How Competitive Regulatory Strategy Differs from Regular Regulatory Strategy (And How to Use It to Your Advantage)

Have you ever considered the pros and cons of a PMA vs a 501(k)? Some of the considerations you must keep in mind are related to the path to market, but have you ever thought about competitive regulatory strategy? Going with the PMA approach might be a better business strategy than using the 510(k), despite the entrenched mentality that it’s a longer, more difficult road.

Today we’re going to talk to regulatory guru, Mike Drues. Mike is the president of Vascular Sciences and he is well-versed on the entire process medical device companies go through to get their products on the market. He’s going to share his insight on competitive regulatory strategy and how it can help you make good business decisions.

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Some highlights of this episode include:

• The pitfall of seeing the regulatory process only as a matter of jumping through hoops and the importance of seeing the bigger picture.
• What regulatory strategy is and how it differs from the path to market.
• How competitive regulatory strategy differs from regular regulatory strategy and how you can use it to your advantage.
• Some potential objections to using the PMA and how Mike responds.
• Thoughts on how to use guidance documents as a competitive weapon.
• Why one might consider a de novo classification as part of their regulatory strategy.
• Why you should always be looking for a different, better way to get through the regulatory process.

Recommended Resources:

Article: Competitive Regulatory Strategy: Using regulation to your tactical advantage (Journal of Medical Device Regulation, August, 2015 and abstract

Column: Is Your Boring Regulatory Strategy Costing You Business

Podcast: An Introduction To Competitive Regulatory Strategy 

Podcast: Selecting The Best Regulatory Path For Your Medical Device

Article: How to Sharpen Your Regulatory Sword (MDDI, February, 2014 

Presentation: Competitive Regulatory Strategy delivered at MDM/West, Anaheim, CA on Feb. 11, 2014 (audio only)

Memorable quotes from this episode:

“Using regulation as a competitive weapon is a very unusual and uncommon way to think about regulation. This is what I call Competitive Regulatory Strategy. However, for those who truly understand it and implement it properly, Competitive Regulatory Strategy can be a very powerful advantage over your competition.”

“The pathway to market is nothing more than the mechanism that you use to get your device to market…. The regulatory strategy is much broader; it’s the whole process that you go through.”

“Average regulatory experts know the rules but the best ones know the exceptions.”

Transcription:

Announcer: Welcome to the Global Medical Device podcast where today's brightest minds in the medical device industry go to get their most useful and actionable insider knowledge, direct from some of the world's leading medical device experts and companies.

Jon Speer: Have you ever thought about the pros and cons of a PMA versus a 510(k)? And I'm not just talking about the path to market, but I'm talking about a competitive regulatory strategy, a competitive business strategy, why actually getting a PMA approach might even be better for you and your business than a 510(k). I suspect if you're like most, you're looking at the 510(k) is faster, it's quicker, it's more predictable and that a PMA might even be a kiss of death to your go-to-market strategies for your business. But folks, I want you to think about a bigger picture. I want you to think about competitive regulatory strategy. I want you to understand that there's more to this than just that path to market. And we will explore this today on the Global Medical Device podcast when my guest, Mike Drues, goes into some thoughts and ideas, and some tips and pointers about this topic of competitive regulatory strategy, so enjoy.

Jon Speer: Hello and welcome to the Global Medical Device podcast. This is your host, the founder and VP of Quality and Regulatory at greenlight.guru, Jon Speer. And today, we're gonna dive into a topic that I think many of you probably... I don't know if you take it for granted, but I'm gonna guess that you don't spend as much time on competitive regulatory as you probably should. And the reason for this is, there's a lot of advantages to having a competitive regulatory strategy for your business and for your products and that sort of thing. And to discuss this a little bit further and give you some tips and pointers, I have my good friend, Mike Drues, President of Vascular Sciences. Mike, welcome to the podcast.

Mike Drues: Thank you. Jon. As always, it's a great pleasure to be with you and your audience today.

Jon Speer: Well Mike, as we were preparing for this ahead of time, I know you've got a lot of information to share on this topic of competitive regulatory strategy. In fact, you've written an article or two on the topic too and we'll be sure to share those links with our audience as well.

Mike Drues: Well, that's exactly right, Jon. And just so the basis of this discussion is on an observation that I made many years ago and that is so many people in our business, they view the regulatory process that is getting our device through the FDA or Health Canada or whoever it is as nothing more than a burden, a series of hoops that you have to jump through in order to get your device on the market. And I'm sorry, I just don't see it that way. If I have to jump in through these series of hoops, so be it. But what can I do to position these hoops if you will, to make it more difficult for others to follow in my footsteps?

Jon Speer: Yeah.

Mike Drues: And that's what we'll get into here. This is exactly what I call competitive regulatory strategy.

Jon Speer: Yeah, let's talk a little bit about that 'cause I've done a fair amount of work on regulatory strategy. So maybe it'd be good to give our listeners an overview of what regulatory strategy is, and how this might differ from pathway to market, 'cause I suspect there's probably a lot of confusion here.

Mike Drues: Well, that's right. And that's a great place to start. And many people use the phrase, regulatory strategy and pathway to market synonymously. Those are not synonymous, at least not in my book, Jon. And here's why. The pathway to market is nothing more than the mechanism that you use to bring your device onto the market through the FDA. For example, the 510(k), the De Novo, the PMA, the HDE and so on. The regulatory strategy, on the other hand, is much, much broader than that. It's the whole process that you go through, if you will, to end up with that pathway to market. Because in the 25 years that I've been playing this game, not once have I ever worked on a device, even the most simple device when there is only one way to do something. There's always multiple ways, multiple pathways that we could use, multiple options, and of course, there are advantages and disadvantages to each and every one.

Jon Speer: So one of the things that I do, not to be self-serving, but rather just to simply share some of my best practices with your audience. One of the things that I do with a lot of companies that I work with, especially the small companies and the startups, is help them to develop what I call a regulatory strategy executive summary. It's not a full-blown regulatory strategy, it's simply a list of their different options that they can use to bring their device onto the market. The advantages and disadvantages of each and to the extent that I can provide them with a regulatory burden and assessment and a regulatory risk assessment of each option. In other words, if you take this particular path, then this is how long it'll take, this is what you'll have to do in terms of testing this it'll be what it would cost, and this is your relative probability of getting it through successfully at the FDA.

Mike Drues: On the other hand, if you take a different path, then that's what you would have to do in terms of testing, that's how long it would take, that's how much it would cost, and that would be your probability of success getting it through the FDA. And what a lot of companies, especially small companies, want this information for is to put it into their PowerPoint slide for their investor presentation.

Jon Speer: Yeah.

Mike Drues: So that when they get to the regulatory piece, they can basically demonstrate two things, because I also work for a variety of VC and Angel firms, and so I see a lot of these issues from both sides. You wanna demonstrate two things to a potential investor when it comes to regulatory. First, you know what your options are, and that's the easy part. But the second is that you, meaning your team, has the knowledge and experience to roll with the punches because in the regulatory world, it's very dynamic. And let's just take the 510(k) as an example. There are many devices that have come to the market here in the United States under the 510(k) 10 years ago, maybe even five years ago. And if the same device came to the FDA today with exactly the same submission, it might not get through. And so the question is, what has changed? Has the regulation changed? Well, no, in my opinion, the regulation for the 510(k) has not changed really at all since it was created in 1976.

Jon Speer: Right.

Mike Drues: But what has changed is the level of scrutiny, if you will, that FDA is applying to certain parts of that submission. So all of this stuff goes into the general category of what I call regulatory strategy.

Jon Speer: Alright, well, that makes good sense 'cause I do think people are very confused when... I think you're right. I think they want that information they can drop into their PowerPoint slide that says, "Our path to market is a 510(k) and it's gonna take this, and we're gonna use these as product ads," and that sort of thing. But to your point, a regulatory strategy is much broader than that. So let's go to the next level, the topic of our discussion is competitive regulatory strategy. And so let's talk a little bit about how that differs from just a regulatory strategy and how you can use this competitive regulatory strategy to your advantage from a market perspective.

Mike Drues: So that's a great opportunity to dig into this a little bit deeper, Jon. And when it comes to competitive regulatory strategy, let's perhaps, to illustrate, let's take a simple example. So let's say, a company is developing a new medical device, and it's in that gray area between class two and class three. In other words, you could make an argument that it would be a class two device and if so, it would be a 510(k) or perhaps a De Novo or alternatively, the same device could be a class three, meaning that it would be a PMA, or perhaps an HDE. Well, given in a situation like that, I'm sure you would agree, Jon, that 99 times out of a 100, your typical medical device company is gonna choose the 510(k) route as opposed to PMA.

Jon Speer: Yes.

Mike Drues: Because it's... They think it's faster, it's easier, it's cheaper, it's less risky, all those reasons. And I'm not saying that those reasons are untrue, what I am saying is that is very limited thinking. Because in that situation, if you take your device to the FDA as say, a 510(k), yes you might be happy, you might be making your job easier, but who else's job are you making easier at the same time? Your competition.

Jon Speer: Yeah.

Mike Drues: And so what if you say, "You know what? We could take this to the FDA as a 510(k), but let's say hypothetically, that you're working in a large medical device company and your competition is small and startup company, probably VC funded. And by the way, a large company is just simply code speak for having a lot of time and money and resources. So you could go to the FDA and sell this to them as a class three PMA. And by the way, it is much easier for me to sell a device to the FDA as a class three than it is a class two. That takes absolutely no effort whatsoever. So if I establish the bar higher as a class three PMA, now, what have I done? Now, I have just raised the bar for my competition. And if your competition are smaller and startup companies, like I said, usually VC funded, that might cause them, I wouldn't say might, that will cause them immediately to reevaluate their regulatory strategy and perhaps even their technology strategy. That might even cause them to shut their doors this afternoon. That's using a regulatory strategy to your competitive advantage, to using it as a tactical weapon over your competition.

Jon Speer: Okay.

Mike Drues: That's just one of many examples of this thing I call competitive regulatory strategy.

Jon Speer: Yeah, and you touched on something that might be worth exploring it a little bit further. Yeah, I think if you asked 10 medical device companies if they got to choose their path from a regulatory standpoint, they would... And the choices were 510(k) versus PMA, I suspect almost 10 out of 10. [chuckle] Certainly, an overwhelming majority would say, "I want the 510(k) path because it's faster, it's more predictable," and all these sorts of things. But we've talked a little bit about this in previous conversations and the idea, the concept of being a PMA and really allowing that to be a real business advantage to you, how many companies do you think really have the appetite for that? Do they think you're crazy when you suggest [chuckle] that to them?

Mike Drues: Well, whether they think I'm crazy or not, I'm not sure. Some of the greatest thinkers in the course of human history were considered to be wack-a-doodle in their own time. But seriously, Jon, let me respond this way because you are bringing up an excellent point. This is very, very much like a salmon swimming upstream.

Jon Speer: Yeah.

Mike Drues: There is an entrenched mentality within this industry that a PMA is inherently more work, more difficult, more time, more expense, and so on, than a 510(k). And I'm sorry, I just don't see it that way. One of the many things that differentiates my approach to this compared to so many others is that the amount of work that we need to do to bring a new medical device onto the market in terms of the testing that we have to do, the bench top, the animal, the clinical, the computational, what have you. All of that work should be predicated on the biology and the engineering. In other words of which it should be based on the disease. It should be based on how well established the technology is. It should be based on the risk. It should be based on all of the biology and engineering. It should not, underline not, be based on the regulatory pathway.

Mike Drues: I think the regulatory pathway is nothing more than the package that we put this information into, in order to present it to the FDA. So in other words, I might have one set of testing that I do for a medical device and I put it in one box with one particular kind of wrapping paper and bow on top that's stamped 510(k). And I might take the exact same testing data and put it into a different box, a different package, a different wrapping paper and bow, and stamp that as a PMA. And it gets really fuzzy in that area in between. For example, as you know Jon, more and more 510(k) devices coming to market are requiring clinical data.

Mike Drues: So at the end of the day, if you're gonna be doing a 510(k) with a clinical trial, is there really much of a difference than just doing a PMA? Yes, there are some paperwork differences of course. Yes, you have some manufacturing differences. For example, there is a requirement in the PMA that you include manufacturing information in your PMA submission. That requirement does not exist, at least not yet, in the 510(k), although there has been discussion at FDA, some of it facilitated by me, about adding that requirement to the 510(k). I personally think it's not a bad idea. There are a few administrative differences, but at the end of the day is there really a big difference to most companies between doing a 510(k) with the clinical trial versus a PMA? I think probably not as people might think.

Jon Speer: That's a really good point. And a couple of other things on this topic that might make sense to get into. Guidance documents, there are all kinds of guidance documents for all sorts of things. And I know you and I have chatted a bit about that in the past and I recall you sharing a story. I don't remember if it was a pre-sub but you had some meeting with FDA and there was some discussion about a particular topic. And, of course, I'm paraphrasing and I might have some of the details mixed up, but I remember you sharing that, that there was some discussion about a particular thing. And I don't remember what that thing is off the top of my head. But the information that FDA was providing during this discussion was counter to what was in their own guidance document. And I recall you, I don't know if you had a hard copy of it, but I remember you pulling out that guidance document as a reference and pointing out and citing specific parts of that guidance document during that discussion. So talk a little bit about how you can use guidance documents as a competitive weapon in those types of discussions with FDA and in submissions.

Mike Drues: Well, I'm very flattered that you remember that story, Jon. That was, I think, several podcasts ago. I think what you were referring to is the Real World Evidence Guidance that FDA put out just last year where I literally held it up and said, "Harrison this new guidance that is telling us to do exactly what we're proposing to do and you're telling us that we can't do it." So thank you for remembering that. That actually is perhaps not a great example of competitive regulatory strategy. So let me give you another one to add to your repertoire. So using guidance as a tool is also something that I think many people really overlook or, quite frankly, never even think about. And so let me share with you a not so hypothetical example. So let's say you're working on a device that is new and novel, that there is nothing like it, and you're bringing it onto the market as a 510(k), De Novo, PMA, what have you. One of the opportunities that you have is to develop testing methodologies, bench top, animal, clinical, and what have you, in order to show that your device is safe and effective. Well, the challenge, and I used to spend a lot of my time as a young R&D engineer in this business a long time ago doing exactly this.

Mike Drues: One of the challenges is how do you design that test methodology so that it's favorable to your product and at the same time makes it more difficult for other companies to match your result. If you can design your test methodology to do that and that test methodology goes into your submission. Remember, this is a new novel product so there is no guidance for this kind of a product yet. The way FDA typically puts together guidance... Now, I'm talking here mostly the product development guides, not guidance for a clinical trial, and so on. They take a look at the first few submissions. And I'm often part of this process myself. They take a look at the first few submissions into an area and they pick out the test methodologies, for example, that they like and those go into what then becomes the guidance.

Mike Drues: And so what happens if your test methodology now goes into the guidance? Now not only have you gotten your device onto the market, but at the same time, you've made it more difficult for your competitors to bring their devices onto the market because they will have to do what is in that guidance. Now of course, this is purely hypothetical. How could you prove it? Well, I have to be a little careful what I say here, but I did publish this in an article. I'd be happy to send it to anybody if they send me an e-mail. Let's say that you describe that test methodology in your submission in a grammatically awkward fashion. Not grammatically incorrect, but it's something that native American English speakers would probably not say it that way. And eventually, sometime later, that test methodology shows up in the guidance with your grammatically-off, awkward phrase, describing it. Could that still be coincidence? Of course it could, but I think probably not.

Mike Drues: I probably shouldn't say this in a recorded podcast, but it's not just my graduate students who have mastered the ability to copy and paste. My friends at FDA and in companies as well. So using guidance as a competitive weapon to make it more difficult, it's certainly not as strong as something like a patent, like intellectual property, but making it more difficult for people to follow in your footsteps. Once again, at least in my experience, Jon, most of my regulatory colleagues, they don't even think in those terms.

Jon Speer: Right, that's a really good point. Well, Mike, I know there's a few other twists and turns when it comes to a competitive regulatory strategy. I know there are some other types of submissions. Just like we talked about, the PMA, 510(k) angle. I can imagine there's a similar angle from a De Novo standpoint. And I don't know, we recently talked a little bit about 510(k) versus 513 [g] and De Novos and that sort of thing on a previous podcast too, and certainly encouraged the audience to go check that out to get a little bit more insights about that. But I can imagine that a De Novo might be another type of advantage similar to the angle from a PMA. But are there some differences that you might see from a De Novo and why one would consider that? Because it used to be, and I know I don't think it's the case today, but it seems like it used to be if your product was a De Novo, it was almost like death to the project. It wasn't gonna go any further 'cause it was gonna go in some sort of purgatory at FDA. But that's really not the case these days, is it?

Mike Drues: No. The De Novo is becoming more and more popular, Jon, which I think is a good thing, based on changes that Congress made in the law about five or so years ago now. So simply put, a lot of people... Everybody knows that the 510(k) is the workhorse of this industry; no question about it. But what a lot of people assume is because it is used... Sorry, the reason why it isn't used so often is because it's the best. And I do not make that assumption. McDonald's is one of the most successful restaurants in the world. Is it because they make a good hamburger? Probably not.

Mike Drues: So just because everybody uses the 510(k) doesn't necessarily mean that it's the best, and certainly not in all situations. The De Novo, on the other hand, offers some very significant advantages, especially under the category of competitive regulatory strategy, not the least of which is you're starting out with, as I describe it, a blank slate, a blank canvas, when it comes to the labeling. And you can paint onto that canvas anything that you want.

Mike Drues: So let me make this as simple as I can. The 510(k), you can spend it in many different ways, but at the end of the day it comes down to one thing. You have to show that our device is basically the same, ie, substantially equivalent in terms of labeling and technology as the competitor, as the predicate device. Sometimes that's easy to do, sometimes it's not. But with the De Novo, we don't have that limitation. We can paint onto that labeling canvas, if you will, anything that we want. And once again, this gives us the opportunity to set the bar higher.

Mike Drues: One of the examples I use from my own experience is, several years ago, a company came to me with a sterilization kind of device. They were tempted to bring it onto the market as a 510(k), and there would be nothing wrong with them doing it, but they would have created, essentially, a "Me too." In other words, there would be nothing different of their device compared to the 50-plus other devices out there that do the same thing. So I said, "Tell me a little bit about your technology." Well, long story short, they were able to achieve the same level of... I'm sorry, they were able to achieve the same level of sterilization at a significantly lower temperature point.

Mike Drues: So what I suggested to them, which is exactly what we did, is we include that technology claim in our high-level labeling and do that as a De Novo. It would be more difficult to do it as a 510(k). Not impossible, but more difficult. But we did it as a De Novo. And now what have we done? We got that device onto the market. One of the downsides of a successful De Novo is that it creates a predicate that somebody else can use as a 510(k).

Mike Drues: But we can make it more difficult for them to do that if we include that technology claim, "We achieved sterilization at a lower temperature." Now they cannot use our device as a predicate unless and until they meet our technology. And oh, by the way, if we own the IP on that technology, that ain't gonna happen any time soon. So once again, this is... Perhaps I'm biased because this is my idea, but this is a very savvy way to use regulatory strategy, in this case for a De Novo over a 510(k) to have a competitive advantage.

Jon Speer: Yeah, those are some really good insights, and folks, I assure you that this topic, you could spend all day talking with Mike about competitive regulatory strategy and he's got a lot of tricks and tips that he can help you with that and so, we're just skimming the surface today. So Mike, any closing thoughts on this topic of competitive regulatory strategy for today's podcast?

Mike Drues: Well, I would just leave the audience with one final thought. And this is something that I've shared with you in some of our other podcasts, and I don't mean this to be arrogant by any means, but I do say it to make a very important point, and that is every... I'm sorry. Average regulatory professionals know the rules, but the best ones know the exceptions. So the challenge for your audience is not to simply follow regulation blindly just because everybody else has done it. I mean, if that's to your advantage, then fine, nothing wrong with that. But always be asking yourself, is there another way? Is there a different way? Is there a better way that I can do this? Or at least something that I can consider? And specifically on the topic of competitive regulatory strategy, because I have set out, as Jon pointed out, earlier, a lot in this area. If anybody wants to send me an email, I'd be happy to send you some resources. Some of them are publicly available, some of them are not, to learn more about it because I think, as I said, this is at least in my experience, not something that many people really, really think about.

Jon Speer: Yeah, I agree. Folks, Mike's spot on. I suspect that many of you have this approach where you're just looking for that path to market, and regulatory strategy, especially competitive regulatory strategy, is much more sophisticated than just figuring out the quickest and shortest, least burdensome approach. There are some opportunities for you to consider this regulatory strategy as a competitive advantage for your product and for your business. So, if you'd like to learn more...

Mike Drues: Hey, Jon, perhaps just one more last thing to quickly interject in terms of competitive, because I guess as my wife would probably say, I'm a pretty competitive person and I've used this metaphor in some of our discussions as well. But I view the entire relationship between the company and the FDA as a poker game in every sense of the word. And just because somebody understands the rules of poker, doesn't necessarily mean they're gonna be a good poker player and it certainly doesn't mean they're gonna win the game. I want to do everything that I can legal of course. I don't wanna be wearing any orange jump suits in order to win the game, and competitive regulatory strategy, is by definition part of winning that game. As a matter of fact taking that metaphor a step further. I don't want to just win the game. I want to try to make it more difficult for players to get into the game in the future. That's the point I wanted to make.

Jon Speer: Okay. That's a really good... Yeah. No, that's a really good point, really good point to end on today too. So Mike, thank you for sharing an overview of competitive regulatory strategy. And folks and again, at greenlight.guru, we're out there changing the world just like Mike Drues of Vascular Sciences, and if you wanna be part of that change to improve the quality of life and make sure that you're doing things in a competitive way, but in a way that makes good sense, good prudent engineering sense, when it comes to especially things like your quality management system and your design controls and your risk management activities, of course, you can go copy and paste all that you want, just like Mike said for your regulatory standpoint, but that doesn't take a lot of thought and a lot of effort and it doesn't give you a competitive advantage. So, I would encourage you to go to greenlight.guru, check out what some of the most innovative companies in the world frankly, are doing these days and that's using the greenlight.guru platform to enhance their compliance and get their products to market a little bit faster, while having all of their data and information and documentation records in a single source, the truth, known as greenlight.guru.

Jon Speer: So, check it out and you might find another opportunity to yet have more of a competitive advantage in this extremely competitive market space. So again, thanks to Mike and this has been Jon Speer, the host, founder and VP of Quality and Regulatory at greenlight.guru and you have been listening to the Global Medical Device podcast.

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