Free enterprise: innovation in Europe

Small or micro collaborations between healthcare professionals, academia and SMEs result in a high proportion of new medical device innovations, particularly those that break with convention. But the small, entrepreneurial companies behind these disruptive technologies need a bit of a helping hand to get their products to the marketplace.

Typically, they require assistance from their larger, global counterparts that are equipped with both impressive distribution networks and deep pockets. And luckily, these well-established medical technology companies are looking to SMEs to bring innovation into their organisations. "It's a very symbiotic relationship," says Sharon Higgins, chairwoman of the Eucomed SME Task Force and director of the Irish Medical Devices Association (IMDA). Once the innovation has been created and harnessed, the start-up entrepreneurs then tend to move on to new products and companies, helping to drive the industry.

Unfortunately, there are many more factors at work throughout the process of bringing an innovative medical product to market than have been outlined in this brief summary, which was why the SME Taskforce was set up in 2010.

The National Associations Network of Eucomed, of which IMDA is a member, felt that smaller medical technology companies across Europe were facing a number of challenges bringing their innovations into the mainstream and that these could be addressed effectively through the umbrella of Eucomed. The SME Task Force was born and has since conducted a preliminary survey of the European medical technology industry, which identified more than 7,000 medical technology SMEs in Europe and gave a better understanding of the daily challenges they face. The survey also resulted in four key recommendations for the European Commission (EC), recommendations on which the task force has asked the EC to take immediate action.

A clear path to market

The first recommendation calls for 'a coordinated and transparent programme of market surveillance by member state authorities targeting specific product groups to ensure a level playing field for both EU and imported medical devices'. "We have some concerns that the system is not as transparent for imported products as it is for local companies, which could lead to a competitive disadvantage for European companies," Higgins explains.

"It's very important that the same regulations apply to all companies, both for the safety of the citizens and to enable start-up companies to compete against international competition."

While Higgins believes this issue will more than likely be resolved under the new medical devices framework, she also knows it could be 2020 before the framework will be in place. "We'd obviously like to see things happening quicker," she confesses. "We'd like to see the member states conducting coordinated and transparent programmes of market surveillance as soon as possible."

What Higgins sees as a very positive development is the rate at which the regulatory bodies are catching up with the industry thinking. "The most recent council conclusions on innovation in the medical devices sector actually covered a number of the areas we had raised," she notes. "There's an understanding that regulation will impact more on smaller companies that don't have the resources of global businesses."

A novel idea

Recommendation number two refers to the inception of 'a "smarter" regulatory process whereby novel technologies can be commercialised faster to give patients faster access to innovative treatments. "Product development and innovation tend to move quicker than regulation," says Higgins. "So while the systems in place must put the needs of the patient first and foremost, they must move rapidly as well.

"We need to be very careful that there is a very 'smart' process, which brings together all the collaborators - the notified bodies and the competent authorities - to ensure that the essential requirements for the innovative technology are there but also that we don't have an overly bureaucratic process. The regulators need to understand the way the product development process works and support the entrepreneurial start-ups."

Higgins has spoken to companies that have created incredible products but have been unable to get them to the marketplace because of regulatory hiccups, such as not being able to afford the clinical trials required.

Nonetheless, there are some huge positives for Europe's regulatory structure, which have been cited by Professor John Linehan (Northwestern University, US) and Jan B Pietzch (Stanford, US) who discovered in a recent survey that 64% of small device and diagnostic companies consider Europe to be the most predictable for regulatory approval, while only 8% could say the same of the US. "We want to see those positives maintained while at the same time enabling new product commercialisation to take place," says Higgins.

Show me the money

'Easier processes for applying for EU R&D Funding Programmes, including the Framework Programme and Cohesion Funds, and options that allow SMEs to effectively access these funds are required, according to the task force's third recommendation.

While there is already an enormous amount of money available through the Framework Programme, the key thing for Higgins is that these resources can be very difficult for SMEs to access. "They can be very successful if they get the right partners or if they're in the right programme, but there's a huge administrative burden required for them to get involved," Higgins explains. "It's about providing SMEs with an additional level of support. This could mean showing an understanding of the fact that there are different stages of development that funding is needed for and that contributions must be paid very quickly. This came through very strongly in our survey: companies cannot wait six months to get funding; they need it upfront or they can't pay people to work in their organisations."

When it comes to funding for SMEs, the US sets a great example. In the current European Framework Programme, all private sector participants are treated the same, regardless of size or scale, and all receive 50% funding. But the Small Business Innovation Research (SBIR) programme in the US offers 100% funding for start-up companies. "It doesn't require them to be involved in large partnerships at a very early stage and it can really help to get them off the ground," Higgins remarks.

Share and share alike

Eucomed's final recommendation calls for 'proactive sharing of information by Member State Competent Authorities on market access models and distribution channels to enlarge the overall market within the EU'.

"If an SME believes it has the right product and it can get the investment and the funding, distribution becomes an enormous barrier," Higgins notes. "The channels are very difficult to build; they take a lot of time, energy and effort. One option is for SMEs to divest of their company or partner with a very large organisation to gain access to their distribution channels, but for some companies it would be useful to grow through their own network. The barrier to this is really just information."

On this point, Higgins is keen to emphasise that the calls to action are not only aimed at the EC; they're also calls on the industry itself. "This is one of the areas we feel that we - as Eucomed through the SME Task Force and the National Associations Network - can actually work to support our members," she adds.

Information is power

In the first sentence of this article it's stated that a 'high proportion' of new medical technology innovations come from SMEs. Unfortunately, this was the closest estimate Higgins could offer because the information simply isn't available. When asked which of the recommendations described above is the most important for SMEs in Europe, she came back to this point.

"Our overarching call is for the commission to work with us as an industry to develop an in-depth survey so we can really understand what's going on in detail," she says. "We'd like to have a benchmarking programme in place that would allow us to be clear about what's happening over a period of time.

"In parallel, the specific areas we've mentioned here should be dealt with, but in order to understand how successful they are and what additional actions may be required, that survey will be critical."

The task force hopes to be able to discover the number of companies, the types of product areas they are involved in, the leadership models at work and what individual barriers companies are facing. "This is not a standstill exercise," Higgins adds. "It's much more than a one-off survey. We see it as something that will support the health and wealth of Europe. It could have a huge impact."

Case studies

In answer to Sharon Higgins' call for information, we interviewed the CEOs of two Europe-based SMEs about the obstacles they have faced in getting their innovative products to market.

John O'Dea

John O'Dea is CEO of Crospon, an Ireland-based company that develops minimally invasive medical devices for imaging and aiding surgery in the oesophagus and stomach.

Do you have any concerns about the current European regulations in terms of inhibiting the commercialisation of novel technologies?

The clinical trial requirements in Europe are built around class III devices, which means there is no clear clinical pathway for low-risk devices. Documentation is directed at randomised controlled trials so we don't have the risk stratification in Europe that there is in the US (IDE/NSR).

What challenges do European companies face getting access to funding?

Everyone has challenges getting funding, but I believe there's a gap in the middle market. It's hard to get those types of projects funded. In Ireland, for example, there's plenty of venture capital money but it's hard for niche markets to access it. My company has been funded by a combination of private funding and state-based funding, including Enterprise Ireland and the Wellcome Trust.

Ewan Phillips

Ewan Phillips is CEO of Deltex Medical Group, the company behind the CardioQ-ODM oesophageal Doppler monitor (ODM), which changes the way doctors are able to care for patients having major surgery or in intensive care.

Do you have any concerns about the current European regulations in terms of inhibiting the commercialisation of novel technologies?

We have recently received a powerful recommendation from NICE in the UK based on robust evidence of improved outcomes and reduced costs. While other EU countries are moving towards greater reliance on health technology assessment, it appears we may have to go through multiple similar processes, which are slow and expensive, to cover the whole EU.

What challenges have you faced getting access to funding?

We narrowly missed out on R&D funding in the last FP7 round despite spending considerable time and money on a well-structured application. We will now have to wait a year for the next round but with no greater clarity on what will succeed. Greater transparency on how bids are scored is essential.