FDA Policies Erode Minnesota MedTech Industry, Leaders Likely to Move Jobs, Invest Overseas, according to an industry study

Minneapolis, Minn. – Often credited as providing a “healthy kick” to the state’s economy, Minnesota’s medtech industry faces a dire future if FDA policies and procedures don’t change, according to a study of medtech industry leaders in the state.

Minnesota is home to over 350 medtech companies, which directly employ more than 35,000 people at medical device companies and another 250,000 when considering medtech design firms, specialty manufacturers, clinical, regulatory, quality and reimbursement consulting firms that serve this industry, in the state alone.

“We are the Silicon Valley of the device world having the largest concentration of medtech jobs in the world right here in Minnesota,” said Mark DuVal, a regulatory attorney who helps medtech companies navigate the path through FDA. “The need to insist on improvement at FDA is vitally critical and is recognized in a bipartisan way by our Minnesota congressional delegation.”

The study surveyed Minnesota-based CEOs and venture capitalists to gauge their overall impressions and willingness to invest in medical technology while in Minnesota. Fifty-nine leaders, representing startups to global corporations, participated in the industry perception study. Introworks, a branding and launch agency with more than 20 years serving medtech clients, conducted the study on behalf of the Medtech Resource Alliance and Minnesota Medical Device Alliance, two organizations dedicated to serving and advocating for the future of the medical device industry.

Key challenges facing Minnesota’s medtech future if FDA stays the course, according to the study:

• The majority (64%) of leaders surveyed have an unfavorable impression of the industry, in large part because of the regulatory difficulty FDA poses. Respondents said the “unpredictable” and “unresponsive” FDA stifles their ability to innovate and be competitive because of its risk aversion and uncommonly long approval process – 28-76 months on average to clear products for market.
• Thirty-six percent of surveyed leaders said they would not invest in the medical device industry. In fact, more than half of those surveyed said their growth strategy is to focus on market releases outside of the United States – with 40% focused on Europe and 12% on developing markets.
• Eighty-five percent of the medtech leaders said the U.S. regulatory environment has negatively affected their ability to create jobs. And more than a third (35%) said future job growth for their company will occur outside of the United States.

In sharp contrast, Minnesota medtech industry leaders hold parallel medtech regulatory bodies in Europe in high esteem.

“This survey demonstrates that after 3½ years of this FDA administration’s promises to improve performance, the industry is not seeing the talk translating into the walk,” said Jim Hickey, a veteran medtech CEO, investor and board member.

The study found major competitive gaps between FDA and its foreign counterparts in relation to timeliness, fairness and consistency, as well as promoting excellence and innovation. Those bodies include the individual bodies within countries, and the European Medicines Agency, which governs for the European Union as a whole.

“Europe’s approval process is run by an independent third-party system that is well educated, trained, responsive, very experienced, applies common sense and is not risk averse,” a survey respondent wrote. “They know how to facilitate medical device innovation. FDA, flatly, does not.”

Said Dr. Robert Schwartz, a cardiologist with Minneapolis Heart Institute: “What’s most troubling is that U.S. physicians and their patients do not have access to cutting-edge, life-saving and life-improving technologies, until years after they are available outside the United States. Something needs to change to streamline the FDA approval process.”

To regain its credibility and create a climate that spurs – not stifles – innovation, respondents said FDA must simplify approval procedures and regulations, and eliminate ambiguity. Without change, the med-tech product development and jobs will continue to migrate overseas, and the United States will lose its lead.

“What an audience believes about you is essentially fact – it’s your reputation,” said Bob Freytag, president of Introworks, which conducted the study to measure the health of the FDA brand in the marketplace. “And perceptions drive behaviors. If the leaders of our medtech industry perceive they cannot succeed in the climate FDA has created, they will leave.”

For a copy of the study or for interview requests, please contact:

Bob Freytag
Introworks
bfreytag@introworks.net
952.288.2715

About Medtech Resource Alliance
The Medtech Resource Alliance is a group of experienced entrepreneurial healthcare resource providers that focus on bringing knowledge, best of breed services and leading-edge solutions to the most influential leaders in the medical community. Associated organizations specialize in fields as diverse as Manufacturing, Packaging, Branding, Marketing, Research & Development, Quality, Regulatory, Legal, and Sales Training.

About Minnesota Medical Device Alliance (MMDA)
MMDA is a group of 150 medtech CEOs, inventing physicians, venture capitalists and angel investors who invest in the medtech space in Minnesota. MMDA is a grassroots organization that advocates for improvement and change at FDA.