Glimpse Behind the Scenes of a Medical Device Company
This post aims to lift the curtain on the inner workings of a medical device company developing IVF lab equipment in the fertility technology field, providing a glimpse into what happens behind the scenes and a peek beyond the facade of the usual product promotions and sales. Specifically, this post focuses on the very beginning of the process: what drives a development of a new product and how the earliest stages are profoundly critical for the success of the product.
Product Development Process
Product development process, especially in biotechnology and medical device areas, is driven by a combination of innovation, analyses and technology culminating in product manufacturing and launch. Developing new products involves extensive research, design, testing, and iteration, and each stage is crucial to ensure the final product meets the highest standards of quality and safety.
Financial Realities
While companies and product development professionals would love to build innovative products without budget constraints, the reality is that companies have limited funds and must use them wisely. Start-up companies in med technology with big ideas may receive funding from investors willing to gamble on their success. Unfortunately, often these gambles fail when commercial realities hit, and the company and the investors don’t get a return for their investments.
New product development is also a gamble for established biotech companies. Most of their revenue go into running operations such as manufacturing, sales networks and after-sales services to their customers. Therefore, any investment in new product development must eventually recoup its costs and ideally generate income for further investments.
This acknowledgment of commercial realities is particularly harsh in the field of assisted reproduction technologies, which is largely driven by emotions and sincere desires to help people achieve their dreams of starting a family. However, without these financial considerations, no new innovations can be realised or delivered.
Understanding the behind-the-scenes workings of a medical device company highlights the complex balance between innovation, financial constraints, and the ultimate goal of delivering life-changing products. Despite the challenges, the drive to innovate and improve lives remains at the heart of the industry.
Journey Through the Gates: The Product Development Process for Medical Devices
Product development process for medical devices is strictly controlled and must adhere to internationally recognised standards, most notably ISO 13485, which governs the entire life cycle of a medical instrument. Compliance with these standards is essential, but much relies also on common sense and standard good planning.
Stage-Gated Process
The process is best conducted in logical steps, starting from laying the groundwork on which all subsequent steps are built. There are a few different recognised approaches to achieve this, but most adhere to the so-called stage-gated approach. In this, development projects proceed through different stages and are evaluated at the end of each to determine whether the project should continue or if any issues have been identified that make it impossible or impractical to proceed.
The advantage of stage gates is that if the project seems to be on the wrong track, it can be stopped immediately, preventing further investment in a failing project. While it can be frustrating to stop after significant effort has already been invested, it is ultimately better than continuing and ending up with a failed product.
An example stage-gated process can be divided into three main areas: Innovation, Design, and Commercialisation, this post focussing specifically on the earliest phase of the Innovation stage, Analysis.
What to develop?
What triggers the development of a new product? Sometimes all you need is a novel idea. However, the trigger often comes from detecting a product opportunity gap by identifying a need that customers in the field have, for example the recent push and need for early embryo viability assessment, or general improvements to human embryo incubators, whether time-lapse incubators or bench-top incubators. The detected opportunity may not necessarily be what the customers say they need, but originates from a deeper understanding of what can help them to achieve an outcome or solve a problem. This insight can come from experts in the field who know its processes and operations well, or more interestingly, from an outsider who asks questions others may not think to ask.
How to Delve Deeper: Understanding Customer Needs in Product Development
The Importance of Understanding
Understanding customers allows delving into their pain points. What challenges do they face? What outcomes are they seeking? Only by understanding the “why” behind their requests is it possible to create meaningful solutions.
Look Beyond Surface Requests
Customers often express their desires based on what they know or have experienced. However, their stated preferences may not align with what they truly need. Product developers must ask probing questions: Why do you do things this way? Could there be a better approach? What are you truly trying to achieve with that?
Avoid the “Fast Horses” Trap
Henry Ford famously said, “If I had asked people what they wanted, they would have said faster horses.” Customers tend to propose solutions based on their existing frame of reference. A product developer’s job is to dig deeper. What problem are they trying to solve? What unmet needs exist?
Laying the Foundations
After identifying an idea, customer need or product opportunity gap, several key steps must be undertaken. This is a critical part of any project, and how well this foundation is laid may determine the project’s success or failure. It is also the base on which all subsequent project stages are built, fine-tuned and polished as the project progresses.
- Market Analysis: One of the first steps involves identifying who needs the planned solution. For instance, if the need is for something very specialised, such as a product that only 40 clinics or 5% of the end users in the world would require, it raises the question of whether it is feasible to develop it. Would the company recoup its investment with only a limited number of customers? Additionally, market size must be considered. Is this issue or need recognised in every country or only in a few, or only in a very specified user scenario?
- Competitor Analysis: Another critical aspect is examining competitors: How do customers currently meet this need or solve this issue? Is there a gap in the market, or are there existing competitors offering solutions? If so, what is the cost of their solutions to the customers? Any new product must compete either by price or by offering superior features that justify higher prices, or by providing savings in other areas, thereby offering a true value proposition for customers.
- Business Case: A business case is simply an estimate of financial pros and cons: Would the company get returns on its investment or even make its money back? At least a preliminary investigation must be done at this early stage, considering expected revenues (Market Analysis) and anticipated costs of the project including not only the initial product development and launch costs, but also ongoing manufacturing and after-sale costs (Cost Analysis).
At early stages none of these may be known accurately, but there should be at least a reasonable understanding of them. As the project progresses further towards ideation and fine-tuning the product, the accuracy of these analyses and business case projections needs to be revisited many times.
Intellectual Property and Freedom to Operate
Another important aspect is the consideration of freedom to operate (FTO) and intellectual property (IP), the former being more crucial at this early stage. If significant money and effort are invested in developing a product without analysing FTO, the company might find itself in a situation where someone claims ownership of the technology, preventing the company from selling the product, or necessitating costly licensing agreements with the IP holder.
FTO should be conducted by professional patent attorneys who can thoroughly investigate existing patents and technologies related to the idea. If the FTO analysis shows no competing patents and indicates that the planned solution is not already in the public domain, the company might be onto something valuable. At this point, it is essential to consider whether to pursue patenting the innovation or to keep it as a trade secret, protecting the manufacturing know-how in other ways.
Legal, Ethical and Regulatory and Considerations
Addressing legal, ethical and regulatory environment at the start is also important. Is the solution to the problem legal and ethical? What do the regulations and rules in different countries say about it? Before thoroughly scoping the product, it is not possible to delve into specific regulatory requirements, but they should be at least examined to gain a preliminary understanding.
Identifying and Mitigating Risks
The concept of risk also needs to be examined. What are the risks of the project from technological, legal, ethical, market, competitive, and commercial perspectives, as well as from the IP point of view? Additionally, internal risks must be considered: Does the company have internal capabilities to execute the project or will it need to engage external experts? Are there enough resources and funds to execute the project? What are the risks if any of these imagined threats are realised?
Once the risks have been identified, product developers must devise risk mitigation actions to address them. The advantage of being proactive is that as a result, risks may never even materialise due to proactive mitigation strategies and actions.
All these areas must be examined from the start, but it must be understood that they are only rough estimates and all subsequent stages will add more information, depth, breadth, and accuracy to them.
The Product – Developing Proof-of-Principle
Not last and definitely not the least is the product itself. What would it do? What technology it utilises? After gaining an understanding of the needed product functionalities, the product team starts to develop proof-of-principle test beds and test them in the context of the intended use, coming up with results and recommendations for the next iterations. Several of these test beds can be built separately to address different features of the product, for example in the case of timelapse incubator (time lapse machine), addressing separately IVF incubator temperature alarm system, temperature monitoring system, incubator camera and optics, incubator gas mixture and its control and so forth. Often these crude test beds consist of mechanical contraptions with wires and tubes sticking out, looking nothing like the final elegant product – but it is a start.
Outcomes of the Analysis Stage
The final outcomes of this first Analysis stage are twofold: 1) The proof-of-principle technology & product and 2) The project plan, also called a project management plan. This plan defines how all the subsequent stages of the project are intended to be conducted, what inputs are needed, what outputs are expected, as well as the current status and references to the initial findings of different analyses. This plan must be as accurate as possible but also acknowledge that it will likely change in the future as the project progresses and new things are discovered.
Finally, all the stakeholders representing key areas of the business gather for the first stage gate review to determine if the project has enough merit to proceed. The outcome of this meeting is sometimes called a Design Goal – an acknowledgment that the project now has clearly defined goals to aim for and the new product planning and execution can continue.
Large technology companies may execute dozens or even hundreds of these early-stage analyses, with many of them discontinued at this stage for various reasons: the market may be too small to justify the investment, regulatory requirements may prevent the product’s execution, there may be no freedom to operate because someone else already owns the intellectual property, or some other reason preventing continuation.
Analysis stage is extremely important for any project. Its advantage is that it is relatively inexpensive, involving mainly internal resources and their expertise and time and perhaps some external consultant fees, but does not require significant engineering or chemistry work or external support.
Written by Teija Peura.