Welcome to part 3 of MBIP’s guide to medical device regulations and IP strategy. The first 2 parts focused on introducing the Medical Device Life Cycle and exploring the first 2 stages, and can be found here and here. In this part, we will unpack stages 3 and 4, as well as relevant regulatory considerations for specialised medical devices.
3. Market Entry
As a medical device product enters the market, there is initially the launch phase, where a company may focus their marketing on raising awareness of the product to generate interest. The initial phase is typically characterised by significant costs in product development and marketing. As the product begins to gain acceptance, it enters the growth phase of the product life cycle, characterised by rapid growth in sales and in market share. Often companies seek to expand distribution channels and optimise production of units at this growth stage. They may also seek to improve on certain product features as they receive feedback. The growth phase is usually accompanied by economies of scale for the company, assuming that they are able to secure sufficient supply chains.
With respect to regulatory requirements, a product that has entered the market must ensure that they continue to comply with safety and performance requirements as well as labelling requirements and to continue to conduct post-market surveillance.
Companies are advised to take a proactive approach to enforcing their patent rights against infringers by monitoring competitors in the market. This prevents unauthorised use of the device and minimises the chances of an imitation device taking a share of the market profits. Trade mark protection is also recommended upon market entry, if not prior, to start building on brand reputation. Given that the design of the product would have been finalised by this stage, design protection is also worth consideration.
It is important to note that despite receiving regulatory approval, having the product on market does not guarantee that the medical device does not infringe on the granted rights of another patent. Thus, it is important to have conducted Freedom to Operate searches by this stage.
4. Post‑Market Surveillance & Iteration
As a product continues to be marketed, it eventually reaches the maturity phase, where sale growth may start to slow as the market becomes increasingly saturated with other competitor devices. Being able to maintain customer satisfaction and differentiating the product from competitor devices is important during this phase of the life cycle. The company may seek to introduce variations or improvements to sustain customer interest and to extend the product life cycle. Maximising the value of any existing IP is paramount at this stage, with companies possibly considering licensing and cross-licensing arrangements to generate additional revenue and strengthen their market position, while also fostering greater innovation through collaboration. Cross-licensing may also be strategically used to reduce risk of litigation through the sharing of technology.
With respect to regulatory processes, in Europe, it is a requirement that the manufacturer of a medical device reports known issues concerning a device to the member state in which the CE mark was applied. Post-market surveillance is a formal requirement integrated with risk management and clinical evaluations as well as with quality management systems. It is conducted proactively and involves continuous monitoring. If issues are identified, the individual state then decides whether the device is restricted for use or withdrawn. Penalties exist for those companies who fail to meet their obligations.
The US, on the other hand, incorporates post-market surveillance into quality and reporting systems, focusing on targeted post-approval studies and real-world evidence of use. Unlike in Europe, the framework being centralised via the FDA, to ensure patient safety and regulatory compliance.
Australia is similar to Europe, in that post-market surveillance procedures require manufacturers to report issues to the TGA in line with ongoing compliance with regulatory requirements. Reviews and audits are conducted periodically to ensure standards are upheld.
Post-market surveillance therefore differs in structure and in expectations between the two jurisdictions.
Occasionally, with post-market data, new patentable improvements may come to surface, leading to new patent application filings. Regulatory-driven design changes, for example to improve safety, may also create opportunities for new IP.
End of Product Life Cycle and Portfolio Management
Once the medical device reaches its end of life, which is characterised by a gradual decline in sale units as the market gets increasingly saturated and the device becomes outdated relative to other technological advancements, the company will be looking into whether the device is to be withdrawn, replaced or redesigned. Compliance has to be maintained until the last medical device unit retires. At this point, companies may be planning for patent expiry. They may be considering licensing, selling or even repurposing their remaining IP assets, potentially filing new patent applications to protect next-generation devices. By selling IP assets, a company may benefit from immediate access to funds that can be used to start new ventures. For some, licensing may be a sensible option particularly if a company wishes to continue to gain revenue without being held responsible for production and marketing costs.
As a patent expires, regulatory barriers, for example clinical data exclusivity in some jurisdictions, may help to continue maintaining a competitive advantage for the company. For those who wish to extend the commercial life cycle of their product, strategic timing of new filings may help to achieve this by building a foundation for sustained growth. This can significantly benefit the company’s overall IP portfolio and future commercial successes. If the medical device has had a successful run of their product lifecycle, there is also a high likelihood that strong market presence has already been established by this late stage through trade mark protection, which will help with any future ventures.
Regulatory Considerations for Specialised Medical Devices
1. Pediatric medical devices
For pediatric medical devices, the regulatory pathway can be considered to proceed through 4 stages. Firstly, there needs to be an understanding of how the pediatric version of the disease differs or is similar to the adult equivalent. The more similar, the faster the timeframe to bring the device to market, since outcomes reported in adults can be used to support a case for pediatric use.
Secondly, there needs to be enough analysis to understand the variables that may be involved with the pediatric pathology of the disease.
Thirdly, there is the reduction to practice stage, where a prototype is developed, tested and analysed, with the expectation that modifications will be made along the way to minimise issues and improve robustness of the final design.
Lastly, there is the testing stage, where the device is used in pre-clinical and eventually in clinical trials.
Although more research and supporting data is required to ensure medical devices are safe for pediatric use, only the US recognises the additional time it takes to bring these devices to market. Thus, the FDA offers support for these innovations via acceleration pathways. This includes the Humanitarian Use Device (HUD) / Humanitarian Device Exemption (HDE) pathway, which is eligible for devices designed for conditions affecting fewer than 8,000 individuals, including pediatric patients, annually in the US. This pathway does not require manufacturers to demonstrate full effectiveness, but rather focuses on probable benefit and how this outweighs any risks.
There is also support provided via the Pediatric Device Consortia (PDC) Grant Program, which assists with development, production and distribution of pediatric medical devices through funding of non-profit consortia. However, the US does not provide a 6-month extension of marketing exclusivity for pediatric devices; this is only available for drugs and biologics. Notably, Europe and Australia do not have any such equivalent dedicated pediatric pathways.
2. Software as a medical device
Medical devices are unique relative to non-medical device technologies, in that the challenges they face with respect to their regulatory hurdles are complicated. Medical devices that combine hardware with software are especially challenging during the development process.
The FDA views software that is intended to be used for one or more medical purposes without itself being a part of the medical device hardware to be “software as a medical device”. This definition is shared with that used in Europe, regardless of whether the software is standalone or is linked to another device.
The other types of software related to medical devices include software that is integral to a medical device (software in a medical device) and software that is used in the manufacture or maintenance of a medical device.
In the US, there are four categories of software as a medical device, with Category I having the lowest level of impact on a patient and Category IV having the highest level of impact, being software that is capable of treating or diagnosing a disease or condition in a critical situation.
Category I – Software that is used to provide information for the purposes of clinical management of a disease or condition in a non-serious situation.
Category II – software that provides information to treat or diagnose a disease or condition in a non-serious situation or condition.
Category III – software that provides information to treat or diagnose a disease or condition in a serious situation or condition.
Category IV – software that provides information to treat or diagnose a disease or condition in a critical situation or condition.
Unlike the US, in Europe, most software as a medical device is classified under Class IIa or above, as they are used for monitoring purposes as well as diagnostic or therapeutic decisions, which means that assessment by a Notified Body is usually required. It is not uncommon for most software as a medical device to end up in Class IIa or IIb, even if the same software is classified as low-risk in the US.
Australia uses the same four-tier classification system (Class I-III) for software as a medical device based on the level of harm the software could pose. Diagnostic or therapeutic support software, typically falls within Classes IIa-III, with those software that utilise AI in their decision making processes often being classified as high-risk requiring greater clinical evidence. Software as a medical device in Australia must be included in the ARTG before it can be supplied.
Developing a software as a medical device that is safe involves undertaking risk management assessments, quality management assessments and to have methodical systems engineering in line with best industry practice. Unlike other medical devices, software as a medical device requires continuous updates to maintain security levels. If the software malfunctions in any way or breaches security or privacy, it will not fulfil the basic requirements for medical devices.
Up Next
The fourth and final part of this series will be released in coming weeks. It will focus on other IP-related considerations for those developing medical devices in Australia, Europe, and the US. In the meantime, if you have questions regarding intellectual property and medical devices, please feel free to get in contact with MBIP.
