This report originally appeared in the December 2009 issue of DOTmed Business News

Like a major 20th century war, one of the big battles in the medical device industry will tear through Europe before it ever involves the U.S. I'm talking, of course, about the fight over transcatheter heart valves, devices that can replace defective heart valves through a catheter procedure - no open-heart surgery required. The scrap for what could be a $1.5 billion market between Edwards Lifesciences, which offers the SAPIEN valve, and Medtronic, which vies for the CORE and Melody valves, even went mainstream and made it into the pages of The New York Times this October.

Transcatheter valves may be the next big thing, but outside of a handful of patients registered in U.S. clinical trials or granted compassionate use, only Europeans have so far benefited from them. Both SAPIEN and Medtronic's valves are still investigational devices in the U.S., and have no Food and Drug Administration clearance, while in Europe thousands of patients have had their new valve replacements threaded up their aortas.

This raises a question often asked in the medical device community: is Europe - or the rest of the world - just pushovers when it comes to approvals?

Where a device debuts rests on a complicated matrix of marketing decisions and regulation law that resists easy generalizations, although, in truth, quite often companies find that months, or even years, before they get U.S. approval, their products receive the CE Mark - an acronym of the French Conformité[<00E9>][<00E9>][<00E9>] Europé[<00E9>][<00E9>][<00E9>]enne- which confers the right to sell most medical devices in all 27 member states of the European Union, plus Norway, Liechtenstein, Switzerland and Iceland.

"If for instance, we have an ultrasound product," Mark Namaroff, a spokesman for Analaogic, a Peabody, Mass.-based imaging device maker, tells DOTmed News, "it's a lot easier from a regulatory perspective to sell products in Europe first before the U.S."

But Joe McGrath, a spokesman for the heart product division of Medtronic, the Minneapolis, Minn.-based device giant, is not so sure. "It's probably multi-factorial," he says. "The regulatory pathway for CE mark differs in some significant ways from the regulatory pathway in the United States. The requirements for clinical data to achieve CE mark are different. I can't say - I'm not sure how to characterize the difference. It is often the case that devices debut in Europe or other parts of the world outside the U.S. before they debut in the U.S."

To figure out what's happening, it's worth first looking into the complicated, ever-shifting rules of our own regulatory body.

FDA and fast-tracking

In the U.S., as everybody knows, virtually all products have to go through the FDA, where they are required to meet a set of generic manufacturing guidelines called Good Manufacturing Practice, while also getting pegged into one of three classes, depending on how risky they are - in other words, is it a wheelchair, or a pacemaker?

Class 1 products, which include scalpels, are generally seen as presenting the lowest risk, and usually only need to meet GMP guidelines and register with the FDA. A tiny amount of marginally riskier Class 1 products, about 5 percent, and most Class 2 products, which include ultrasound devices and most imaging equipment will, according to DOTmed's sources, meet FDA's fast-track clearance process for slightly risky devices, known as the 510(k) process. This system, also known as post-market approval, is reserved for devices largely similar in function to something the FDA has already approved.

On paper, this system is quite fast: "The timeline for FDA to approve Class 2 is 90 days," says Chris Schorre, director of global marketing, Emergo Group, one of the largest medical device company consulting groups in the world. "That's the time they legally have to review the application and render the decision."

But, he adds, "The reality is, it takes much longer."

What happens is that the FDA's clock stops after they send you back questions brought up by their initial review - questions it could take months for a company to answer, and this back-and-forth eats up time, and could be responsible for U.S. launch delays. Still, it's fairly smooth, and Schorre says, "The FDA is quite good at reviewing, faster than most countries in the world."

The real lag for a U.S. release comes with Class 3 products, the most risky, which need pre-market approval.

"It's a monster process," says Schorre. "Legally, the FDA has 180 days to approve the application. It involves the submission of clinical trials, and the FDA must approve even the protocol for conducting those trials. It's a very expensive, very time-consuming process. For good reason," he adds, as it covers devices like stents, pacemakers and implantable defibrillators. "Things you're very happy they do an intensive review on."

But is the EU speedier?

If the EU's process is faster, it's only so for Class 3 or Class 2 products (of which Europe has two, Class 2a and Class 2b; the latter's riskier), as the FDA makes minimal demands on Class 1 - so, is the EU faster?

One problem with answering the question is unlike the U.S., in Europe, no one body is responsible for reviewing all submitted products. In the EU, each member state's health ministry may outsource its review process to independent, mainly private, third party certification organizations called Notified Bodies. U.S. companies then have to hire these organizations - TUV and BSI are two of the big ones assist in the CE marking process which involves quality control audits and product review.

"For instance, say a US company wants to go to Europe, and they choose BSI to be their auditor," says Schorre. "BSI is based in UK. The UK basically authorizes BSI to conduct these audits."

While in theory, all Notified Bodies and the country authorities they answer to treat all applications in a uniform fashion, in fact, there are small differences, and companies can, and do, look for the best fit.

"There's shopping in the sense that companies developing Class 3 products, if it's a controversial product, they'll search for an auditor based in a country where they might have more of a chance of approval," says Schorre.

He gives an example. "Some countries, which I won't name, don't like teeth-whitening products. Some of them feel those products are not medical devices; they're more like a drug. So companies will sometimes say, 'Instead of going to this country to try to getregulatory approval, let's go to a different country.'"

This lack of real-world standardization can have an effect on whether clinical trials are necessary - one of the more time-consuming parts of the approval slog.

Sarah Sorrel, president and founder of Medpass International, a Paris, France-based company that guides mainly U.S. companies looking to open the European market, wrote an article in 2006 in the journal Applied Clinical Trials investigating the differences between EU and U.S. regulations. While the subject is too complex for a simple answer, she does notice that oftentimes European regulators wouldn't demand the randomized, multi-center clinical trials that seriously risky Class 3 products often warranted stateside, because CE markings require demonstration of safety and performance rather than safety and effectiveness as in the U.S. "In our experience," she writes, "CE marking protocols rarely include a study hypothesis and a statistical calculation of sample size even though this is a requirement of the European Standard."

When getting a major medical product approved, she tells DOTmed News that "requirements for clinical data were much less."

"What they wanted to see, what they always want to see, is safety and performance, and a favorable risk-benefit ratio," she says. "We were able to position the product so that it was relatively easier to demonstrate this."

That said, Emergo's Schorre doesn't feel that companies choose Europe because it's faster or any easier to get approval than in the U.S. "European requirements are every bit as robust as the FDA's," he warns.

Instead, he feels companies choose European mainly because of economic factors.

"It's market-driven reasons," he says. "It might be the case, for instance, that there could be a better market there, less competition. Or the reimbursement scheme might be more favorable and profitable in Europe than the U.S."

The big draw for a market like Europe is that some countries are underserved, he says. For instance, a company might discover that the Polish and German markets don't have many stents being sold. "[They]might want to come in and establish dominance before some other companies do," he says. "The U.S. market can be extremely saturated."

In fact, Schorre argues, Europe can be tougher for some kinds of products to get approved. "U.S. has three classes. But Europe has two versions of Class 1, and two versions of Class 2: 2a and 2b, as well as Class 3. A product considered a Class 2 product in the U.S. could be considered Class 2b in Europe." And a Class 2b product - a higher-risk category than the U.S.'s Class 2 - would probably need some kind of clinical trial to be done, he says. "In the U.S., that might not be the case."

Sorrel agrees. "It all depends on the product regulatory pathway," she says, noting that if your product qualifies for 510(k) approval you could avoid handing in "required clinical data" that a European auditor could demand.

As an example, she mentions Novacept, which got bought by Cytyc, a woman's health care company, which in turn got gobbled up by Hologic. "They were really clever," she says. "Early clinical development work was done in Europe, but they didn't come to Europe straight on after getting the CE mark. It was easy to get a 510(k). Soon they were in every single gynecological office, then they were bought and worth tons of money."

Another driver that can't be overlooked is the exchange rate. Right now, the euros' strength relative to the dollar -as this article went to press, one euro gets you about one and a half dollars - makes U.S. medical products a bargain in Europe. "It's now difficult for a European company to compete [in Europe] with an equal U.S. company," says Schorre.

Yet, much of what countries fear in Europe is reimbursement rates - the conventional wisdom is that even though a product could fly through regulations, it won't get reimbursed by the more cost-conservative national health plans that control the Continent's health care purse-strings. But the conventional wisdom could be wrong: Sorrel says she managed to get reimbursement for a major, novel product produced by a huge U.S. manufacturer shortly after its debut. She insists there's no alternative to taking each product on a case-by-case basis. "Everything has to be looked at individually," Sorrel says. "No market opportunity should be overlooked. People have to do their homework."

Rest of world not much laxer

While U.S. and Europe are the biggest markets for medical devices, the rest-of-world is increasingly luring OEMs eager for a slice of their growing economies.

Predictably, some of these countries have lax regulations - India, for instance, has yet to establish solid medical device regulatory law, the largest country on the planet - teeming with some 1.3 billion people - that is yet to do so. But that doesn't mean rest-of-world markets are the Wild West and offer shadily streamlined paths of regulatory ease. India is the exception, not the rule. In fact, secondary markets have regulations that while sometimes ad hoc and variable are actually rather tough - and often keep a lot of advanced med tech off the market.

First, most countries have anti-dumping laws in effect that require medical device makers to have home-country approval for products to be sold. While this prevents sale of defective products, it also allows smaller, poorer countries to basically save money by "outsourcing" their testing to places like the U.S. or Europe.

"They look at U.S. approval and the European approval as something they can trust," says Schorre. "They figure all the hard work has been done. They don't have to hire experts. The Americans have done it."

And what new regulatory hoops they do string up are less to ensure medical products are reliable, and more to protect home industries.

"They'll put these little bells and whistles and requirements on things," says Schorre. "Some of the things they do are protectionist, requiring lots of additional testing in the market." As an example, he mentions that Russia requires electrical-safety testing to be done to their own standards, using Russian test facilities, even though these standards "are almost identical to international standards for electrical safety."

These protectionist measures could even slow down imports, as many medical device companies are reluctant to incur the big expense - and hassle - of enduring what is often redundant foreign testing. "If only the world would harmonize on certain things," says Schorre. "The end result is that a lot of secondary markets don't get the medical technology they could get, because they make the registration process difficult. Leading-edge tech does not make it into some of these secondary markets for that reason. It's too bad."

But one of the main snags isn't legal: it's linguistic - and cultural. Take Brazil and China, the number one and number two, respectively, most favored countries for medical companies to export to in 2010, according to a survey just conducted by Emergo Group, which kindly agreed to share early numbers with DOTmed News. These two countries, unlike say, most European nations, don't offer guidebooks in English.

"I would put [Brazil] in the category of more difficult," says Schorre, "mainly because their agency, called ANVISA [Agê[<00EA>][<00EA>][<00EA>]ncia Nacional de Vigilâ[<00E2>][<00E2>][<00E2>]ncia Sanitá[<00E1>][<00E1>][<00E1>]ria or National Health Surveillance Agency], does not have documents available in English, only Portuguese."

More confusing, is that what rules they do have tend not to be well-defined, or even written down, so each transaction, like a snowflake, can be totally different from the last.

"When you get in markets like the U.S. and Japan," says Schorre, "the rules are well known and defined, so people know what to expect. But in countries like Mexico, Brazil and China, even, the rules are not written, and a lot of decisions are made by independent people within the ministries at the time when the application is made. There are a lot of unknowns."

For example, he says, "It's not always clear if a product's going to be subject to tests in Brazil. You can't read a chart [to find out]. You really need a local person, who's going to definitely say that for you."

Schorre stresses the importance of having someone on the ground in the country, who knows the rules, knows the language, and has connections. "It's true in Russia," he says, "where we have an office. You have to have personal meetings to determine these requirements."

And getting all that together and tackling a myriad of potential problems may leave some manufacturers feeling a little homesick.