Covid-19 Is A Healthcare Disruption Catalyst

Imagine the same scrappy startup ingenuity that bore Google, Twitter, Microsoft, and Apple entered the field of medicine. Wouldn’t that be something? But the biggest reason startup innovation has eluded healthcare for so long is the FDA’s current structure. As I eluded to in the podcast, I firmly believe that will change as Covid-19 ushers in an era of healthcare disruption. 

The Innovation Problem In Healthcare

As I concluded a meeting with a MedTech client of mine, I asked a question that had been bothering me for months. With their new capabilities, why hadn’t they minimized and updated the size of their current device? The benefits weren’t just aesthetic, but less bulk for patients. The reply was simple, they didn’t have a few million dollars on hand to re-submit it to the FDA.

In an odd twist, the regulations designed to keep us safe, also make it nearly impossible for iteration of current technology, and more importantly, new MedTech startups. Whether this setup is by design or simply an unintended consequence of safety, the FDA’s red tape keeps startups out, and old legacy players in. Politicians from both sides see the problem.

When he was running for President, I asked Congressman John Delaney about the excessive FDA red tape, and if the barrier for startups should be taken down or at least fast-tracked. “I’m always in favor of streamlining red tape and eliminating duplicative regulations which, as you properly point out, don’t hurt big companies because they hire big teams of people to deal with it. They hurt small companies. They hurt the innovators.” Delaney is right. The small startups capable of beneficial healthcare disruption are being kept out.

My interview with Congressman John Delaney on FDA Red Tape. FULL INTERVIEW »

Delaney affirms what the startup MedTech community has struggled with for years. While a massive company like GE or Philips has plenty of cash to get new devices approved, a 3-person team with no budget does not. While it’s irresponsible to paint all regulations and the FDA as bad, there is clearly an innovation barrier, and it’s one that might be changing soon from an unlikely catalyst: Covid-19.

Why Covid-19 Should Spark Healthcare Disruption

With the rising concern of Covid-19 in the USA, the FDA was thrust in the spotlight with the concern over the availability of medical masks, ventilators, and the possible efficacy of hydroxychloroquine. To combat the pandemic, innovators who are agile and intelligent were quick to offer their help, but they ran into a barrier. The FDA.

R&D company, Battelle, invented a way to sterilize and re-use masks quickly, prompting Governor Mike DeWine of Ohio to tweet a personal plea to the FDA. “Battelle has developed new technology to sterilize surgical masks. […] As soon as it is approved by the FDA we can begin using these. […] I mention this because I appeal to the FDA – Please give us the approval to use these.”

In a similar fashion, entrepreneurs like Elon Musk, and James Dyson rushed to create ventilators, and yet again, the FDA had to be pressured to ease regulations, finally granting an emergency exception for the modification of devices to be used as ventilators, according to The Wall Street Journal. Similarly, Abbot after creating a new 5-minute test had to be granted special emergency approval from the FDA.

While I’m pleased the FDA finally acted, not all MedTech companies have millions of dollars in the bank or have a Governor ready to personally advocate for them as they attempt to bring solutions to the healthcare industry.

The reality is this: The FDA is supposed to protect American consumers, but is a barrier that keeps out new ideas, and has obstructed healthcare disruption.

The FDA Is Too Slow For MedTech Innovation

Speaking to my client Accumold, a maker of high-precision micro-molded components, Scott Huennekens the former CEO of Alphabet’s medical arm Verb Surgical expanded on the issue. “If you look at Continuous Glucose Monitors, you have a transmitter, a pump and a sensor that can be made by three different companies. The FDA allows interoperability between those, but it’s just been in the last two years, if you had a piece of software that you added on to your device, then you have to get it approved even if it had a common interface like an API. So, it would be like saying every app on an iPhone had to go through a different approval process.” In other words, by the time the FDA has approved your technology, it might already outdated.

“I’m not saying there shouldn’t be regulation, there should be; there absolutely has to be, to protect nations, and so we don’t face-plant. But we have to be willing to take on a reasonable level of risk in certain areas.” Huennekens explained.

Because technology is constantly adapting, improving and changing, it’s questionable if the FDA can keep up, in a manner that benefits our collective health. I’m told the current FDA process can take years, locking out inadvertently protecting the industry against healthcare disruption. With Covid-19, this has become painfully obvious. It would make sense to see the FDA completely rethink their structure, making way for startups.

Can Startups And Healthcare Disruptors Actually Help?

Startups absolutely can innovate in healthcare, and in fact, they already make technology that surpasses the quality of medical-grade equipment. Again speaking to Accumold, according to Carolina Mora Lopez, Ph.D. degree in Electrical Engineering from the KU Leuven, Belgium, there are numerous examples of consumer-grade tech rivaling, and even surpassing, medical-grade tech.

Asked if we are now at the point where consumer wearable devices are outpacing the diagnostic performance and quality of costly equipment in the average hospital she explained, “This is certainly the case for wearable devices that can permanently detect changes in the physiological signals of the body. Such devices can provide similar signal quality at a much lower cost, while still providing the great advantage of continuous monitoring which is missing in standard hospital equipment.”

Because I work in PR / comms with emerging tech and MedTech companies, Lopez’s experience is confirmed by my own. I’ve seen tech that far exceeds medical-grade devices, but isn’t used by hospitals because the FDA has granted access. This tech is backed by industry-leading healthcare experts and DARPA-backed R&D companies but has difficulty making the jump into commercial healthcare. But we’re now at a turning point.

I believe Covid-19 may be the wakeup call the medical industry needed to open up healthcare disruption. Even before this Covid-19 pandemic, influential voices were already cautioning big medical companies their time may soon be over.

Sven Gábor Jánszky, a medical futurist, lecturer, and leading voice in MedTech has this warning. “As a futurist and future strategy consultant, the biggest failure of healthcare OEMs will be to think that their industry is highly regulated, they are secured by regulation, or that no other players can enter the game or change the rules.”

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