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The High Cost of Trying to Develop Medical Devices on the Cheap

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Having worked with investor-driven, medical device startups over the past two decades, I’ve learned, often the hard way, what works and what doesn’t work, in attempting to bring a new device into the marketplace. If you’ve been following this blog, you’re familiar with the concept of Strategic Dollars in device development (the ≈ 25% of your development project that occurs during discovery & feasibility). How these dollars are invested have a disproportionate impact on success or failure. Please let me share two real-world examples that illustrate my point.

Several years ago, prior to joining Rev.1, I attempted to bring a startup, Class II device company to Rev.1 for the startup’s initial development needs. We’d secured $1 million in seed funding, and were looking to integrate several existing technologies into a new, innovate platform to treat an underserved, costly, and endemic disease state. The founder and CEO of the device firm felt the company could develop the device off shore, and in doing so, capture major cost savings in the process. He was also under the misguided impression this approach would result in a faster path to FDA.

I’m sure you can see where this is going. The only thing this approach accomplished was the burning of seed capital. Actually, that’s not entirely true. The off shore approach, accompanied by multiple hand-offs to various engineering resources, resulted in a rat’s nest of fragmented documentation. A major remediation would be needed prior to engaging the FDA, even for the company’s pre-sub call.

I convinced the founder/CEO to revisit Rev.1 for the remediation work and to get the device back on the right development path. The cost to remediate the documentation proved to be as expensive as the development work that had already been expended, to no avail. The founder/CEO again thought he could do this on the cheap and declined to pivot to professional remediation and development. Over a year after this event, the CEO reached out to me and acknowledge his approach had been a mistake. The company is no closer to FDA submission today than it was four years ago.

In early 2016, I brought another startup device company to REV.1 for the company’s developmental needs. Once again, I had helped secure seed funding for the development of this Class II device, and with the support of Rev.1, the company had a relatively direct and quick path to 510(k).

Rev.1 did a great job determining the early feasibility of the device, yet the founders thought they could take the development of the device from there. This particular opportunity was hot, having benefited from a massive drop in cost for various electronic components (from the cell phone industry) that were crucial to the device. So hot that several competitors, that chose to follow formal and compliant development procedures, have since leapfrogged the startup. The startup replaced the co-founder and CEO a month ago, having made little to no progress towards commercialization.

There is a truism that applies to the development of medical devices. You only have one chance to do things the right way, for the first time, once. That may read as a bit redundant, but the redundancy is intended to drive the point home. You can see from these two examples how the misallocation of Strategic Dollars can derail every subsequent step in the developmental process.

Unfortunately, Mulligans are rarely granted in medical device development.