MDDI_Medical Device & Diagnostic Industry

MDDI, June 2014

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From the Editor 8 | JUNE 2014 mddionline.com E urope has long been considered an ideal market for the first commercial launch of innovative products, thanks to its size and a regulatory system that is perceived as more predictable, consistent, transparent, and speedy than that of the United States. But with poten- tially more stringent regulations on the horizon in the EU, will medtech companies reevaluate their launch strategies? Launching innovative products in Europe first has allowed medtech companies to gain market and patient access three to five years quicker than they would in the United States, according to in- dustry organization Eucomed. It has also enabled the collection of clinical data to support entry into other markets. Critics of FDA have even held up the EU as a system to emulate: One that fosters innovation without jeopardizing patient safety. And then the Poly Implant Prothèse scandal happened. Breast implants fraudulently featuring industrial-grade, rather than medical-grade, sili- cone slipped through the cracks, endangering pa- tients. Now, the EU is bracing for sweeping change as it awaits the final, much-delayed regulations. These new regulations are expected to have increased clinical data requirements and other stipulations that would delay the approval pro- cess—effectively negating the primary advantage of going to market first in Europe. Of course, Europeans are hoping that won't be the case. "Eucomed believes all parties con- cerned...are convinced of the need to strengthen the system to improve patient safety without un- necessarily compromising on innovation-friendli- ness," says Serge Bernasconi, Eucomed CEO. It's unlikely that a mass exodus of innovation will ensue. Europe is a large enough market that many companies will continue to launch there first, despite a higher barrier to entry. That said, Europe could lose some of its launch luster. As a result, some companies looking to launch quickly may set their sights on markets with lower barriers to entry. Asia—and China, in particu- lar—seems to be on the radar ; however, intellec- tual property concerns, among a number of other challenges, are red flags for some companies. Ex- perts also cite Brazil and the Middle East as at- tractive markets for innovative product launches. Ultimately, though, changing market dynamics could bring innovative products stateside first. "It used to be that certain markets could leap- frog each other because the requirements were so different; you could really get a headstart in one part of the world while preparing for entry in another part," notes Susan Garfield, senior vice president at market research firm GfK. "I think that we're see- ing a bit of a regression with the top markets starting to look more and more like each other so that manufacturers are really having to look more at the U.S. and Europe as part of the same or similar processes as opposed to very different stages of com- mercialization." If the markets are beginning to look alike, the U.S. boasts sev- eral advantages. "[Reimburse- ment] requirements are much more uniform in the U.S. as compared to the EU," according to Roz Sweeney and Ron Sills, analysts at research and advisory firm Nerac. "While the EU is a single-payer system, you are still dealing with 20-plus countries. In the U.S., you have 300 million people in the market covered by Medicare and private payers. The more level playing field could cause companies to shift their initial mar- keting applications to the U.S., similar to what pharmaceutical companies do right now." With global harmonization efforts underway and the EU regulatory framework changing, a regional fast track to market for innovative, high-tech prod- ucts may soon be a thing of the past—at least in the major developed markets. But all of this speculation may be moot. As Sweeney and Sills point out: "Un- less there is a specific or urgent need for a device or drug in a particular country, it may not matter where a company goes to market first." 2 Will Europe Remain Medtech's Innovation Destination? Shana Leonard Group Editorial Director ES450939_MD1406_008.pgs 06.03.2014 02:37 UBM black yellow magenta cyan

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