Orthopaedic Device Approval Through the 510(k) Versus Premarket Approval Process: A Financial Feasibility Analysis
Yang, Brian W.
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AbstractThe two main routes of medical device approval through the Food and Drug Administration are the premarket approval process (PMA), which requires clinical trials, and the 510(k) premarket notification, which exempts devices from clinical trials if they are substantially equivalent to an existing device. Recently, there has been growing concern regarding the safety of devices approved through the 510(k) premarket notification. The PMA decreases the potential for device recalls, however, it is significantly more costly and time-consuming.
Investors and medical device companies are only willing to invest in devices if they can expect to recoup their investment within a timeline of roughly seven years. Our study utilizes financial modeling to assess the financial feasibility of approving various orthopedic medical devices through the 510(k) and PMA processes. The expected time to recoup investment through the 510(k) ranged from 0.585 years to 7.715 years, with an average time of 2.4 years, while the expected time to recoup investment through the PMA route ranged from 2.9 years to 24.5 years, with an average time of 8.5 years. Six out of the thirteen orthopedic device systems analyzed would require longer than our seven year benchmark to recoup their investment costs through the PMA. With the 510(k) premarket notification, only one device system would take longer than seven years to recoup its investment costs.
Although the 510(k) premarket notification has demonstrated safety concerns, broad requirements for PMA approval may limit device innovation for less-prevalent orthopedic conditions. As a result, new approval frameworks may be beneficial. Our report demonstrates how current regulatory policies can potentially influence orthopedic device innovation.
Citable link to this pagehttp://nrs.harvard.edu/urn-3:HUL.InstRepos:39712825