The world of medical device manufacturing will be a thrilling and challenging space in 2020 as record-breaking revenues, ever-changing regulatory conditions, technology innovations and promising new market opportunities collide. The industry grew at a record 7% clip in 2019 — a nine-year high — and total global revenues are expected to reach $483.4 billion in 2020.2 This article will look at some of the trends anticipated to make a substantial impact on the medtech sector in 2020 and offers suggestions about how manufacturers can best position themselves to roll with and benefit from those changes.
In September 2019, Dr. Amy Abernethy, principal deputy commissioner at the U.S. Food and Drug Administration (FDA), unveiled a new three-point plan for how the agency will conduct business with life sciences manufacturers in the near future.3 In short, it will be digitally through the cloud.
contract manufacturing expected rate of growth 8.5% between 2019-2030
Though the global demand for medical devices continues to spike due to the rising prevalence of diseases, higher life expectancy and expanding markets, device makers are simultaneously also seeing lower returns on investment as in-house manufacturing becomes more costly.4 Outsourcing to contract manufacturing organizations (CMOs) is an attractive and often vital alternative.5
1,099 companies in 2017
5,000+ Companies in 2018
With the full implementation of the Medical Device Single Audit Program (MDSAP) in 2019, the medtech world is abuzz about the potential of the harmonized regulatory approval process. Though MDSAP audits are more stringent and require more company staff and resources, participating manufacturers benefit from fewer audits, which equates to less business disruption.
As the health care industry continues to evolve due to disruptive technologies such as big data, predictive analytics, cloud, blockchain and many others, the resultant colossal increase in the amount of data companies handle presents a sizable opportunity for medtech. A combined study by IDC and Seagate shows that health care data is projected to have a compound annual growth rate of 36% through 2025, a faster rate than manufacturing, financial services or media.8 That exponential growth of data is expected to be a tipping point for med device manufacturers.
$30 to 90
Billion by 2025
In health care, digital health, including wearable fitness devices is estimated to be worth $30-90 billion by 2025.
Rapid and continual advances in technology are changing everything about the way we live, from smartphones to social media, to how we conduct financial transactions. In health care, digital health, including wearable fitness devices (estimated to be worth $30-90 billion by 2025) and software as a medical device (SaMD), which can perform complex medical functions, are a significant slice of that digital disruption.10
MasterControl’s business excellence solutions serve as the foundation of quality and compliance for hundreds of medical device companies worldwide. Providing much more than enterprise quality management system (EQMS) automation, MasterControl allows companies to efficiently manage the entire life cycle of a device from design, development and clinical trials all the way through to postmarket surveillance.
“How Can Medtech Help Deliver the Data and Value Healthcare Needs?” by Daphne Allen. MD+DI Online. Sept. 24, 2019.
“Total global medical technology revenue from 2011 to 2024” by Matej Mikulic. Statista. Oct. 25, 2018.
“FDA unveils new plan to modernize its technology – and make more efficient use of data” by Matthew Herper. Stat News. Sept. 18, 2019.
“Medical Device Contract Manufacturing Market 2019 Global Industry Trends, Share, Size, Demand, Growth Opportunities, Revenue, Analysis and Forecast to 2030” MarketWatch. Sept. 30, 2019.
“Managing a Complex Life Sciences Supply Chain” by Annie Marie O’Hallorhan, Barry Heavy and Greg Ciccarelli. Accenture Life Sciences. 2019.
“Canada’s Switch from CMDCAS to MSDAP Went Off Without a Hitch – Despite 403 Companies Leaving the Market” by Shawn Schmitt. MedTech Insight. Feb. 1, 2019.
“Single audit program available to 5,000 companies” ASCOM/ANVISA. Nov. 11, 2019.
“New Revenue Streams in Health Data Monetization” TATA Consultancy Services. 2019.
“As data personalizes medtech, how will you serve tomorrow’s consumer? Pulse of the industry 2019” Ernst & Young (EY) Life Sciences. 2019.
“Top Technology Trends in Healthcare” by Dan Greenfield. SelectHub.
“2019 Global life sciences outlook. Focus and transform: Accelerating change in life sciences” Deloitte. 2019.
“What the Apple Watch’s FDA clearance actually means” by Angela Chen. The Verge. Sept. 13, 2018.
“Software as a medical device: An agile model for food and drug administration (FDA)-regulated software in health care” Deloitte.
In September 2019, Dr. Amy Abernethy, principal deputy commissioner at the U.S. Food and Drug Administration (FDA), unveiled a new three-point plan for how the agency will conduct business with life sciences manufacturers in the near future.3 In short, it will be digitally through the cloud. With technology advances exponentially increasing the volume of data regulators manage, maintaining the status quo simply wasn’t sustainable.
In essence, the FDA’s Technology Modernization Action Plan (TMAP) will allow companies to send regulators data and reports directly from the company’s database instead of packing files into a PDF. The program also aims to modernize the agency’s technology infrastructure, ensure highly secure data transfers, and fundamentally change how the FDA uses data and software to streamline current processes. Finally, the FDA wants to promote better and more tech-friendly ways for regulators and companies to interact and collaborate.
The FDA’s TMAP reflects a seismic shift as life sciences and other manufacturers worldwide embrace the digital transformation to raise quality and compliance levels while reducing costs and waste. Medtech companies are finding they simply can’t compete in today’s marketplace without moving to automated solutions that help increase production rates and operational efficiencies. One such solution is MasterControl Quality Excellence™, an integrated, digital quality management system (QMS) that tracks quality and compliance in real time at every stage in the product life cycle. And since Quality Excellence is cloudbased, companies always have the latest features, security updates and the comfort of knowing your data is accessible, connected and secure.
Though the global demand for medical devices continues to spike due to the rising prevalence of diseases, higher life expectancy and expanding markets, device makers are simultaneously also seeing lower returns on investment as in-house manufacturing becomes more costly.4 Higher manufacturing costs combined with the technical and regulatory challenges stemming from more complex and highly personalized devices have made outsourcing to contract manufacturing organizations (CMOs) an attractive and often vital alternative.5 As a result, medical device contract manufacturing was estimated at $52 billion in 2018, and analysts expect it to continue to grow at an 8.5% rate between 2019-2030. Moreover, a recent Accenture study showed that 91% of life sciences manufacturers plan to increase their use of CMOs.
However, the outsourcing route is not without room for improvement. In the same study, 78% of life science companies indicated they want to improve collaboration within their quality management processes with their CMOs. To overcome these pain points, medtech companies need to transform the way they collaborate with and share data with partners.
A digital production records solution like MasterControl Manufacturing Excellence™ replaces the manual, paper-based device history records (DHR) process with an electronic DHR that can be tracked and managed to ensure that data is accurate and complete. The solution’s abilities to integrate with existing production systems means fewer data errors, delays and wasted lots. Thus, digitization increases visibility and coordination between partners and helps ensure proactive, real-time quality assurance for products as opposed to reactive and costly quality control.
With the full implementation of the Medical Device Single Audit Program (MDSAP) in 2019, the medtech world is abuzz about the potential of the harmonized regulatory approval process. MDSAP allows a medical device company to undergo a single audit by an accredited third party that satisfies quality regulations in member countries that currently include the U.S., Canada, Brazil, Japan and Australia.6 Though MDSAP audits are more stringent and require more company staff and resources, participating manufacturers benefit from fewer audits, which equates to less business disruption.
In Brazil, where roughly 50% of companies use the MDSAP pathway rather than the country’s Agência Nacional de Vigilância Sanitária (ANVISA), MDSAP participation spiked from 1,099 companies in 2017 to more than 5,000 in 2019.7 In Canada, Health Canada made MDSAP certification a requirement for all medtech manufacturers selling in the country. Still, though Canada’s transition to the MDSAP in January 2019 went well, 403 companies ended up withdrawing from the Canadian market. Many of the requirements of MDSAP are based on ISO 13485:2016, which the U.S. Food and Drug Administration (FDA) is planning to adopt is some form in 2020. Interest in MDSAP will likely only increase with the European Union (EU) and World Health Organization (WHO) participating as observers.
As global regulatory harmonization and coordination continue to trend, so are the quality manufacturing and regulatory spaces migrating from a paper-based, documentcentric approach to a digital, data-centric model. Medtech companies wanting to stay ahead of the curve are looking to invest in a robust, automated quality management system (QMS) that provides quality intelligence through data-driven insights.
As the health care industry continues to evolve due to disruptive technologies such as big data, predictive analytics, cloud, blockchain and many others, the resultant colossal increase in the amount of data companies handle presents a sizable opportunity for medtech. A combined study by IDC and Seagate shows that health care data is projected to have a compound annual growth rate of 36% through 2025, a faster rate than manufacturing, financial services or media.8 Similarly, the data monetization market is anticipated to reach $708 billion by 2025. That exponential growth of data is expected to be a tipping point for med device manufacturers.
The value of data to medtech companies and others is anticipated to focus on personalized, patient-centered care models that will fuel patient-consumer demand. “In a datadriven health care environment, medtech products will not have intrinsic value: their value will be commensurate with the data they generate. Data will ultimately become the most valuable product,” states a recent study by Ernst & Young (EY).9
The challenge for device makers in this new data-driven environment is to move outside their comfort zone to create new business models that capitalize on data as an industry currency. Devices will need to be designed to include interoperability and secure connectivity. This will allow companies to capture and analyze data on the fly to support more responsive and data-driven supply chains that can deliver better interventions and care management. “We are at the beginning of a digital transformation of health care. Data-driven medical devices will be at the forefront of that transformation,” said Kevin Lobo, chairman and chief executive officer of Stryker, said in the EY report.
With a virtual mountain of data, medtech companies will need to rely on dynamic automated solutions that provide data intelligence to unlock the valuable insights that can act as revenue generators. A digital, integrated quality management system (QMS) can form the backbone of a company’s data and production management systems to convert product quality data into predictive insights and real-time intelligence.
Rapid and continual advances in technology are changing everything about the way we live, from smartphones to social media, to how we conduct financial transactions. In health care, digital health, including wearable fitness devices (estimated to be worth $30-90 billion by 2025) and software as a medical device (SaMD), which can perform complex medical functions, are a significant slice of that digital disruption.10 In the U.S. alone, digital health startups in Q3 of 2018 raised $4.5 billion and total digital health technology investments in 2018 reached a record $14.6 billion.11 Digital health tech reached a milestone in September 2018 when the U.S. Food and Drug Administration’s (FDA) cleared the Apple Watch 4 with its heart-beat monitoring ECG app as a Class II SaMD.12
With tech giants like Apple, Amazon and Google jumping into the digital health device space and establishing a strong consumer base, regulators knew they needed to quickly come up with a strategy to evaluate new SaMDs in a way that wouldn’t overwhelm their limited resources.
In response, the FDA created the Digital Health Software Precertification (Pre-Cert) pilot program and issued Software as a Medical Device Clinical Evaluation final guidance to ensure the public has timely access to high quality, safe and effective products. Taking a page out of the U.S. Transportation Security Administration’s (TSA) book for expedited, more hasslefree passenger security, aka “TSA Pre,” the Pre-Cert program takes a risk-based and accelerated review process approach to low-risk SaMDs. It essentially looks “first at the software developer or digital health technology developer, not the product.”13 Based on a company’s demonstrated commitment to a culture of quality and organizational excellence (CQOE), Pre-Cert device clearance is contingent upon a SaMD developer providing key pieces of pre- and postmarket data that provides continued confidence in a product’s safety.
As the ecosystem for digital health innovation and regulation explodes, both manufacturers and regulators will increasingly depend on advanced technology solutions, including automated data systems, to handle larger volumes of device submissions data. Digital platforms, such as MasterControl Quality Excellence™ and MasterControl Manufacturing Excellence™ enable quality and regulatory teams to better integrate and automate data, workflows and systems across a manufacturer’s supply chain and throughout the entire product life cycle.