CE Mark is Good, FDA Clearance is Great

Monday, June 08, 2009

"It may be a significant commercial milestone, [but] it is a weakness for start-ups to not think of the FDA from the outset and if you have not done the proper work for the FDA from the beginning, you will find yourself going back to scratch. The differences between the CE requirements and the FDA requirements are enormous, as anyone who has done both knows perfectly well"

EuroMedtech 2009 got underway last week and this report summarizes what sounds like a very illuminating panel.  In it, leading European investors discussed the importance of a solid, early US regulatory strategy to European IVD companies.  If it's important to consider in Eurpoe, it's even more so here in the US.

The work required to obtain a CE Mark is quite different than the work required to obtain FDA clearance or approval.  EU regulation of IVDs is, in many respects, easier to cope with than US regulation.

As this story points out, however, the easier system is not quite large or profitable enough to justify major investment.  One money quote from a VC put it this way: "One of the weakness for European companies is to view the CE mark as a significant milestone.”  Ouch.

Lately, I've had a number of conversations with US companies where they want make an economic argument to FDA.  In essence, they want to tell FDA that current regulations are too burdensome and that this puts the US at a competitive disadvantage with the EU where market entry is easier.  I know that argument is not going to get them anywhere, as nothing FDA does prevents them from entering the European market.

Perhaps, however, this story suggests a deeper truth that is worth appreciating.  Perhaps it is because of our regulation of the medical marketplace that it is such a valuable space to do business.  If FDA is increasingly being seen as the gatekeeper to success in Europe, isn't it perhaps time to recognize that our regulators might be doing something right?

Everyone agrees that living in a regulated marketplace is difficult, expensive, time-consuming work.  But if you hold up Europe as a vision of what lower standards might produce, don't expect much sympathy from FDA.  They're seeing a lot of products come over from Europe and this article confirms what I've seen anecdotally: there are probably a lot more on their way.

Tags: EU, FDA, VCs and Investors

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