Survey Shows Regulatory Concerns Rank Highest in Device Industry

Posted 22 February 2013 | By Alexander Gaffney, RAC 

Members of the medical device community are concerned about the enormous difficulties of keeping up with regulatory burdens and an increasingly difficult set of regulatory agencies to deal with, reports a new survey.

Survey Highlights Views of Regulatory, Quality Professionals

The survey, of 3,509 industry professionals, was conducted by the Emergo Group, a global regulatory consultancy.

While perhaps not the most scientific of all studies-the sample was obtained through an "in-house list" maintained by Emergo, and certainly wasn't random-Emergo said the number of responses nevertheless provides a "high-level snapshot of the industry's current condition and its prospects over the coming year."

The survey is perhaps of most use for the regulatory affairs community, which Emergo said constituted the majority of its survey respondents. "Due to the nature of our business, QA/RA professionals make up a much higher percentage of respondents than they would otherwise represent in the industry as a whole," it said.

Regulatory Concerns Rank High

So what are those regulatory and quality professionals most concerned about? Not surprisingly, a changing regulatory environment. Forty-four percent of respondents to the survey said regulatory changes were the most challenging aspect of their jobs, followed closely by new product development challenges (41.8%), which often encompass regulatory pressures.

Money issues were also prominent on the list, with 40.6% citing access to capital as being a chief concern, and 33.3% citing pricing pressures. Regulatory professionals can often be integral to both considerations, particularly when access to capital hinges on successful product development and reimbursement, which 18.8% of respondents cited as being a challenge.

One interesting note: Smaller companies actually reported being less concerned about the changing regulatory environment, with 47.4% of respondents with 1-9 employees expressing concern compared to 67.3% of larger (250+) companies.

Overall, though, regulatory environment pressures were felt most acutely in the US, where 58.3% of respondents reported that the area represented a challenge, compared to 46.3% in the EU/Africa, and 54.2% in the Asia Pacific region.

Regulators also sounded off against what they said were negative trends in many markets. Of 1,350 responses collected, 42.7% said China's regulatory regime had gotten worse in the last year, while 41.8% said the same of the US, 33.7% of Brazil, 29.6% of the EU, 19.7% of Japan and 14.3% of Canada.

That being said, 48.3% agreed with the statement that the US Food and Drug Administration (FDA) is "taking positive steps toward making the regulatory process easier and more transparent." A large percentage-31.7%--were just as inclined to disagree with that statement, however.

Positive Outlook on 2013 in Spite of Device Tax

Survey respondents reported being overwhelmingly positive about their prospects for the industry in 2013, with 71% saying they were either "very positive" or "somewhat positive" about the overall business environment. Just 12% said they had a "very negative" or "somewhat negative" personal outlook, while 16.9% were either neutral or unsure. Emergo said positive responses were up four percentage points from the year prior, in spite of global economic uncertainty.

The results could be construed as being all the more surprising given the impending onset of the medical device tax, which came into effect in 2013. Many in industry have been sounding the alarm about the tax, saying it could lead to layoffs and reduced innovation, and trade groups have been actively pushing for its repeal. US-based survey respondents overwhelmingly cited the tax as being a negative influence on their business (64.6%), while 19.8% said it would have no impact. Just 2.1% said it would actually have a positive impact on their operations. Thirteen and a half percent were unsure of its effects.

Companies said four tactics would constitute the bulk of their responses to the tax: increased prices for customers (41.6%), cutting production costs (31.1%), less investment in R&D (11.7%) and layoffs (11.1%). Cost cutting could become a regulatory problem for some, as regulators have identified similar cost-cutting trends in the pharmaceutical industry as being behind increased quality problems resulting in patient harms and the need for more recalls. Emergo's study, however, did not assess this point.

Reasons for Optimism: Global Growth

A drill-down into the data shows that American-based medical device professionals are indeed considerably more negative than their global counterparts. Sixteen percent of North and South American professionals cited either very or somewhat negative feelings about the industry's prospects in 2013, considerably higher than the 9.4% of European and African or 4.6% of Asia Pacific respondents.

They could have good reason to be optimistic, though. Respondents reported that 56.1% of respondents said their sales had increased in 2012, with just 8.5% saying sales had decreased. Thirty-five percent were unable to disclose that information, but even if every single one had reported worse sales than the year prior, the total would not outweigh the other respondents.

These sales, the survey says, are likely to occur the most in Asia and South America-the two markets seen as having the highest growth potential by survey respondents. This is reflected in where respondents said they are most likely to introduce a device or in vitro diagnostic device for the first time in 2013: Brazil (18.7%), China (16%), Mexico (13.6), India (13.1), Russia (12.5), Saudi Arabia (10.6), Argentina (9.7%), South Korea (9.7%), Turkey (8.9%) and Singapore (8.9%).

More than 60% of respondents said they would introduce a medical device in Brazil in 2013, while 58% would in China.

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