Orthopaedic Device Approval Through the Premarket Approval Process: A Financial Feasibility Analysis for a Single Center
The 2 main routes of medical device approval through the U.S. Food and Drug Administration are the premarket approval (PMA) process, which requires clinical trials, and the 510(k) premarket notification, which exempts devices from clinical trials if they are substantially equivalent to an existing device. Recently, there has been growing concern regarding the safety of devices approved through the 510(k) premarket notification. The PMA process decreases the potential for device recall; however, it is substantially more costly and time-consuming. Investors and medical device companies are only willing to invest in devices if they can expect to recoup their investment within a timeline of roughly 7 years. Our study utilizes financial modeling to assess the financial feasibility of approving various orthopaedic medical devices through the 510(k) and PMA processes. The expected time to recoup investment through the 510(k) process ranged from 0.585 years to 7.715 years, with an average time of 2.4 years; the expected time to recoup investment through the PMA route ranged from 2.9 years to 24.5 years, with an average time of 8.5 years. Six of the 13 orthopaedic device systems that we analyzed would require longer than our 7-year benchmark to recoup the investment costs of the PMA process. With the 510(k) premarket notification, only 1 device system would take longer than 7 years to recoup its investment costs. Although the 510(k) premarket notification has demonstrated safety concerns, broad requirements for PMA authorization may limit device innovation for less-prevalent orthopaedic conditions. As a result, new approval frameworks may be beneficial. Our report demonstrates how current regulatory policies can potentially influence orthopaedic device innovation.