Dive Brief:

• The U.S. has replaced the European Union as the priority market for medical device companies, with a survey finding 89% of medtechs plan to prioritize FDA authorization going forward.
• Boston Consulting Group, which worked with UCLA Biodesign to present data from a survey of 104 senior executives, said the shift is driven by the EU's "complex and unpredictable" Medical Device Regulation, which took effect in mid-2021 and has made gaining a CE mark more difficult. The CEO of a European cardiac device company, who responded to the survey, said "MDR is killing innovation."
• The downturn in the attractiveness of the EU has happened at a time when FDA has courted the medtech industry. Two-thirds of respondents said FDA has adapted well to the changes brought about by digital technology, while only 34% of respondents believe the EU has adapted well. FDA has "invested heavily to keep pace with digital trends" and the U.S. "has emerged as the go-to market for global launch," according to BCG's report based on the survey data. 

Dive Insight:

The past few years have seen regulators on both sides of the Atlantic change their approach to medtech. The biggest changes have happened in the EU, where MDR and the In Vitro Diagnostic Regulation are redefining what it takes to bring products to market in the region. At the same time, FDA has set the target of making the U.S. the priority market for developers of novel devices.

In its most recent assessment, FDA found almost two-third of manufacturers of novel technology devices plan to bring their products to the U.S. first or in parallel with other major markets. The BCG report adds to evidence that FDA is on course to achieve its objective.  

The shift in focus from the EU to the U.S. appears to have at least as much to do with what Europe has done to alienate the industry as what FDA has done to woo it. For 23% of companies with CE marks, the EU has now fallen behind Japan and China on the list of priority markets, reflecting concerns about the impact of MDR and other factors.

"Respondents overwhelmingly view new MDR rules as complex and unpredictable, making it less appealing to develop and launch novel products in Europe. Other factors, including Brexit and intense reimbursement pricing pressure, may also reduce the attractiveness of pursuing the CE mark," the BCG report states.

Only 22% of respondents said the EU pathway for regulatory approval of standard medical technology is predictable. The figure for the U.S. was 62%. There is still room to improve for FDA, particularly with 33% of respondents viewing its digital product pathway as predictable, but there was broad support for some of its key initiatives and a perception that it now offers a clearer path to market than the EU.

In the survey, 79% of respondents strongly agreed or somewhat agreed that the FDA is responding effectively to advancements in medical technology. When its comes to artificial intelligence and machine learning, surveyed executives contend U.S. regulators also have the advantage.

The BCG report notes that medtech companies are developing AI/ML products at an accelerating rate.

"Of the 343 approvals of such products by the FDA since 1997, more than half occurred in 2019 and 2020. Because they are innovative, these products demand greater expertise on the part of reviewers and more regulatory clarity for companies," the report states. 

Survey respondents praised FDA's breakthrough device designation program, with 88% of people saying the guidance is at least somewhat clear and 75% expressing the belief that it will lead to earlier patient access. More than half of respondents believe the program supports more flexible study design.