Medical device makers tackle FDA rules with PLM

Medical device makers want to improve products' time to market while also complying with FDA rules. Product lifecycle management is helping to balance these sometimes conflicting goals.

Jeanne Iasella is governed by regulations. Iasella is the CIO at Medrad Inc., a $411-million company that makes devices for imaging and diagnostic procedures. And when Medrad makes a design change -- say, a plastic component is ditched in favor of a titanium one -- that change must be authorized by numerous people within the company and documented.

Focus On: Medical Devices
Top business challenge: To comply with the FDA's ever-changing regulations while managing growth.
Solution: To decrease time to market of new products by streamlining administrative and manufacturing processes.
How IT can help: By deploying product lifecycle and business process management systems to reduce the reliance on paper.

"Just to get the signatures of six people could take months," Iasella says.

As with all companies that make medical devices, Medrad must pay heed to the Food and Drug Administration (FDA), whose mandates cover everything from device design and manufacturing to marketing and processing complaints.

Industry insiders say that the pile of change request documents can be an inch thick. And the FDA requires such documentation for every change related to design, manufacturing, packaging, labeling, distribution and marketing.

While many midmarket firms remain mired in paper, what increasingly defines the $78 billion medical device industry -- besides the looming presence of the FDA -- is growth. The average rate of growth for medical device manufacturers is 6%, according to the Advanced Medical Technology Association (AdvaMed). In the past five years, the Indianola, Pa.-based Medrad has increased its revenue by 15%.

To say Iasella was being choked by the amount of paper is an understatement. To tackle the challenge, Iasella deployed product lifecycle management (PLM) software, which manages the entire lifecycle of a product from its conception stage through its design and manufacturing stages and, finally, through service and disposal.

The Burden of Regulation

Before a medical device can hit the market, the FDA must give it the thumbs up. While the approval processes vary significantly depending on the type and class of device in question, the FDA reserves its most stringent controls for Class III devices: products "that support or sustain human life, are of substantial importance in preventing impairment of human health, or which present a potential, unreasonable risk of illness or injury." Think heart valves, drug-eluting stents and silicone implants.

Such devices require pre-market approval, where the manufacturer must validate safety and efficacy to the FDA. The road to pre-market approval can be a long one. The FDA has set a lofty goal of 180 days of turnaround time. But at best, the FDA predicts that 80% of the applications it receives for pre-market approval will take 320 days. "A lot of our growth is about innovation, so cycle times and speed to market are critical," says Iasella.

Stemming the Paper Tide

In 2005, Iasella began deploying PLM software from Enovia MatrixOne as a first step in automating product data. With PLM, any change that Medrad makes to a product, whether it involves the design, the materials used in manufacturing or the labeling, can be expedited significantly simply by automatically routing documents requiring multiple signatures.

Iasella's goals are to improve internal operations and revamp business applications. As Medrad grows, so does its customer base. It now has a much larger percentage of customers in the cardiology market than it did five years ago. As more doctors and clinics identify more uses for the devices Medrad makes, the company finds its customer base ever expanding. To accommodate that trend, Iasella plans on re-evaluating the company's customer relationship management system and possibly upgrading it within the next year.

Reducing paper, improving internal efficiencies and supporting external compliance requirements are also top concerns for David McCampbell, vice president of worldwide information systems at Norcross, Ga.-based Immucor Inc., a $183-million manufacturer of instruments and automated testing equipment used by blood banks.

McCampbell has implemented Web-based software from Sparta Systems Inc. to automate quality and auditing processes throughout the company and with external organizations, including the FDA and auditing firm Grant Thornton. Such an enterprise platform enables Immucor to "address a variety of needs, such as workflows in our quality management system and many other workflows across departments," McCampbell says.

For medical device manufacturers, time to market and internal efficiencies have to be balanced against the need to adhere to quality standards. Thanks to high-profile product recalls such as one in 2004 involving 90,000 coronary stents from Boston Scientific Corp., keeping tabs on every aspect of manufacturing information -- from the components used in the end device to the plant where a device is made to the individual employees who work on a specific product lot -- is a mission-critical activity.

At Greatbatch Inc., a $240-million manufacturer of components for implantable devices, CIO Tae Park has rolled out Oracle's E-Business Suite to track products' history. In the event of a recall, Park wants a quick, targeted approach to identifying the products in question. "It would take weeks to get the full product genealogies on paper," Park says. It takes less than an hour now that the information in the bill of materials is input into the Oracle system. For Park, quality management is the end goal, with the added bonus of achieving operational efficiency along the way.

A Hefty Price; Rising Investment; Waiting for the FDA; The Top Five Specialities

The FDA's Device Domain
With all the complexity of the medical device industry, some further explanation is in order on what constitutes a medical device and some of the industry's defining issues.

Any product that has contact with bodily fluids is a medical device. The products that fall into the category are diverse, ranging from the low tech (plastic gloves) to the high tech (replacement heart valves). Life-enhancing and sustaining devices -- Class II and Class III products, respectively -- are those most stringently controlled by the Food and Drug Administration (FDA).

Complexity threatens innovation

As so-called combination products -- most notably drug-coated stents -- enter the market, these controls become even more stringent. A medical device coated with a drug is governed by two sets of FDA rules. That requires more legwork by companies seeking FDA approval -- as well as more quality control, more tracking activities -- as products enter the marketplace.

The FDA isn't the only entity that has influence over what medical devices enter the market. Even as products are becoming more sophisticated, the industry must be aware of reimbursement policies. As companies pursue innovation, they are kept in check by what Medicaid, Medicare and insurance companies will pay for. "Most medical technology is developed for acute health problems," says Charlie Whelan, a principal consultant at market research firm Frost & Sullivan's health care and life sciences practice. "There's a growing burden of chronic disease, such as diabetes, but that's not how the health care system pays."

Whelan cites the home telemonitoring market as an example of how payment policies can stifle innovation. For a number of years, monitoring technologies such as ventilators and dialysis machines that enable patients to receive treatment at home rather than in a clinical setting have been poised to take off; the fact that they haven't is a testament to the failure of reimbursement policies to keep up with market demands.

Bringing back dynamism

There's also considerable venture capital investment and acquisition activity in the space, two factors that underscore the dynamism of the industry. Investment firm InterWest Partners has recently invested in 30 medical device and diagnostics companies; of those, 11 have been acquired by the likes of Boston Scientific, Johnson & Johnson and Medtronic Inc.

There's even a startup called Generic Medical Devices Inc. (GMD) in Gig Harbor, Wash., which will offer products that have come off patent at a fraction of the cost of branded devices. This practice has proved successful in the pharmaceutical industry. CEO Richard Kuntz says he plans to begin selling devices online this year. In anticipation of demand, GMD has implemented software from Made-2Manage Systems for both enterprise resource planning and manufacturing resource planning.

-- M.S.

Room for Improvement

But in terms of using IT to improve efficiency, the industry still lags behind its peers in health care and pharmaceuticals. As the medical device sector grows, the need to streamline operations will only increase as manufacturers strive to get products to market as quickly as possible and ensure quality and safety.

"Historically, medical device makers have been most worried with getting a product developed and through the approval process," says Julie Fraser, a principal at Industry Directions, a consulting firm based in Cummaquid, Mass.

What IT departments really need, says Fraser, is better tools -- not just lifecycle management software, but also software that helps track the lifecycle of their products and monitor the manufacturing process, also known as manufacturing execution systems (MESs).

As Fraser sees it, PLM and MESs track everything that happens on the plant floor, which makes them ideal applications for midsized device makers.

"PLM systems focus on the product information itself: ... how it was designed, all the specifications, etc.," Fraser explains. "MESs collect the data as the production process happens so managers can compare what should happen to what actually does happen."

The Next Era

The good news is that vendors see a huge market potential here, says Erik Swain, editor in chief of Medical Device & Diagnostic Industry magazine. "In the past five years, the software market for medical device manufacturing has gotten extremely competitive," says Swain.

Mickey Garcia, solutions director for MatrixOne's medical device group says the benefits of IT have traversed a continuum, beginning with spreadsheets, storage, communications and collaboration. The next big era of IT will be in the area of business process automation, he contends.

"That's particularly important for the medical device industry," said Garcia, "because companies have to make sure that every loose end is tied."

Megan Santosus, a former senior editor at CIO Decisions, is now a features editor for SearchDataCenter.com. Write to her at msantosus@techtarget.com.

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