The long road to FDA clearance

The holy grail for medical devices in to clear US FDA.  Perfint healthcare and Forus healthcare are working on the process on getting the clearance to expand into the US market. Both of them are at different stages of the clearance process.

Both the companies are working on the 510(k) route. It is based on medical devices similar to yours that have already received 510(k) clearance from the FDA, called “Predicate Devices. The 510(k) process applies to most Class II medical devices sold in the US and a small number of Class I and Class III devices as well.

The Emergo Group performed an analysis of publicly available FDA 510(k) data pulled from the FDA website.

• The analysis has shown that 95-97% of all 510(k) applications cleared by the FDA occur within one year of initial submission date.
• The number of 510(k) submissions submitted in 2011 which cleared within 3 months increased to 42% from 40% and the average number of days decreased to 138 days.

The average time for approval for various devices is as follows.

One important factor to keep in mind is that the FDA does not "approve" medical devices; they "clear" them for sale in the US. One could have a product that has been sold across the world, with doctors using them regularly, but for the product to be sold in the US it has to be cleared first by the US FDA. Given the size of the US market and their focus on reducing the overall cost of healthcare, it is an opportunity that is very difficult to ignore dispite the pain.





 

Regulatory approvals for Med-Devcies across the world

I was at the Perfint healthcare labs yesterday. I am extremely proud and amazed at the progress the company has made since the first time I met Nandu and team in 2007. What I saw there was cutting edge technology in interventional oncology. Technology that can re-create 3D and volumetric data of the anatomy around soft tissues. Th platform can revolutionize the way ablation planing can be done by radiologists using either CT or the Ultrasound. To my simplistic mind what I saw was like ablation for dummies...
The company has had its share of challenges. There are not many examples of high end technology being built out of India that too in medical devices. Given the nature of the domain, various countries across the world have certifications, registrations and clearances that are required before the product can be introduced.
Following is the list of approvals that are required in some of the countries. This will be useful if you are looking to expand into these countries. I have also added the approximate cycle time that will be required for approval.

Country registration details
Sno	Countries	Technical Documentation- Preparation Duration	Approval cycle time	Remarks
Import license /Voluntary registration /Notification
1	Malaysia	1 week	1 month	Voluntary registration- Allowed to sell prior to registration
2	Philippines	1 week	1 month	Import license issue needed
3	HK	1 week	1 week	Voluntary registration- Allowed to sell prior to registration
4	UAE	NA	NA	Import formalities
5	Kuwait	1 week	1 Week	Import formalities - Al perfirn product have been included in the notification
6	India	NA	NA	Ready
7	Vietnam	1-2 weeks		Import license needed
8	Thailand	2-3 weeks		Import license and thai FDA registration needed
	New Zealand	1 week	1 week	Notification to NZ WAND
9	Chile	NA	NA	Ready
IEC/EMC/FQC Test certificate required
10	Indonesia	1 week	3- 4 months	Ministry of health registration needed
11	Colombia	4-8 weeks (Translation involved)	3-4 Months after submission	INVIMA registration needed
12	Canada	1 week	2-4 weeks after submission	HC approval needed
Only CE Certificate required- Allowed to sell
13	Netherlands	CE TCF creation		CE mandatory
14	Sweden	TCF creation		CE mandatory
15	S.A	1 Week	1-2 weeks	CE mandatory +41 BM form to be filled
16	Jordan	1 week	1-3 weeks	CE mandatory
17	Germany	CE tcf creation		CE Mnadatory
18	Poland			CE mandatory
19	Belgium	CE tcf creation		CE mandatory
20	Spain	1 month Translation Needed		CE mandatory
21	Portugal	1 month Translation needed		CE mandatory
22	Italy	1 month (Tranlslation involved)	1 week after submission	CE +NSIS registration needed
23	Turkey	1-2 months (Tranlslation involved)		CE mandatory. Can export. (Additional product registration required)+ Bar code
CE/FDA+TCF docs+Approval time
24	Russia	around 8 weeks (Translation involved)	6 months after submission	CE+Notarisation needed+Registration needed
25	Saudi	2 days	One month from CE	CE dependent.Other documents ready+Saudi fda registration needed
26	Australia	2-3 days	Time cannot be predicted	TGA registration needed
27	Israel	1-2 weeks	4 months after submission	Ministry of Health submission needed
28	Mexico	5-8 weeks (Translation involved)	3-4 Months after submission	Expedited route of HC approval COFEPRIS registration needed
29	Singapore	4 weeks	6 Months after submission	HAS registration needed
30	Argentina	5-8 weeks (Translation involved)	6 Months after submission	ANMAT registration needed
FDA
31	US	3 months +Usbaility study	120 days	510K clearance needed
CE Certificate+TCF+ additional testing required
32	Brazil	2-3 months (Testing, Translation involved)	3-4 months after submission	INMETRO Certification+ANVISA needed
33	China	12 months (Testing, Transltaion involved)	3 months	Type testing in china+SFDA submission
34	Korea	2-3 months (Translation involved)	25 working days after submission	Type testing in Korea+KFDA TCF submission+Korean GMP certification process +CB EMC and safet certification waives korea testing
35	Japan	2-3 months (Translation involved)	1 year	No additonal testing+Documentation+Foreign manufacturer accreditation needed
36	Taiwan	4 months	6 months after submission	QSD application and Product certification

The journey to becoming a global med-device from India is far from over, but I am very excited to be part of this journey with Nandu and team.

Entrepreneurs are getting younger

Six years is not a lot of time considering the overall lifecycle as a professional. But to me it does seem the world has changed a lot in the course of that time. I have been a witness to how businesses have reacted to various incidents such as economic slowdown, the jasmine revolution to anti corrution drive in India.But one thing that I have noticed is that in the early days as a VC I would meet a lot of people who are senior to me starting up companies. I am seeing a clear shift in that pattern.

Today I meet a lot more youngsters who are starting up companies especially in the technology side. One obvious thing is the fact that I have grown older in the last six years, but more importantly I would look at this as a reflection of the current times. We are a young population and the youth toady are willing to use technology to address most of their problems.

Technology itself has evolved, stuff like social, cloud, bigdata, etc was not as prevalent even 5 years back. Software will drive productivity, collaboration access and transperency. The cloud, smartphones, connected devices and tablets will drive opportunites that can create both social and econimic changes and it will be driven by the youth who are at the forefront of this tech curve.

It is important for the venture community to understand this change and keep pace. Entreprenuers are not looking for dumb money. Fundamentals of building a good company has not changed however, the rate of change in the way products/services are created, communicated and consumed is mindboggling.

Traditional models are being re-written at a rapid pace. Being young entrepreneurs, they do not carry the legacy of the past.  They are looking to partner with people who have the experience of building business but also can help them adapt to the fast changing nature of business it self. In this context VC's too have their work cut out.

How do I reach out to a VC fund?

This is the beginning of the season of events. TiE Chapters, VC Circle, Your Story, Unplugged, IAN, MA, incubators the list is endless. All of them are all putting together events that focus on entrepreneurship. It is a great place to network for early stage founders, potential recruits, wanna be entrepreneurs and of course VCs. There will always be a few sessions on fund raising at all these events.

Two questions that always come up during these discussions.

When is the right time to reach out to a VC?
I am of the opinion that there is no one best time to meet a VC. In India, there are not many funds that back companies which are still on paper. Most funds will look for some validation from the market for your product or service. We at our fund track companies that are very early for us on a continuous basis.We reach out to them regularly to understand the progress and also sometimes push young companies towards certain goals which increases the chances of funding. It also helps us to understand the product, culture and more importantly the entrepreneur better. I would guess it works the same way for the founder too. So that's why I would recommend building a relationship with a few VC's can only help whether you are looking for capital or not.

How do I reach out to a VC fund?
There are over 200 funds in the country working on different models starting from dedicated teams based here to people who fly in and out on a regular basis. Last year at out firm we saw over 1,500 business plans. This I am sure is the case with most of the active funds. Given the size of the teams this is a large number of plans that need to be screened. So to cut through the clutter, the best way is to reach the firm through a referral. Find someone in your network who is connected to these funds. Today with all the social media more channels are open to reaching out to firms whether on Linkedin or twitter.The events  provide another platform to reach out. It is not that the other ways don't work, this is the fastest way to reach out. The VC's are also constantly looking out for new companies and entrepreneurs. We have very active outbound program where we reach out to companies based on our research.

One piece of advice for entrepreneurs reaching out to funds, do a little bit of work on the people at the fund. Not everybody will be looking at all the sectors, so it is important to reach out to the investment professional who understands your sector best and has investments in similar domain. One look at the statistics will tell you that most of the time money chases good companies and not the other way round. At out firm we strongly believe that the entrepreneur comes first and the VC next.

Attributes of a startup CEO

I have been fortunate enough to work with a set very good tech entrepreneurs. I have also as an investor, come across people who have fantastic skills in product development. What differentiates the two is that the former understands that building the product is not the end game. Value realization is in customer adoption. As a founder one has to have strong passion and conviction, articulate a vision, inspire people etc. Apart from these there are also a few very fundamental attributes that I think are critical.

Sell,Sell,Sell
To build a good product is so much more under your control than to get someone to pay for it. When is it the right time for the founder to get someone on board to sell? To arrive at this balance is what most tech start up teams struggle. To have someone in your founding team with customer facing skills is the ideal situation to be in, but it is not necessarily the case all the time. I am of the opinion that as a founder there is nobody better in the company who can talk more convincingly about the value of the product and company than you. In fact as a founder you are constantly selling, to customer, potential hires, investors,etc.

Cashflow is king
I have seen a number of firms with offerings like CFO on demand . They add value no doubt as start-ups cannot afford a CFO in their early stages and are more focused on product development. In fact most technology founders shy away as soon as you talk finance. As a techie you might not know profit and loss, balance sheet, etc. But as a CEO you have to understand finance. If you shy away from knowing / looking at the burn, you are on the way down the tube.

Metrics and Measurement
Another important attribute that I look for is how ruthlessly  one measuring the progress. To have a strong metrics driven discipline from the beginning is very critical. It also shows how honest you are to your self being at the top. One might not get it right all the time but to be more sure about the decisions that are made information will go a long.

If you are looking to branch off on your own, I would encourage you to spend a little bit more time on some of the above too. Building a company takes a lot more doing than a product.

If you meet the Buddha, kill him

There is a purpose to why we are all here is what we are taught. We are in a constant endeavour to find the purpose and fulfill our obligation. There is a very famous Zen Koan which goes like this "If you meet the Buddha on the road, kill him".

Like most things in Zen, it is up to the individual to derive his own meaning and so there are many interpretations of this. The one I tend to agree with most is that it is not possible to see a Buddha outside you. Buddha is inside you, in fact you are the Buddha. It is not for one to replicate, but to find your own. And my belief is that it will be different for each. One cannot find a purpose outside, maybe there is no purpose at all and there is no shame in that. Enlightment might be in just understanding that there is no purpose afterall.

Where are the doctors ??

Healthcare is one of the largest industries globally estimated to be around $2.8 trillion. In India the industry is valued at $79 billion growing at 17%. It is projected to hit $280 billion by 2020. These are large numbers very difficult to ignore, if you are an investor. Also, when you consider that 75-80% of the healthcare expenditure in India is spent by the private party.

Not surprisingly the sector has attracted a lot of investments the the last 24 months.

A staggering $600M has gone in the 2012 across 19 deals. This is the investment in health care delivery alone. Given where we are as a country my belief is that more investments are required to build our health care ecosytem. We need many more hospitals, specialized and otherwise to cater to the massive demand. But here is something I worry about...

We have about 450,000 doctors in our country. This means 1 doctor for about 2,500 people. We produce only 51,000 doctors in a year. About 1,000 of them go abroad for further studies. To change this ratio will take time given that it takes a minimum period of 5 years for a doctor to graduate. So all this capital going in to create infrastructure will hit a wall because there are not enough doctors around. Further, the willingness of a doctor to go to smaller towns will reduce as more money will chase them in bigger towns and cities.

A lot of money has gone into specialized care delivery whether in eyecare, diabetes, nephrology, etc. The ratio of specialists are even more dismal. Not much has gone into increasing the support system. demand for nursing, paramedics, etc will also go up if we are to reach better standards of healthcare delivery.

There must be a more planed investments from the govt to increase the pool of doctors today to see the benefits 5-10 years from now. They have come up with this plan of asking students who go abroad for higher studies to sign some kind of bond which I think is ridiculous. Instead they should focus on incentivizing people who are willing to stay back.