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Coming to America: What's it like for a medical device company preparing a launch into the US?

While watching this movie might not be very helpful to a medical device company that wants to launch their product in the US, it should make you laugh.  But there are some truths in the movie that are worth noting.  Coming to America with little preparation and knowledge can wind up with some precarious situations.  The culture is different and many of the rules, processes, and things to make the transition easier may not come naturally.

For a medical device company contemplating Coming to America, and launching, there are some obvious requirments.  Regulatory compliance with the FDA is essential to sell any medical device in the US and this includes having an appropriate QMS (Quality Management System).  There are numerous resources on this topic and this of course is one area that we focus on.

Many companies look at this hurdle as the first one to overcome in preparing to launch in the US.  While it’s necessary, I often question, should it be the first step?

Let’s consider what the end goal is.  For 100% of our clients, the primary goal is to sell their product in the US.  Gaining regulatory approval does not mean success in the market.  So what are the questions that need to be answered and how should we consider accomplishing that?

First question:  Is there a market?

Just because the device might have been successful in other markets, or even because the device has a benefit to the patient, does not necessarily mean it will be purchased in the US market.  There are multiple aspects to consider.  It’s not as simple as “the surgeon will want this.”  That could be true and it’s important to have a champion that wants the product.  This is usually a physician, nursing, or in some cases may be administration that makes their life easier.  But it’s unlikely the champion is paying for the device.  So one has to always look at the economics of a purchasing decision.  What value does it bring to the purchaser?  Is it replacing something else?  These are just a few questions that will be asked.

Second question:  How big is the market?

There’s also the question of how big is the market.  Is it an existing market or an emerging market?  Emerging markets take much longer to penetrate usually, but it also means there is a "blue ocean".  In existing markets one has to always consider the possibility that while there might be a big market, it’s already saturated and the available market is only a replacement market.  This can happen when there’s good reimbursement and replacing a device that may only be a few years old offers no return on investment to the hospital.

We generally recommend and work with our clients to perform customer discover to insure before any additional funds are spent, there is a market for the technology.

Third question:  Is there reimbursement?

This is usually key to being able to scale sales in the US.  Without reimbursement there are often times early adopters, but this usually doesn’t amount to enough to establish stability in the market.  Reimbursement is paramount and if reimbursement does not exist it’s likely that it will need to be pursued.  Here is an article on we wrote on reimbursement strategies.

Forth question: Who are the leaders in the field?

Particularly for early stage innovative devices we always recommend working with leaders (KOLs) in the field.  These leaders can often times help with everything from reimbursement, to clinical trials, but they can also be part of a medical advisory board.  This is a good article on the importance of a medical advisory board

We always recommend to embrace these leaders.  They’ve spent their career in the area that your device is relevant and they can be a tremendous value in not only helping you launch your product, but also in advising on the ongoing development of the product.

Fifth question: What are the indications for use and intended use?

This will be a primary part of an FDA application.  If there is reimbursement this must be aligned with how it’s likely to get reimbursed. We always stress to consider this very carefully including the possibility of limiting the indications for use and intended use beyond what one may consider the broadest market.  Let’s say for example the device tends to have a bigger effect on more elderly people, perhaps 65 and older, but there is also some evidence that it can have a good effect on anyone over the age of 40.  A study to include the whole potential patient population may be significantly larger and more expensive and must be weighed against the market sizes.  In some cases, it makes sense to enter the market with narrower indications for use and intended use and then add additional studies and do a subsequent filing with the FDA to expand these later.

Sixth question: Do you need a clinical trial or usability study?

Often times for FDA clearance one of these is necessary.  Usually the KOLs can assist with this or in some cases if there is the need for a large clinical study, say for a PMA application, employing a CRO (Clinical Research Organization) can help.  One thing to note though with CROs, is they are not working to build a relationship with KOLs.  Their job is to get a clinical study accomplished.  So it’s important to understand this and manage accordingly.

Seventh question:  How are you going to get your first 5 sales?

You will never scale a business if you can’t get the first 5 sales.  So what does it take to get those sales?  Who is your champion? Who or what are the obstacles to getting the sale?  Selling into hospitals is complex, and the bigger the hospital system the more complex it tends to be.  On top of that, you’re a new vendor and purchasing is not thrilled about qualifying and adding vendors.  Are you connected to the hospital network?  Is patient information part of the data connected to the network?  Another hurdle with IT and cybersecurity in the hospital to address.

We generally recommend getting these first sales directly.  You need first hand knowledge from some different institutions what it’s going to take to achieve the sale.  Channel distribution can be effective down the road once you have the formula to a successful sales transaction and have appropriate personnel to manage your channel distribution.

Eighth question:  What are the resources necessary to launch?

What kind of personnel will you need in the US initially to both sell, train and support the product.  Most clients from Europe that have been successfully selling in the EU have a pretty good handle on this.  But if one has not been selling or is very early in selling in another location, then it can be more difficult.  The sales side is fairly simple, particularly if a soft launch is the plan.  The service side can sometimes be more daunting as it often needs the expertise of engineers within the company.  How will service calls be handled initially and ultimately resolved?  How much additional staff is needed to accomplish this?  Once these questions can be answered with least to a reasonable level of certainty, a financial proforma can be developed for resource planning.

Ninth question:  What did I overlook?

This is one of the most important questions.  The first eight questions will seem somewhat obvious and necessary to launching a medical device in the US, but what are the things in order to execute have been overlooked.  These are often the details that can be critical if not addressed.  Many of the details have to do with some basic aspects of selling medical devices in the US.  First there is the issue of having an Initial Importer by the FDA.  This is similar to a Notifying Body in the EU.  One solution is to set up a subsidiary of the parent company, but there are other solutions involving outsourcing this to companies based in the US.  Should one consider manufacturing or doing final assembly and testing in the US?

There are HR (human resource) requirements and compliance for HR.  These can include certain legal requirements, such as having appropriate workers comp insurance to paying and withholding required payroll taxes.

Some other items that must be considered are generally liability insurance to protect the company should anything go wrong.  It is usually required by hospitals purchasing the product.  They want to be sure they are protected should anything malfunction.  Logistics and planning how to ship, receive, and install the technology as well as have timely training are additional considerations.  Lastly, there are other taxes and registrations required including sales tax, medical device tax, and possibly import taxes and duties.


I’d love to say this is a full comprehensive list of everything that needs to be considered when planning to launch a medical device in the US, but it’s not.  It is a good high level overview of the main areas that need to be considered and hopefully is helpful to anyone on the journey of Coming to America!


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