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Seizing Opportunity in Asia-Pacific’s Complex and Rapidly Changing Medical Device Market
by Simranjit Singh & Sundeep Shrivastava
Medical Devices & Diagnostics Quintiles Asia-Pacific

Asia-Pacific is the world’s fastest growing biopharmaceutical market – a diverse “market of markets” that holds great potential because of its expanding economies, huge and growing population, and vast number of patients with poorly met or unmet medical needs.

The region’s potential for medical device development and commercialisation is no exception. But even more so than in biopharma development, the region’s medical device regulatory market is complex, diverse and rapidly changing. To seize the opportunities in this market segment, companies must be keenly aware of what’s changed or is about to change.

In China, for example, there is promising new approval path for developers to deliver new products to market ahead of their competitors – but only if they can present clear evidence demonstrating the device can meet the China Food and Drug Administration (CFDA) strict approval criteria.

In South Korea, the latest change is a new requirement for product registration which mandates clinical data for certain devices that fall under the Class IV (high-risk classification) [1]. Companies that first become aware of this new rule and can formulate best-in-class methods for compliance have a clear-cut advantage over others.

These and other changes in Asia-Pacific mean that companies must not only keep up, but also to think ahead, plan, and act accordingly. This is the proverbial competitive edge.

Understanding untapped potential

There has been a significant increase in the number of device trials in the region over the past decade – a 96 percent increase from 238 in 2009 to 467 in 2014 [2]. The device market in the region is expanding at a compound annual growth rate (CAGR) of 6 percent [3-5]. This reflects the region’s huge potential. The current commercial value of the Asia-Pacific medical device and diagnostics market is estimated at USD $60 billion [3] and is expected to reach USD$112 billion by 2019 [6].

The chart below illustrates the year-on-year growth in device trials from 2009 to 2014.

APAC: Medical Device Trials

Open MDD APAC Trial Volumes, 2009 – 2014

Medical Device and Delivery

Number of Asia Pacific device trials by country / region for 2014 (467 total)

Challenges to overcome

Despite clear potential presented by region, it is not devoid of challenges. At a macro level, it is essential to understand individual country cultures and unmet medical needs.

Second is Asia-Pacific’s diverse, fast-changing and complex regulatory environment. Compared to regulation for drugs, device regulations in this region are still relatively new, continuously evolving, and fragmented across markets.

Last, the region also presents micro-level challenges such as ones around payer expectations. Expectations around costs associated with healthcare and reimbursement models are driven by government policy. Markets like Japan, New Zealand, and Thailand offer universal health coverage. Healthcare spending by the government in these countries is at 80 percent, whereas less than 40 percent of government healthcare spend in markets like India, Indonesia, and the Philippines [8].

Need for expertise and agility

Addressing these challenges requires a broad footprint in Asia-Pacific; a deep understanding of each market; an understanding of current regulations and changes that are occurring; and agility and flexibility. These often-paradoxical characteristics are incredibly hard to find within a single organisation.

That’s why one way for device companies to break down regional complexities and capitalise on advantages is engaging in strategic partnerships or outsourcing.

At its most basic level, outsourcing offers an attractive option for device makers to spread risk and share responsibility with a partner. Outsourcing also allows companies to quickly access expertise in unfamiliar markets and complicated regulatory environments. At an operational level, it provides the bandwidth needed to stay on top of constantly changing market scenarios and allows for agility in executing on strategy.

Appropriate partner selection, then, becomes a critical first step in the outsourcing process. Related to this, we find two vital areas sponsors should consider when selecting the right partner.

To counter regional challenges in this space, regulatory expertise, becomes the first point of consideration. We believe it is imperative for a partner to have a thorough understanding of the regulatory environment, stay on top of its ongoing transformation, and be able to adapt business strategies to address changes.

An example of the evolving device regulation environment is China’s recent Clinical Evaluation Report (CER) process. Currently there are five paths to registration for Class II and Class III medical devices (the highest in terms of risk of China’s three medical device classes):

  1. Devices listed in the CFDA’s “Catalogue of Medical Devices Exempted from Clinical Trials” could be exempted and proceed to registration.
  2. The applicant conducts a traditional in-country trial to demonstrate safety and performance of the device.
  3. The applicant provides non-clinical evidence of the new device to demonstrate safety and performance of the device.
  4. The applicant conducts a study, using and analysing foreign (i.e. outside China) pre-registration clinical trial data in either the origin country or license-holder country, to prove no difference in populations of different ethnic makeup.
  5. The applicant (under new rules that took effect in May 2015) assembles a clinical evaluation report (CER) demonstrating substantial equivalence to an approved device, including the composition, material, and safety and performance requirements.

For devices not included in the first path (listed in the catalogue), the fifth option is by far the fastest, most economical and feasible. It is especially useful for companies bringing new iterations of existing devices to market because they can use the first-generation product as the comparator.

However to be approved for this path, developers have to produce a comprehensive CER that provides clear clinical evidence establishing the safety and performance of the device.

The CER required by the CFDA is mainly based on US Food and Drug Administration (FDA) guidelines to demonstrate substantial equivalence, as well as biostatistical and meta-analysis used for CER registrations in the EU. But the resulting guidelines are unique to China, and clearly lay out what companies need to compile to avoid a full clinical trial as part of the registration process.

To meet the criteria of the CER for these guidelines, developers need to assemble a team of experts that includes:

  • A biostatistician who, using data collected from related trials worldwide, can create a profile demonstrating that the safety and performance measures fall within an acceptable range to the comparator. The biostatistician also conducts a meta-analysis to analyse data quantity and quality.
  • A regulatory expert who understands the regulatory environment in China and the country of origin for the device, and can guide the team in gathering the evidence that will be required to support approval.
  • A medical writer who has the expertise to conduct a global literature review and assemble the data from related trials conducted anywhere in the world. This piece of the CER is critical for collecting the necessary data to demonstrate equivalence related to safety, performance and efficacy.
Ideally, medical device manufacturers should assemble the expert team early in the development process and conduct a gap analysis to determine whether the device can meet the strict criteria for a CER approval path. This is especially important if there is any question as to whether there is an appropriate comparator to demonstrate equivalence, or if the new device varies significantly from the original.

In many cases, organisations might not have all three of these skill sets in-house, and have to work with a third party provider who has the depth of expertise to deliver an effective CER as efficiently as possible.

This new guideline can deliver a significant competitive advantage for device manufacturers interested in bringing new products to market in China, but only if the companies get it right. A well-developed CER that takes all of the regulatory, biostatistical and literature review requirements into account, will increase the chance of approval by the CFDA, ensuring developers generate the most market value for their product.

The CER essentially aims to shorten the timeline for product launches in China by providing substantial equivalent device clinical data.

Bringing it all together

Asia-Pacific is brimming with potential. At the same time, we observe key challenges in the region including a complex regulatory landscape, cultural diversity, and variable healthcare models across markets.

This dichotomy mandates device makers to carefully tread the line between risk and reward – meeting the medical needs of a growing population, while adhering to unique market rules and requirements. It also requires a high degree of connectivity, i.e. staying on top of constant market changes; and being agile –quickly and accurately executing strategies in a rapidly changing, multi-faceted market.

One pathway for device makers to achieve all of the above is by outsourcing. Partnering with experts who fill critical knowledge gaps, keep track of ever-changing landscapes, and ultimately, bringing a product to market in the safest, most efficient, and timely way.

References:

  1. https://www.raps.org/Regulatory-Focus/News/2015/03/17/21746/South-Korean-Regulators-to-Require-Clinical-Data-for-Many-Class-IV-Medical-Devices/
  2. Biopharm Clinical, Clearstate CROScape 2014 and Quintiles internal data
  3. https://www.aplcare.com/sites/default/files/MP54%20Feature%20Story.pdf
  4. https://www.pacificbridgemedical.com/publication/asias-growing-medical-device-market/
  5. https://www.slideshare.net/UBMCanon/am13-asia-pacificinfographic
  6. “BMI Special Report Asia Pacific Medical Market Forecasts to 2019.” Business Monitor International, October 2014
  7. Journal of AusBiotech, March 2015, Vol 25, Clearstate , Biopharm Clinical (2009– Sept 2014)
  8. McKinsey & Company, “MedTech in Asia, Committing at scale to raise standards of care for patients,” December 2015

About the Authors

Simranjit Singh
General Manager, Medical Devices & Diagnostics Quintiles Asia-Pacific

Mr. Singh leads the Medical Devices & Diagnostics business in Asia- Pacific for Quintiles. He is responsible for providing solutions to help medical device companies enhance their R&D activities in the region, and has been instrumental in putting together Quintiles’ strategic partnerships with several medical device companies in Asia.

Prior to joining Quintiles, he spent six years as the Director of Healthcare Consulting at Frost & Sullivan, where he managed its Asia-Pacific healthcare practice and implemented several strategic consulting projects for multinational and local medical device companies to develop their R&D and manufacturing operations in Asia; support their merger and acquisition strategies; and increase their market penetration. Mr. Singh also serves as chairman for BioSingapore, an industry association that plays an integral role in developing the biomedical sector in Singapore.

Mr. Singh holds a bachelor’s degree in biomedical sciences from the National University of Singapore and earned his MBA from the Graduate School of Business, University of Chicago. He also has a graduate diploma in bio-entrepreneurship from the University of Pennsylvania.

Sundeep Shrivastava
Director, Medical Devices & Diagnostics Quintiles Asia-Pacific

Mr. Shrivastava is responsible for advancing Quintiles’ Medical Devices & Diagnostics business in Asia-Pacific. He has more than 18 years’ experience in leading business operations and clinical research projects involving medical devices, including pivotal first-in-human studies and post-marketing studies in Asia and the European Union.

Prior to joining Quintiles, Mr. Shrivastava held key positions in the areas of clinical research, portfolio management and marketing and business development with Guidant Corporation and Abbott Vascular. He has extensive experience in coordinating with local regulatory bodies regarding approvals for clinical studies and to commercialize products in Asia.

He earned his bachelor’s degree in statistics from the University of Bhopal and his MBA from the International Management Institute, New Delhi.

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APBN Editorial Calendar 2018
January:
Obesity / Outlook for 2018
February:
Searching for the fountain of youth
March:
Women in Science - Making a difference
April:
Digestive health in the 21st century - Trust your guts
May:
Dental health - The root to good health
June:
Cancer - Therapies and strategies for better patient outcomes
July:
Water management- Technologies for biotech and pharmaceutical industries
August:
Regenerative medicine / Biotech start ups
September:
Digital healthcare / 3D printing
October:
Bones / Breast cancer
November:
Liver health / Top science research nations & institutions
December:
AIDS / Breakthrough of the year/Emerging trends
Editorial calendar is subjected to changes.
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