Regulatory Barriers to Innovation for Startups

France has become a breeding ground for innovation because the country fosters the development of dynamic startups with international ambitions. These companies are active life science industries that are seeing explosive growth (biotech, medtech, pharmaceutical, health tech and e‐health). In Europe, approximately 25,000 companies specialize in medical technologies, including more than 1,000 in France. Among these, 94 percent are small companies (those employing fewer than 250 people) (1).

Despite the strong growth of these startups, which has been facilitated by exchanges with science companies and manufacturers, these businesses continue to face many obstacles in the highly competitive global market. The landscape is rapidly changing, and technological innovation is not the only guarantee of a startup’s success. Other factors, such as funding and compliance, are essential and represent these small businesses’ main concerns (2).

Startups that operate commercially in the European and U.S. markets must not only deal with a plethora of regulations (the European Union’s GMP, the U.S. Food and Drug Administration’s (FDA) 21 CFR Part 11 and FDA 21 CFR Part 820, for instance) but they also have to anticipate future changes. Life science companies (and notably those in the field of medical devices) must be nimble and be able to transition on the fly. (See Figure 1 below) European regulations for medical devices, Medical Device Regulation (MDR) and in‐vitro diagnostics (IVDR), will take effect at the end of 2019. ISO 13485: 2016 will be mandatory by March 2019. The current transitional period for its implementation defines the critical path for CE mark approval.

Innovative startups must be fully aware of the changes that compliance will require and must evaluate the return on investment (ROI) of their product. If the requirements are not met within the defined time frame, it could mean the non‐marketability of a product or its withdrawal from the market. Many startups worry about being able to meet every requirement. “Too many French companies are experiencing regulatory difficulties," says Pascale Cousin, director of regulatory affairs at SNITEM (Syndicat National de l’Industrie des Technologies Médicales). Regulatory changes for companies have significant impacts in several areas that include commercial, investors, R&D and organizational aspects.

So how can startups overcome these most common hurdles? Tackling regulatory challenges will entail a multidisciplinary approach. Below are three key recommendations on how to overcome some of these regulatory barriers:

#1 Get Informed.

Before starting the development of a new product, it is important to identify the type and classification of the medical device product. This status will determine which regulations the product will have to comply with. The classification is determined based on the risk it constitutes to the patient. You can use the FDA webpage search function to find the corresponding classification of your device.

Medical device classification depends on the intended use of the device (e.g.: a scalpel is intended to cut tissue) and also more specifically for its indications for use (e.g.: a particular scalpel used to make incisions in the cornea).  You can find out more about the definition of intended use within the 510(k) Program: Evaluating Substantial Equivalence in Premarket Notifications [510(k)], Guidance for Industry and Food and Drug Administration Staff (3).

#2 Define a Regulatory Strategy From Conception.

It is very common for the CEO or founder of a startup to have a scientific and/or medical background. Therefore, implementing a quality system is often minimized in favor of activities that are perceived as added values, such as patents, licenses and technological partnerships. But neglecting such a system until the development is completed and the product is launched can be risky. To succeed in this endeavor, an individual within the startup must dedicated to and in charge of regulatory strategy. This strategy must include the documentation of all the processes and activities from the company’s inception. In addition, for the regulatory strategy to be effective, the company must integrate a culture of documentation from the beginning because 60 percent of product development is about its documentation. To achieve this standard, setting up an electronic quality management system (eQMS) adapted to compliance and regulatory needs from the earliest stages is crucial.

#3 Set up a Quality System Management (QMS) Dedicated to Life Sciences.

For financial reasons, companies often take the shortcut of bouncing between different software and web applications, or they continue to work on paper systems to manage quality. This gives a fragmented approach to quality and increases the risk of errors and non‐compliance. Not surprisingly in this scenario, non‐compliance can be costly for companies in the form of delays in studies, market losses and closure.

In 2009, a life science company’s use of inappropriate documentation tools (Google Drive, SharePoint, for example) in place of a QMS resulted in a warning letter. “The standard software (Microsoft SharePoint) used by the company to manage its documents was not correctly validated regarding the defined intended uses. In addition, at the time of the inspection, there were two different versions of procedures (CAPA, customer complaint) and an absence of the SharePoint document review history “(4). In this context, startups should assess the relevance and capabilities of their existing QMS in order to gain FDA and ISO compliance. A fully integrated and automated QMS will allow the business to minimize risks in the development phase, reduce time to market and ensure the safety of drugs and medical devices.

The QMS implementation should take into account the aspects of pre‐market processes (e.g., document control and training) post‐market surveillance (e.g. CAPA, change, control and customer complaints), a robust validation plan and data integrity management mechanisms (data integrity, cybersecurity) throughout the product’s lifecycle. Below are some of the benefits of data access provided by regulatory compliance and the use of a QMS:

It is necessary to have a QMS that not only meets the FDA/ISO standards, but also goes further. For example, MasterControl, a U.S.‐developed suite of enterprise software solutions that includes QMS, is specifically designed so that its various modules easily ensure that regulated life science companies meet international requirements efficiently and effectively (such as a 510(k) submission, ISO 13485, CFR 21 part 11 and CFR 21 part 820). MasterControl’s cloud-based Spark is specifically designed to help startups manage quality and compliance so that they can get their products to market faster and more efficiently.

To conclude, regulatory barriers could potentially prevent European startups from accessing the market. You can avoid this by implementing a relevant regulatory strategy that includes the implementation of QMS to bypass these obstacles. Innovative startups can rely on expert regulatory and compliance partners that specialize in life science manufacturing compliance. A powerful and proven quality system that evolves with current standards is a must-have to provide your startup with the confidence to safely and effectively market the product globally. But regulatory compliance is not the same as quality. Rather the benefits of quality go beyond the risks of non‐compliance. Adopted at all levels of the company, a quality approach demonstrates the value of the company, in addition to reducing costs and saving time.

References:

1. “ Dispositifs médicaux : diagnostic et potentialités de développement de la filière française dans la concurrence international”, Rapport PIPAME, Juin 2011 (French)
2. “15e édition, Panorama France Health tech 2017”, France Biotech (French)
3. “510(k) Program: Evaluating Substantial Equivalence in Premarket Notifications [510(k)], Guidance for Industry and Food and Drug Administration Staff “, July 2014 (English)
4. http://www.ofnisystems.com/media/ucm173977.pdf