October 21, 2015

Maze of FDA Regulations Slows Medical Innovation to a Crawl

Summary

But the real cost [of the FDA maze] falls on patients. For some, the devices arrive late or, in the worst cases, too late. And we will never know which health-improving or life-saving technologies were left on scratch pads because the time and expense discouraged entrepreneurs from developing them in the first place.

New technologies are poised to launch a health care revolution, improving care and cutting costs. Unfortunately, an obsolete regulatory framework for medical devices threatens to slow or derail important components of that revolution. A mid-1970s law requires virtually every medical device—and improvements to existing devices—to endure a slow, expensive, uncertain approval process, ill-suited to 21st-century technology. The Food and Drug Administration (FDA), which grants such approval, has an aging structure and culture that adds extra layers of discouragement to would-be innovators. 

A “medical device” is essentially anything (other than a drug) that is used to “diagnose, prevent, or treat” diseases or other medical conditions. Even an electric toothbrush is a medical device, so an innovator wishing to improve the product may face a costly, drawn-out process to get it to market. The same potentially goes for prosthetic hands now produced on 3-D printers and assembled by elementary school students for their classmates. Some of the most promising medical devices include a software component, so developers face uncertainty over whether, say, a particular software update requires FDA pre-approval. As with drugs, devices and alterations to those devices must be cleared by the FDA before they reach patients. This process can be confusing, time-consuming, expensive, frustrating, unpredictable, and inefficient.

Some products take years to make it through the FDA’s maze. A recent report noted that three devices submitted to the FDA in 1998 did not gain approval until 2007. For all products, the fees and testing are expensive. It costs on average $24 million to deal with the FDA’s requirements. That’s 75 percent of the overall average cost of developing and getting a medical device to market.

But the real cost falls on patients. For some, the devices arrive late or, in the worst cases, too late. And we will never know which health-improving or life-saving technologies were left on scratch pads because the time and expense discouraged entrepreneurs from developing them in the first place.

The FDA’s incentives bias its behavior toward long deliberation and excessive caution. There are better ways to regulate medical devices, and some are described in my recent paper, coauthored by Robert Graboyes and Adam Thierer, “US Medical Devices: Choices and Consequences.” In particular, the European Union (EU) assigns the task of certifying medical devices to “notified bodies”—private competing entities somewhat resembling Underwriters Laboratories. Like the FDA, the EU’s notified bodies have incentives that drive them to caution. But unlike the FDA, competition among the European entities discourages them from heel-dragging and extreme risk-aversion. As a result, Europe approves devices more rapidly and less expensively without sacrificing the safety and efficacy that the FDA delivers.

In the United States, such a system would complement the massive information highways that give patients and physicians more data than ever before on the medical devices that will ease their suffering and lengthen their lives.