Regulatory Clearance ≠ Commercial Success: Why Regulatory Approval isn’t Enough

Regulatory clearance (FDA, CE, etc) is your ticket to enter the market, but it’s just the beginning. It’s like getting your driver’s license - you must have it to hit the road, but that doesn’t make you a good driver or set you up to win a race.

The regulator’s role is to ensure that all medical devices are safe and effective – all within the context of the intended use and claims that you set as the manufacturer. These aspects are critical for success and will force you to apply a level of rigor that is very appropriate when dealing with medical products. After all, trying to sell something that is risky to use or quite simply doesn’t work is a disaster waiting to happen.

The problems can start if you spend so much of your energy on obtaining regulatory clearance, you forget to pay attention to other barriers on the journey to product-market-fit and commercial success.

Prepare for Commercial Success before you get your License

Just like you wouldn’t go and obtain a driver’s license before learning how to drive, you should make sure some of the critical aspects on the journey to commercial success are addressed before you obtain your clearance (or at the very least in parallel). Unlike getting a driver’s license, obtaining regulatory clearance is a significant investment and you want to make sure it will serve you well.

To ensure you will enjoy commercial success, here are a few key aspects you want to address:

Validate the Market Need before seeking Regulatory Approval

Just because something is safe and effective doesn’t mean people actually need it. You could develop a robotic back scratcher that uses sensors to detect an itch and use its robotic arm to scratch while avoiding damage to the skin. Theoretically you could obtain regulatory approval to sell it. It doesn’t mean people want it. This is not of concern to regulators - It is on you to validate the need for your product and understand who your customer(s) will be.

Clinician buy-in is key to Success

Clinicians won’t just adopt your product because it has regulatory approval – they need real-world proof that it improves their practice and benefits their patients. To be successful you will need to overcome inertia and resistance to change. The burden of proof that regulatory bodies require for their determination is often insufficient to achieve this (though can be an important asset when done well). Broader clinical trials, publications and papers by opinion leaders in the respective field may be needed. Clinicians need to be convinced that your solution will work for their clinical practice and patient population. Some clinicians will want to speak to a peer who is using it.

Make sure your product fits seamlessly into workflows

A critical aspect for adoption of new solutions in healthcare is how it will integrate with the current (clinical) workflow. While regulators have increased their assessment of usability, this is done only in the context of how you define the usage and often tested in isolation. Your solution might have a clunky integration or worse – expect people to step out of their natural workflow. Such friction is often enough to cause significant churn or poor adoption of your solution.

Your business model needs to make financial sense

As part of product market fit, you need a business model that works for your customers. Your business model should also allow you to build a profitable business, but let’s put that aside for a moment. A good litmus test for the business model is being able to articulate a financial ROI for your target customers. Especially in the the complex structure of the healthcare market with its payment, reimbursement and incentive schemes this is not trivial. The regulators do not care about your business model or reimbursement at all.

Get the right clearance for your product use case

You wouldn’t apply for a motorcycle license and then attempt to drive a truck. Since getting a clearance is a big undertaking, here are a couple aspects that should be known in advance to make the most of it and avoid limitations down the road.

Know who will use the product and where

Regulators only care about the usage of the product and the setting it will be used in, not who signs the check. While knowing who you sell to is critical on the commercial side, you must have a solid understanding of who will be using it and where in practice. This directly impacts your labeling, intended use and studies which will be part of your regulatory clearance. Since these efforts are substantial it is not practical to overshoot, nor do you want to have to redo some of the efforts to enable true commercialization.

Have a clear understanding of the benefits you’re after

The better your understanding of the customer needs, the better your ability to articulate the improvements and benefits you intend to deliver. In healthcare you will have to substantiate any claims you make. The clinical studies and/or trials you carry out for regulatory approval are an opportunity to do just that. If done well, this can create a competitive barrier and marketing asset as a byproduct of your efforts towards regulatory clearance.

In conclusion

Regulatory approval is crucial, but it’s only half the battle. Success comes when you align your product with real market needs, clinical workflows, and a viable business model. 

If you’re a healthcare startup entrepreneur, don’t let regulatory hurdles blindside you. Start addressing these key commercialization aspects today to set your product up for long-term success.