had no doubt whatsoever about that. However, I also knew that there was not a snowballs chance here in Southern California that CMS would reimburse for that device without clinical data. So before going to the FDA to present my regulatory strategy, we went to CMS and we presented our reimbursement strategy and we got CMS to buy in, " This is the clinical trial that we're going to do, the number of patients, the number of sites, the inclusion and exclusion criteria," and so on. And then we went to FDA, and before anybody even opened their mouth, I said, " Here's the clinical trial that we're going to do, the number of people, the number of sites," and so on. I didn't tell them, " Oh, by the way, FDA, the reason why we're doing this clinical trial has nothing to do with you, FDA, but all to do with your friends up the road at CMS." That's none of their business. I don't need to tell them that. But every single person in the room knew, Jon, that I could have gotten that device onto the market without any clinical data. So what did I achieve? I just got myself a ton of brownie points, because one of the things that I've learned in being married for a number of years now, Jon, is I will take brownie points for whatever reason why I can get them, because sooner or later, I will have to cash them. So this is an example of not just why reimbursement strategy is important and integrating it with your regulatory strategy, even international reimbursement. But it's also another example of how, as I've talked about before, Jon, I consider this whole thing to be a poker game in every sense of the word. And so what I enjoy about our discussions, not just today, but in all of our discussions, is not just talking about the rules of poker, but actually the strategy to how to win the game. Make sense?
Jon Speer: Yes, it does. And just a couple reactions. So earlier we were talking about the importance of regulatory strategy and being holistic in your approach, and especially if you're considering multiple markets for your products. And if you don't do that close to the front end, how that could be ka- ching, ka- ching, ka- ching. Well, the example that Mike just rattled off, talking about speaking with CMS on reimbursement on the front end, had he waited until the product was done and cleared and... because everything pointed to you, you didn't need clinical data or evidence to get that 510( K) clearance. Had you waited until that point to start talking about your regulatory strategy, ka- ching, ka- ching, ka- ching, right?
Mike Drues: Actually, I think in that case, Jon, it would be the absence of ka-ching, ka- ching, ka- ching. There would be no cash registers ringing, because nobody would be using your device.
Jon Speer: Touche. I mean, okay, that's the point. Of course, we want to develop devices that are going to improve lives, save lives, and so on and so forth. And you need somebody to pay for them so that you can make as many as you possibly can to save and help as many people as you can. So reimbursement's important. One other thing I'll say about the regulatory reimbursement topic, I had somebody mention this to me... actually, I've heard this a few times, but a couple years ago, where they were under the assumption that since both FDA and CMS are both branches within HHS, Health and Human Services, that those two entities are speaking together sort of on your behalf about your product and regulatory and reimbursement. They're not.
Mike Drues: One would like to make that assumption, Jon, and I'm hesitant to use this metaphor, but I will anyway. One of the things that we learned post- 9/ 11, is that the FBI and the CIA didn't really talk to one another. So why would we assume that FDA and CMS would talk to one another? Now, to be fair, there is more communication than there has been in the past, and there have been working groups, and I sat on a working group years ago to try to facilitate that interaction. I sat on it for several years. I finally got off because, you mentioned snail space before, if we were in a race with a snail, the snail would've won. That's just our US government hard at work, I guess. But the point is things are a little bit better than they were. But for our friends that are listening in this audience, I would not make that assumption. If you're in that situation, have to take the ball in your own hands, so to speak. Don't rely on somebody else to take the ball down the field for you.
Jon Speer: Yeah, absolutely. All right. So we've covered a lot of ground. So any important points or takeaways that stick out more than another as we wrap things up today?
Mike Drues: Well, I think just to quickly recap, Jon, I think it's important to begin thinking about your regulatory strategy and your international regulatory strategy as early in the product development process as possible. You don't have to come up with a fully detailed 300 page plan, but at least identify the general, the different options that you have, the requirements and so on. And don't just create it once and stick it in a drawer in a cabinet somewhere and never touch it again. Revisit that plan periodically, whether it's once a month, once a quarter, whatever, it depends on your situation. Communicate with the regulatory authorities, whether it's the FDA or HSA or wherever you're dealing with, and be aware of the changes that are going on. If you follow these, I'll be the first to admit, most if not all of this is common sense. But as I've said before, all good regulation should be based on common sense. And if it is not common sense, it is not good regulation. It is as simple as that. What else would you add to our list of things to remember from our discussion today, Jon?
Jon Speer: I think you hit most of the points that were top of mind. I mean, start early, start your regulatory strategy early. I know we focused the conversation today on regulatory strategy. We had a couple points where we talked about reimbursement, but that's just as important in many cases. So don't forget about that and do that early as well. It's dynamic, keep revisiting it. So I think that kind of sums it up for me. So, well, Mike, I appreciate the opportunity to dive in on this topic. I guess I'll leave one final point. If you're still thinking your regulatory strategy is your path to market and only your path to market, then you haven't been paying attention to us. Go back and listen again.
Mike Drues: Amen.
Jon Speer: All right. But thank you, I appreciate the opportunity to chat with you about this important topic that I think is always going to be around in some form or fashion. I don't see how you're ever going to avoid the importance of regulatory strategy for the design and development of medical devices.
Mike Drues: And unfortunately, Jon, as you said, it's always been around, but it's also always something that people continuously to screw up.
Jon Speer: That's why we talk about these things sometimes, unfortunately. But anyway, Mike Drues, Vascular Sciences, as I'm sure you've picked up by now and listening to this episode, certainly a wealth of knowledge when it comes to, I'll say pretty much all things regulatory, especially with respect to med device. And I know he does a lot of work in other life science industries as well, including, I think you do some pharma work and some biotech work and things of that nature. But certainly a guy you want to have in your corner. And if you have any questions, certainly reach out to him. So thank you so much. This is the founder of Greenlight Guru, Jon Speer, and you have been listening to the Global Medical Device Podcast.
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Etienne Nichols is a Medical Device Guru and Mechanical Engineer who loves learning and teaching how systems work together. He has both manufacturing and product development experience, even aiding in the development of combination drug-delivery devices, from startup to Fortune 500 companies and holds a Project...