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Delivering Innovation in the Medical Device Industry

For a successful product launch, faster time-to-market and regulatory compliance are key

by Swapan Jha, November 2010

Product innovation is a key performance indicator for the medical device industry. However, due to the highly regulated nature of this industry, companies face a regulatory process that is lengthy and unpredictable, and can delay product launches — which impacts company profitability. Medical device companies need to develop a comprehensive product innovation process that enables FDA compliant datasets to shorten time-to-market and meet regulatory approval & compliance requirements. 

Faster time-to-market

Any medical device company driving new product innovation or changes to existing products in either Class II or Class III categories of products needs to undergo the FDA review process to evaluate the efficacy and product safety. The 510 (k) approval process for the Class II type device usually takes about 90 days. In contrast, under FDA regulations, the agency has up to 180 days to review and grant approval for Class III devices. After the FDA makes a decision, interested parties may petition it within 30 days.

In January 2009, the US Government Accountability Office (GAO) studied FDA data that indicates that companies planning to launch new products in Class II or Class III categories have a significant probability of being denied FDA approval. Over the five-year period, the Class II category had a 65% approval rate vs. 78% for the Class III category device.

  FDA Review Decisions in FY2003-2007 by FDA Review and Decision

Figure 1: FDA Review Decisions in FY2003-2007 by FDA Review and Decision

Source: GAO analysis of FDA data, Credit Suisse

This delay or denial is in addition to elapsed time (446 days for Class III and 109 for Class II) from the day of filing. It is imperative for medical device companies to enable a closed-loop collaborative (external and internal) environment to manage all aspects of product development and the necessary infrastructure required to meet the regulatory compliance requirements before making submissions for FDA approval. 

Regulatory compliance

In 2008, FDA issued 2,721 recalls, 369 convictions and fined $846 million. In addition, the FDA may issue warning letters to a device manufacturer for a number of reasons, including but not limited to violation of good manufacturing practices and quality system regulations.

Hence, it is very critical for companies to leverage a closed-loop enterprise quality process across all key stakeholders of the product (Research & Development, Operations, Quality, Service, Support, etc.) to minimize any delays in producing compliant datasets and documentation for FDA approval.

Quality should be at the forefront of the product innovation process and not an afterthought to minimize any financial exposure and liability. 

Developing a PLM strategy

Medical device companies should have a comprehensive product lifecycle management (PLM) strategy that delivers growth and product innovation. The lack of a comprehensive product lifecycle management approach can potentially impact profitability with delayed and costly product launches.

Product Cash flow curve for delayed product launch

Figure 2: Product Cash flow curve for delayed product launch

Companies should adopt a closed-loop innovation framework based on five key pillars. 

  • Optimize corporate ROI with effective Product Portfolio Planning and Optimization.
  • Develop Innovation Strategies tied to business goals.
  • Monitor and measure development projects with effective Project Portfolio Management.
  • Enable successful execution with disciplined New Product Development Process.
  • Enhance enterprise collaboration capabilities with effective Product Record Management.

The benefits of investing in a robust innovation process that spans the spectrum of activities — from strategic to execution-oriented — are extremely compelling. This framework enables medical device companies to manage product innovation by leveraging a compliant dataset, a key requirement for FDA approval, across the enterprise. This will mitigate regulatory compliance violations and produce all of the necessary data and documentation to avoid delays in the FDA approval process.


Swapan Jha is a senior director within the Insight organization at Oracle Corporation who has worked with several medical device companies on their product innovation opportunities. If your organization would like to engage the Oracle Insight Innovation team, please contact Swapan at swapan.jha@oracle.com.