United States: FDA Deep Dive: Real Life Implications Of FDA NEST Program Explored

In our Israel Connect Summer 2016 edition we summarized the FDA's post-market surveillance data programs, including the NEST program designed to consolidate and analyze real-world device data once a device is legally commercialized. In late June I had an opportunity to sit down with a medical device industry veteran, and one with a uniquely international perspective, and we discussed in detail the practical impact of the planned NEST program.

Bethany Hills ("BH"): Oded Kraft ("OK"), you've been involved in the medical device industry, both with established industry giants and also with small, nimble start-ups, for nearly two decades. What do you think about the FDA NEST program?

OK: It's great to see the FDA taking the NEST path. Companies, even if informally, make use of data resulting from on-going use of the products when monitoring complaints, assessing competition, reviewing third party publications, and addressing issues found in-house. This is especially true for companies marketing in the EU.

BH: So since companies are already seeking out and utilizing this data, the FDA NEST program only has a positive impact?

OK: I do wonder whether the reliance on Post-marketing surveillance data would really reduce the burden of collecting data prior to launching like has been promoted as a benefit of NEST. After all, it is the FDA's stated role to ensure the safety and effectiveness of the cleared/approved products before commercialization. And in addition, there is the question of whether the agency would force companies to recall products from the market should the post-market surveillance data reveal issues. I am not advocating that we should leave unsafe products in the market, however, reducing pre-market burden by collection of post market data, without looking at the entire clearance/approval approach would leave the companies with no choice but to keep on running the same pre market studies, regardless of the promises within the NEST program. What company will want to take the financial and brand risk of a recall post-launch if those issues can be addressed in the clearance or approval process?

BH: Interesting. The potential for FDA to swing the pendulum to post-market enforcement is important. Certainly our clients are always pushing for a quicker path to market and the NEST program seems to be promising that.

OK: But companies today, especially startups and smaller growth stag companies, plan a limited availability period when launching to limit financial and brand risk exposure. Yes, NEST could become another tool for companies' managements and boards to manage the go to market timing vs. post market risk. Yet, another side of this decision is the strategic path of the company itself. It is not unusual for startups to acquire an FDA approval/clearance in order to gain the interest of a corporate partner for an M&A or investment opportunity. The startups would typically want to accelerate the FDA process, meaning the NEST post market surveillance options to reduce pre-market data requirements would be very attractive. But risk averting corporate partners or investors may prefer to either resolve the risk ahead of time, devalue the company if the risk is not sufficiently resolved, or establish milestones for post-market surveillance that could be burdensome or delay corporate growth. Not a pleasant decision, but nevertheless, an important tools in the hands of startups.

BH: I agree with the concerns corporate partners and investors might have about the uncertain nature created by a shift to heavier reliance on post-market data and enforcement. We've talked about the main post-market risk area–off-label use and promotion–as another risk area that could be impacted by as policy shift where FDA highly values post-market data.

OK: Yes, there could be an additional upside here. If a device company could rely on the NEST data to expand intended use and indications post launch, then the NEST approach would bring real value. It would also bring the official labeled use (cleared or approved through the pre-market process) to par with real life experience and use. In a world revolving around consumer technologies launching a new product every other day, and leveraging social media to share best known methods, it's time for the healthcare industry, FDA included, to join the club.

BH: Thanks Oded! We certainly have a lot to follow with the evolving NEST program and the practical impact on our device clients.

Oded Kraft Biography: Oded is the VP of Product Development at Kornit Digtal, leading a team of over 100 professionals developing digital printing solutions for the textile market. Previously, Oded served in an executive business role with Roche Diabetes Care, Germany, leading the 10 year product portfolio and strategic roadmap (business worth of over $600M), and VP Products at Medingo, a medical devices company, acquired by Roche GmBH in

2010 for $180M. Throughout this time, Oded has been working with several startups in various capacities, integrating technology with business goals. Prior to joining Medingo, Oded worked at GE Healthcare Nuclear Medicine division as a Global Segment Leader, and before that, in various R&D positions with GE Healthcare, the IDF, and 5 years with a DoD company in the US. Oded holds an MBA and a BSc in Electrical Engineering from Technion-Israel Institute of Technology. Oded is not affiliated with Mintz Levin and all opinions expressed are his own.

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