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The Changing Medical Device LandscapeProviding Industry Solutions That Help Medical
Device Companies Innovate The Way They Innovate In Today’s Globalized, Cost Constraint,
Regulated, Value-Based Healthcare Market
Arieh HalpernBusiness Consultant Director Life Science Industry
3DS Experience ForumLife Sciences Industry Track, November 11, 2014
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The New Reality - Paradigm ShiftValue-Based Healthcare
Better Outcomes
Lower Costs
Higher Costs
Worse Outcomes
IV
Living In The 4th QuadrantImproved Quality of Care & Reduced Costs
• Medical Device Companies Need to Develop Products That Demonstrate Better Clinical Outcomes at Lower Costs Compared to Present Therapies
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The Changing Healthcare Market Environment In An Ever More Regulated, Cost Constraint, Value Based, Globalized Market
Value-Based Health Economics (Clinical & Economic Evidence)Quality outcomes & lower overall cost is key to new product adoption
Rising Healthcare CostsIs causing governments to exude downward pricing pressure
(Increased Aging Population)
Increased Regulatory ScrutinyIs slowing the pace of product approvals
Global Manufacturing FacilitiesIncreased FDA Audits / Inspections of OUS mfg. facilities & companies
Medical Device Excise Tax (U.S. Only)2.3% Revenue Tax on Almost All Medical Devices (Pending Appeal)
Global Collaborative Coordination / Enterprise IssuesAmong R&D, Regulatory, Supply Chain, Quality, Manufacturing
(Documentation / Data Management)
Global Market Expansion / RegistrationCompliance With Outside Agencies
Product Complaints / RecallsClosing Product Complaints In A Timely Manner
Global Pricing Demands / ProductivityDeveloping Cost Effective Products To Meet Emerging Markets
(e.g. China, India, Brazil)
Accelerated Development In Emerging CountriesGDP per capita growth will continue to drive double-digit growth in emerging
Countries (i.e. China, India, Brazil)
OUS – Outside The U.S.
UDI
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Impact of Managed Care• Managed Care has resulted in:
• Hospital closures• Consolidation into Integrated Healthcare Delivery Networks (IHDN’s)• Increased focus on Cost of Care, Productivity, Better Outcomes
• This has resulted in many changes in healthcare delivery with regards to patient care, how hospitals care for patients, governmental healthcare policies and healthcare insurance providers.• This has had a direct impact in how hospitals, alternative healthcare providers
purchase and maintain medical equipment.
Source: PubMed – U.S. National Library of Medicine National Institute of Health, 2004
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………. Upon Healthcare ProvidersImpact of Managed Care
• Forcing hospital and alternative healthcare facilities to do more with less and to be cost effective without sacrifice to patient safety.
• What is the least a hospital can do to achieve clinical outcome.
Healthcare Provider - refers to a provider of medical or health services (i.e. hospitals, extended healthcare facilities, physician offices, outpatient surgi-centers)
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Shifting Away from Acute Care
Source: Frost & Sullivan, The Advisory Board Company, A.T. KearneyACA – Affordable Care Act; ER – Emergency Room
Quali
ty o
f Car
e
Cost of Care per Day
$ 10,000$ 1,000$ 100$ 10$ 1
Community Hospital
ICUSpecialty Clinic
Acute CareSkilled Nursing Facilities
Assisted Living
Residential CareCommunity Clinics
Chronic Disease Management
Home Care
Doctors Office
Low Complexity Treatment
Preventative
Retail• CVS (MinuteClinic)• Walgreen (Take Care)• Walmart• Kroger (The Little Clinic)
To Payers• Lower healthcare costs by
reducing ER visits & other more costly providers
• Compliments insurance product design (e.g. enables more design choices)
To Providers• Provides healthcare
channels to millions of newly insured under ACA
• Alleviates utilization constraints of ER resources
To Patients• Convenient walk-in
locations• Shorter wait times• Low cost service• Easy access to OTC
items to treat minor issues
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………. Upon Medical Device CompaniesImpact of Managed Care
• For new novel products to be considered, healthcare payers demand & medical device companies must provide:
• Clinical proof of its superiority over established therapies, including clinical evidence of the technologies medical benefits in patient outcomes and costs over conventional therapies.
Improve Patient Outcomes And OrReduce Cost
Without Sacrifice to Quality and Patient Safety
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SAPIEN Transcatheter Heart Valve (Non Open Heart)Edwards Life Sciences
• Benefits (As Compared to Traditional Open Heart Surgery)• Restores normal blood flow w/o risk of open heart surgery• Healthcare Costs: Lower• OR Time: Significantly Lower• Patient Risk / Hospital Insurance: Minimal• LOS in ICU: Lower • Hospital LOS: Lower• Cost to Insurance Provider: Significantly Lower
LOS – Length of Stay
Game Changer
Insulin Inhaler – MannKind Corp. Afrenza Approved for Adults with Type1 & Type 2 Diabetes
• In June 2014, FDA approved the insulin inhaler for Adults with Type1/2 Diabetes
• Diabetes 7th leading cause of death in the US, with 26 million people with diabetes in 2010 (Center for Disease Control & Prevention), global approximately 350 million
At 88, Inventor Alfred Mann's has launched 17 companies in 5 decades , have created such devices as a rechargeable pacemaker (Pacesetter sold to St. Jude Medical), an implant for deaf people (Advanced Bionics), an insulin pump (MiniMed sold to Medtronic) and a prosthetic retina (Second Sight’s).
Insulin Injections Insulin Pumps Insulin InhalerGame Changer
User Experience
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Current Regulatory View of CAPA2012 Year-End Compliance Results
2012 FDA 483’s Issued By Category
Source: “The GMP Letter” June 2013 (Issue No. 401), published by FDANEWS
CAPA has been the #1 reason for 483 observations since 1997
10 Most Common Reasons for issuing 483’s• No corrective action/preventive action CAPA
System• Inadequate management controls• No medical device record system• No written procedures• Inadequate auditing procedures• Missing or poorly maintained complaint files• Inadequate complaint handling procedures• No device master record (DMR)• No device history record (DHR)• In adequate employee training
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Source: MEDIcept, Inc.
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Top Issues Confronting CEO’s
Issues 2012 2011Financial Challenges 2.5 2.5Patient Safety & Quality 4.4 4.6Healthcare Reform Implementation 4.7 4.5Governmental Mandates 5.0 4.6Patient Satisfaction 5.6 5.6
Source: ACHE, 2013 report
NOTE: These issues are ranked by the lowest number having the highest concern.
Ranking of Issues Affecting Medical Device IndustrySmall vs. Large Companies
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CEOs are focused on innovation like never before, seeing it as the primary path to growth
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Time-to-Market Acceptance is Increasing
Safety
Efficacy
Tim
e-to
-Ma
rket
Tim
e-to
-Mar
ket
Acce
ptan
ce
New technologies increasingly must demonstrate enhanced outcome,
cost effectiveness and ease of use.
1980’s
Safety
Efficacy
Outcomes
1990’s
Safety
Efficacy
Outcomes
Cost Effectiveness
2000’s
Safety
Efficacy
Outcomes
Cost Effectiveness
2010
Patient Experience
Source: PwC’s “Unleashing the power of innovation” report, 2013
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Accelerating Innovation – Future Of MedTechIn order to survive in today’s environment, medical device companies have to innovate the way they innovate.
Innovation Has To Occur Across The Entire Innovation Lifecycle & Organization Shift From R&D Centric to End User / Payer Centric
Move Away From Dedicated Department Silos & Paper Based Records To Single Source of Truth for Effective, Efficient, Global Enterprise Wide Collaboration (Internal & External)
Streamline The Product Lifecycle Development Flow Process, By Increasing Productivity Efficiency Resulting in Cost Saving Reduction
Shorten Time to Market Through More Efficient data / documentation processing & collaboration resulting in improved sharing of information, reductions in processing times, reduction in time needed to review documents for proper content.
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Government & Patient Value
Company Value
What Medical Device Industry Values the Most ?Market Transformations Shaping the Dassault Strategy
Efficacy Improvement & Cost Reduction
Innovation for Unmet Needs
Scientific Leadership
Ease & Comfort of Use
First to Market through Operational Excellence
Internationalization
Global ComplianceQuality / Regulatory
Safety
Return on Investment
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Development Solutions
Concept Definition/Planning Development Qualification Launch Post Launch End of Life
Life Sciences – Medical Device Experiences Strategy
Mechanics to CureNon-Active Implantables (i.e. Heart Valves,
Stents, Hip / Knee Joint Replacements)
Licensed to Cure for Medical DeviceAvailable
Business Process Flow Solutions
Controlled Documents
• Authoring, Review, Approval of Controlled Documents
• SOP / Training Automated Notification
Material Compliance
• Material Compliance Management
• Material Compliance Declaration
• Material Compliance Analysis
Regulatory
• Global Market Registration (FDA 510(k), PMA, CE, CFDA))
• Device Identification Records (UDI)
Complaints, NCR, CAPA, Audits
• Complaints & Non-Conformance Reports (NCR)
• CAPA & Audits• Adverse Event
Reporting (eMDR)
BOM & DMR
• DMR – Device Master Record
• Eng. / Mfg. BOM• Classification &
Component Management
• DHF – Device History File
• Program Management• Quality Based
Document Control
Project & DHF
• Requirements Management with Traceability
• V&V Test Procedure & Reports
VOC Requirements
Ideation & Concept Design
for Medical Devices
Available
Ideation
From Market to Specifications
• Social Market Intelligence
• VOC Requirements Management
• Social Ideation & Creative Design
• Global Collaboration• Concurrent Real-
Time Design• Project Management
Small Scale Electronics to CureActive Implantables (i.e. Pacemakers,
Neurostimulators), AED, Patient Monitors
Smart & SynchronizedImaging / Diagnostics
Manufacturing
Made to CureGlobal, faster, leaner, robust
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Process Flow Map of the lifecycle of Medical Device product
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Achieving Innovation Through Collaborative Sharing
+
Brands“User Experiences” Software Application
Products InScientific Research, Engineering, Development,
Art
Process Flow Map of the lifecycle of Medical Device product
Innovation & Concept Design
Licensed to Cure for Medical Device[Medical Domain] to Cure
Innovation & Concept Design
Perfect Package
Licensed to Cure for Medical Device[Medical Domain] to Cure
Licensed to Cure for Medical Device
[Medical Domain] to CureLicensed to Cure for Medical Device
Licensed to Cure for Medical Device
Licensed to Cure for Medical Device
Licensed to Cure for Medical Device
Licensed to Cure for Medical Device
Licensed to Cure for Medical Device[Medical Domain] to Cure
3D Modeling
Virtual Simulation Virtual Mfg. Virtual
Training
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Information Management For Product Life Cycle ProcessDecrease number and severity of product recalls / field actionsIncrease design and supply chain efficiencyExpedite product / process transfer / integrationOptimize end-to-end traceabilityImprove product knowledge / information qualityMeasure product lifecycle metrics
Do You Know Where Your Data Is !!Can You Access it Simply, Clearly and Effectively ?• Administrative / Financial / Operational Data• Marketing Data / R&D Data / Manufacturing & Process Data• Product Safety / Regulatory• Science
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Government & Patient Value
Company Value
What Medical Device Industry Values the Most ?Market Transformations Shaping the Dassault Strategy
Efficacy Improvement & Cost Reduction
Innovation for Unmet Needs
Scientific Leadership
Ease & Comfort of Use
First to Market through Operational Excellence
Internationalization
Global ComplianceQuality / Regulatory
Safety
Return on Investment
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Shaping the Dassault Systemes UDI Strategy
“This is not about just being able to identify devices. We (FDA) aretalking about a holistic approach to integrating medical deviceidentification throughout the entire healthcare system. UDI willbe a fundamental piece of everything we do going forward.” JayCrowley, Former Sr. Adviser for Patient Safety U.S. FDA Center forDevices and Radiologic Health
UDI As A Holistic Strategy - Meeting The FDA Vision of an Integrated UDI Throughout the Enterprise Healthcare System
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Device Regulatory Excellence
HL7 SPLSubmission
FDA Electronic Submissions Gateway
(ESG)DI to GUDID Submission
Other GUDID Plug-In Modules
GUDIDDI
AttributesDevice Identification Record
Capitalizing on UDI for Related ProcessesExtension 1: Global Market Registration
Market Authorization
DossierFDA Submission Class I, II, III
Paper or Electronic submission (incl. eCopy)
Other submission Country templates
Global Market Registration
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Device Regulatory Excellence
HL7 SPLSubmission
FDA Electronic Submissions Gateway
(ESG)DI to GUDID Submission
Other GUDID Plug-In Modules
GUDIDDI
AttributesDevice Identification Record
Capitalizing on UDI for Related ProcessesExtension 2: CAPA Complaints / Adverse Event Reporting
Market Authorization
DossierFDA Submission Class I, II, III
Paper or Electronic submission (incl. eCopy)
Other submission Country templates
Global Market Registration
Device Quality Excellence
Adverse Event Reporting
eMDR Adverse Event Reporting
Other eMDR Country Plug-In Modules
Health Care Provider
CAPA
Patient
Product Complaints
- Analyze Data- Investigate Cause- Identify Action Plan- Execute, V&V
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Going Forward• For medical device companies to thrive under the new environment, they must
innovate the way they innovate.
• Improving upon product development & operational process flow effectiveness will allow medical device companies to deliver upon innovative products:
• Timely• Cost Effectively• Efficiently• Safe• Easy to Use
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