Almost half of medtech companies expect to spend 5% or more of their annual revenue on the EU Medical Device Regulation, results of a 101-company survey conducted by German software company Climedo Health suggest.
The firm's analysis of survey data reported that hiring extra staff, investing in clinical development and the initiation of other activities needed to comply with the delayed-but-still-looming European Union regulation are driving up costs at medtech companies.
The costs are, in part, a reflection of ongoing uncertainty about the impact of MDR. Almost 70% of the surveyed companies spend most of their MDR-focused time trying to understand the new requirements.
The cost of compliance with MDR is a long-standing concern for the medtech industry. Back when the regulations were being devised, MedTech Europe estimated changes including the introduction of unique identifiers would cost the industry around €7.5 billion (about $8.95 billion under current exchange rates). At that stage, the trade group was trying to push back against an estimated €17.5 billion in potential additional costs.
Once MDR was finalized, big medtech companies deemed the rules significant enough to require an additional disclosure to investors. Boston Scientific, for example, told shareholders coming into this year that “significant investment” over the next few years would be needed to meet the raised compliance requirements.
Climedo polled people at 101 companies, the majority (95%) from German-speaking countries and more than three quarters (77%) medtech manufacturers, to gauge just how significant an investment will be required. The responses show half of the surveyed organizations plan to spend more than 5% of their annual revenues on MDR. A further one-third of respondents expect to spend 1% to 5% of their revenues on the regulation.
Most of the companies polled by Climedo employ fewer than 100 people. However, the survey also captured the views of more than 15 companies that employ more than 1,001 people.
Two-thirds of companies surveyed have hired, or plan to hire, one or more employees due to MDR. A significant minority of companies are taking on five or more employees. New and existing employees at 55% of companies are spending more than five hours a week on MDR. Understanding the requirements is the most time-consuming activity.
Those tasks are unlikely to be the biggest cost, though. Three-quarters of respondents expect clinical evaluation and clinical studies to be the most expensive aspect of MDR compliance. Activities linked to postmarket surveillance and post-market clinical follow-up are the next biggest cost.
The release of the insights into the amount of time companies are spending on MDR comes amid ongoing concerns that the delay to the date of application of the regulation is insufficient to prevent problems down the line. Earlier in August, German medtech trade group BVMed called for the EU to also extend the MDR transition period by one year.