104: Medical Device Certification vs Wellness Device

Product Startup
104: Medical Device Certification vs Wellness Device
With Bryon Bhagwandin, A 20-Year Medical Device Entrepreneur

00:00 | Kevin Mako (KM): Hello product innovators. Today, we learn from a Ph.D. and serial product entrepreneur on developing and launching a medical or wellness hardware product.

00:10 | Voice-over: You’re listening to the Product Startup podcast. The show that helps bring your product idea to life, by chatting with successful inventors, product developers, manufacturers, and hardware industry professionals. Our goal here is to get to the bottom of what makes a product successful, from initial idea to getting your product on store shelves. We’re taking you step by step to build a functional product and scale your product business. Hosted by Kevin Mako, one of North America’s leading experts on hardware development for small product businesses. Now, on to the show.

00:46 | KM: Welcome back everyone. Today, I’m very excited to introduce Bryon Bhagwandin to the show. Bryon is a 20-year medical device entrepreneur with over a half dozen products in the market. He has won a number of awards, including the Top 100 in R&D Magazine. He also has a Ph.D. from the University of Washington in Medical Devices and Hardware.

01:03 | KM: Today, Bryon is going to share some valuable knowledge for hardware startups, inventors, and small manufacturers on the difference between a medical device and a wellness device. And if going the medical device route, what are the steps and best practices to get certified? Now on to the episode. Hey Bryon, welcome to the show.

01:18 | Bryon Bhagwandin (BB): Thanks for having me. I appreciate it.

01:20 | KM: Happy to have you on. How’s life in Denver right now?

01:22 | BB: Today it just started to flurry so I’m getting ready for the snow. But it’s good.

01:27 | KM: Good stuff. Well, look, I’m excited to talk today about medical devices. And looking at the difference between wellness devices, medical devices, and the pros and cons between both. But first and foremost, you’ve got an incredible history, half a dozen products developed in the medical space, your Ph.D. as well. Just give us a quick background of how you started with all this.

01:45 | BB: Yeah. So I have two degrees in physics and grew up in the Midwest of the United States. And I got hired by a drug company, Eli Lilly, and found myself feeling like a little fish out of the water. I decided to try and combine my physiology background and drug development background with my engineering in physics.

02:03 | BB: And so I went to pursue my Ph.D. in biomedical engineering and applied that to medical devices. What I’ve done for the last two decades now is develop medical devices.

02:16 | KM: Amazing. So let’s talk about the difference to start. What is the difference between a certified medical device and, essentially, a wellness or a health device?

02:26 | BB: That’s a great question Kevin. There are a number of devices in the marketplace that we think of as wellness. There’s a big surge these days towards wellness. A lot of people who want to track their heart rate might want to track their blood pressure.

02:43 | BB: There are a lot of over-the-counter products that you can pick up, even stress monitors are out there. Those are all wellness devices. They are not cleared by any kind of regulatory agency, the FDA, or the medical device directive in Europe.

03:01 | BB: And as a consequence, they really can’t be used to make decisions about your medical health, and I think that’s probably the biggest difference. That clearance is given so that you can sell to the clinic and decisions can be made about how to treat your health.

03:20 | KM: Yeah. I think that’s really important, especially if you’re developing a health wellness product, medical device, or whatnot, to really think about your business going forward. And where do you want to sell that?

03:31 | KM: Because there’s quite a big difference between the accessibility you have when selling something that is certified as a medical device and where that can be sold. As opposed to a health and wellness device, which is just generally over the counter selling to the end consumer.

03:45 | BB: Right. And I think it’s important to know where you want to take your product. What is the product-market fit? And sometimes you may say both. You may say I’d like to have a wellness product and I would like to have a medical device.

04:03 | BB: And if that’s the case, and you think there are channels outside the traditional medical environment, you really have to think about putting the medical device development first, rather than the wellness device. Because you can take a medical device and sell it into the consumer marketplace. But to take a consumer product and submit it for regulatory clearance is a much bigger hurdle to get over.

04:32 | KM: That’s a really important differentiation in knowing which direction that actually flows. A lot of people who build, let’s call it a wellness device or something, whether it’s electronic or non-electronic. And they may think, well, it’s much more costly to do all the regulatory approvals to get it to be certified as a medical device. 

04:52 | KM: So I’ll start in the wellness category. And the reality is, yes, it’s far cheaper. Far easier. As you said, it’s unregulated, so you can get your product to market, for the most part, depending on if there are certain safety considerations or whatnot.

05:04 | KM: But, assuming that you clear all that, you can get to market fairly easily. However, something that Bryon mentioned, which is really important, and we’ll dive into it a bit deeper here. In terms of the actual requirements for a medical device, it’s very difficult to take a product that’s already on the market and certify it as a medical device.

05:22 | KM: Bryon, can you explain why that is? And then we’ll get into how you actually certify your product as a medical device from the onset.

05:29 | BB: Yeah. I think the best place to start with that is to get a clear understanding of what’s required to make a submission for regulatory clearance. And first of all, everybody knows if it’s a medical device, it needs to pass safety and efficacy.

05:43 | BB: We’ve heard a lot about that with the FDA and the vaccines that are in the headlines these days. Is it safe? Does it work? But also, it’s important to understand that these regulatory agencies are looking at how you manufacture the device as well.

06:00 | BB: And so you can’t build a couple of these or four or five of your devices on the benchtop and go collect some data and say to the regulators, I would like to submit this for clearance. They’ll say, well, how did you manufacture it? And if you say, well, we put it together by hand, and we collected the data.

06:23 | BB: They will say, okay, well then we’re going to certify your hand built manufacturing process in an effort to get to know that unit five coming off the line and unit 500 coming off the line are the same. We need statistical significance that you’ve built that many of them.

06:41 | BB: And, all of a sudden, your whole process has gone down the tubes because there are so many variations in a hand built product that you may have to build 2000 of them and destroy them to demonstrate that they have uniformity.

06:57 | BB: And so building in the manufacturing process before you can ever sell it, you have to understand that as you go towards medical devices. But that should never be a showstopper, especially if the market is there for your medical device.

07:16 | KM: That’s a great point. I think that’s one of the big pillars that’s misunderstood about medical devices. As well as the design and the use of the product are important of course, and are necessary, but don’t forget about the manufacturing consistency. And that’s really in product design and engineering.

07:32 | KM: That’s a good process anyways. Whether it’s a medical or a wellness product, you generally want to have that consistency in your production. And you want to make sure that’s continuous, whether it’s the first or the five thousandth one off the line. And that’s just for user reviews and for brand continuity, and all the rest.

07:50 | KM: But it’s really important to think about this in medical devices because you have these different pillars, we’re talking about the manufacturing pillar. Can you speak to the efficacy pillar as well? And then we’ll talk about the development or safety, I guess, pillar too. Because all of these are important in order for you to actually get your certification.

08:11 | BB: Yeah, those are some great points and a great way to organize them. I think, from an efficacy standpoint, you have to ask, how well does it work? From a hardware standpoint, that’s really asking questions about engineering verification.

08:32 | BB: And with a medical device, the way you go through a verification process is you start with a specification. And you write every one of those specifications down. And then every spec is verified that it performs exactly the way that the specification is supposed to.

08:51 | BB: And each specific line item in your specification performs at a certain consistency from a statistical point, I hate to bring up statistics because they’re not a fun thing.

09:06 | BB: But, statistically, you have to test enough devices, enough of your engineering specs to be able to say, yes, this will perform consistently. So the efficacy piece of it, I think, is born out in the engineering design and the engineering testing and verification process. So…

09:29 | KM: This is a really important piece, as you said in your earlier comment that it is very difficult to medically certify a preexisting manufactured wellness device. It’s because this sort of testing or this pillar, when it comes to that engineering efficacy, is happening in the prototyping phase, in your actual development phase.

09:48 | KM: And this is where you’re actually getting those prototypes out there to the market, capturing real data in terms of how they’re performing on each of these specs, which you’ve written down prior. And then confirming those with the regulatory body. So that if the regulatory body agrees that as you’ve built a few of these and with a different audience or whatnot, that the specifications that you’ve set out originally are actually working.

10:10 | KM: And this is before you’re even going into production. Or it may be part of an early production run to do this testing. But, either way, it’s generally before you’re actually going to market. It’s almost always before you’re going to market.

10:20 | BB: That’s correct Kevin. I think that it’s kind of interesting. They talk about V&V, verification and validation. And in medical device speech, what it means by verification is, did you build the product correctly? And that means I’m taking each one of my specifications, and I’m testing it and making sure that it performs the way that the spec says it’s supposed to perform.

10:43 | BB: And then there’s validation, which means I’ve put it in the hands of users. And they say this is what I needed. And so that is answering the question, did I build the right product? And when you put your specification together for a medical device you have to articulate in writing what’s the intended use of the device.

11:07 | BB: And so if you intend for a device to do something, then you have to put it in the hands of a user and say, does it do this? And so you have to answer both the question, did I build the device correctly? And then you have to answer the question, did I build the correct device? And so both of those things are extremely important to a regulatory body that is certifying a product.

11:32 | KM: Now let’s talk about the third pillar, which is the safety pillar.

11:37 | BB: So that’s an interesting one, and it gets a little tricky depending on what your device is. And so there are a lot of safety considerations that you would give to any device, right? I mean, there are UL certifications. There are safety certifications that you expect from your vacuum cleaner.

12:01 | BB: And in the same way, if you have moving parts inside a box and there’s a hole on the outside of the box, you don’t want to be able to stick your finger in there and be injured. It’s the same way with a medical device, there are safety protocols that you have to go through, but there might be some different ones.

12:19 | BB: Like, let’s say that you have a device that is actually going to come in contact with the inside of the mouth or the inside of the nose. All of a sudden, I’ve got biocompatibility safety issues that I have to test. And so that adds just a different layer.

12:34 | BB:  It’s no more difficult than if you are making sure that somebody’s not going to cut their finger off if you’re making a fan. But at the same time, you just have to consider that, and you have to think about that all the way through the process. So there’s the safety element too.

12:51 | KM: What are some of the advantages of going the wellness route as opposed to going the medical device route, from your experience?

13:05 | BB: I go back to product-market fit. If you are essentially going to make the same device, and you have a consumer base that wants that device, then it can be a much larger population if you’re selling something directly to the consumer. And so the potential there is terrific.

13:32 | BB: Whereas, if it’s a medical device you’re trying to market it to the clinic, you may have a smaller population of users, who would be physicians. And it may be physicians in a particular specialty. There are cardiologists who want heart rate monitors. And so they’re going to use a medical device as a heart rate monitor. It has to have clearance.

13:59 | BB: But you also have another group of people who just want to track their heart rate on a daily basis. And that’s a much larger population. And if it’s essentially the same device, why not go after the wellness market? It’s much bigger and has much more potential for you.

14:13 | KM: Yeah. And it’s much easier to get into. But, of course, there are other considerations. Just jumping and flipping the script a moment here. Looking at the downside of that is when you do have a medical device, and it is certified, first of all, generally, it fetches is a higher margin.

14:28 | KM: It’s a higher price point because there’s obviously a much greater assumed development cost that goes into that. Which, of course, the downside is it’s almost always more expensive to be certified as a medical device than not certified as a wellness device.

14:41 | KM: But you also have to keep in mind that it’s a great potential market where you can hit a lot of people with one wholesale deal, as opposed to going after the individual consumer. So, one of the things that Bryon, you and I talked about on the call, one of your devices was able to sell to a couple of 1000 clinics, as opposed to having to go out and find 2000 users of your product. So, for your product-market fit, it made a lot more sense to go with the medical device route.

15:06 | BB: Yeah. And that oftentimes is the case with a medical device. You may have a piece of the device that comes in contact with the body and you want it to be disposable. And so we have a device that the company I’m working with now, it’s a two-part system. It’s a razor blade.

15:24 | BB: We have a disposable test and we have a piece of hardware that reads that test. The hardware is reusable. And so for every physician’s office that I put this device in there’s access to 2000 users, on average. And so I place one device and sell a subscription for 2000 users versus trying to sell the whole system to 2000 families who might use it, or 2000 individuals.

15:55 | KM: Yeah, that’s fantastic. Now let’s talk about the situation where let’s assume that somebody’s already in the market for a wellness device. Or they don’t have the funding let’s say to get it classified as a medical device upfront.

16:06 | KM: So they want to first start with the wellness device. I know you said you can’t go backward with the same device. But what are the techniques that somebody can use in that situation to think about maybe redesigning their product in a way that could classify as a medical device? And what tips do you have around that?

16:24 | BB: I think that’s a great question to sort of ponder. When you start developing a medical device one of the things that you have to consider is, where am I going to get the data to present to the regulatory body? 

16:42 | BB: And how many users are there? And does it meet the statistical requirement for confidence, et cetera? And so if you take a wellness device, and you’re able to retain the data from that device, then you have short-circuited the whole development process.

17:01 | BB: A huge chunk of medical devices is collecting data for your regulatory submission. And if you have that data based on, essentially the same design that you’ve used for a commercial product. And then you’ve turned around and said, I’ll complete the design process for a medical device and check all the boxes for my design controls.

17:27 | BB: And I can import the data now that I’ve collected it from my consumer device. You’ve really short-circuited that process. And it can really give you a jump on that submission.

17:37 | KM: Yeah. I think that’s important to note just so that people don’t feel like it’s one or the other forever. Although it’s certainly easier probably if you start directly as a medical device, because, as you said, you can always sell it in both places after that. It’s kind of like your ticket for both options.

17:52 | KM: But, on the other hand, if budgets are a consideration or you want some of that data, just keep in mind that although you’re bringing that data in, you will have to be redesigning the device and going through the proper medical design, manufacturing, safety requirements of the medical device.

18:06 | KM: But you’re doing that with that add benefit of having preexisting user data, which might help support your case, make it a little bit easier in terms of potentially the number of prototypes that you would have to test in the market. Maybe that’s reduced because you can use some of your prior data.

18:19 | KM: Again, none of this is a perfect science on this call. A lot of this is product specific, and especially depending on which regulations and which specific criteria fall around your specific medical device. But it’s important to know what your options are, at least theoretically here. So you can explore those further as it matches your business plan.

18:36 | BB: Yeah. I think another point that is important as we talk about this is that most startup founders are passionate about what it is they’re building. And they really want to build a quality product. And I have found that if you put the work in upfront and really understand how your product works and how well it performs, it’s going to make your life a lot easier once it’s in the marketplace.

19:03 | BB: And so when people start saying this one doesn’t work or there are problems and I have to now start trying to decide how I’m going to fix that. If you hire or work with really good engineers this is not as big a barrier as it seems. It is an understanding of the process and the paperwork that needs to be done.

19:30 | BB: But other than that, from an engineering standpoint, from a hardware development standpoint, it really can be almost identical. It’s not like you have to do these 16 other steps on the engineering process in order to get it done. If you have a passion for something, and you really want to do it well, you can fill all the medical device requirements without feeling like you’re getting bogged down in the swamp.

19:59 | KM: I really like that you brought that up because obviously one of the big things that we pitch is no matter what type of product you’re putting to market focus on quality. And one of the things that we say you can sacrifice is feature creep. Reduce the number of features to increase the quality of the features which you’re left with.

20:13 | KM: And, generally, as a new product, as a proprietary product, you only have one or two key major value adds that you’re bringing to the market in any case. So feature creep can just be very costly, but it can also make all these things much more difficult.

20:26 | KM: But to your point, if you’re focusing on quality from day one, all the medical device certifications are ensuring you’re doing a project in a quality fashion. So, if you’re already on that train of thinking, you’re already thinking we’re going to do this professionally. We’re going to do this, right.

20:42 | KM: We’re going to get this into the market’s hands and make sure the market loves it from day one. As opposed to putting something hack and working our way backward and probably just losing out. Then it’s not that big of a stretch.

20:52 | KM: And I love that you brought that up. Because it’s a huge agenda that we try and push to startups is if you are doing your MVP, and we call it smart MVP at Mako Design, make sure that doesn’t fall into the kind of the traditional tech theory of MVP. Which is to release crap and then do updates to fix it because that doesn’t work for hardware.

21:13 | KM: There is no update for a hardware device, well at least for the hard portions of it. So focus first on quality and if budget is a consideration, you’re much better off reducing the quantity of features and rolling them into a later model than you are on sacrificing quality.

21:29 | BB: I couldn’t agree with you more. As you know Kevin, I used to work in product development for a product development firm. And we used to have so many people who would come to us with a medical device that they wanted to be developed, and they wanted it to be a platform.

21:45 | BB: And so it was like, can you make it so that it does what we want to do, but also make it so that it does everything else that we want to do for the next five years? And I can’t tell you what that is. But please design it in such a way that it’ll expand.

22:01 | BB: And it’s like you’re going to do nothing well if you try and make it do everything from the get-go. And it was a response to if we have to do medical device development and it’s expensive, how can I save money? Maybe I can do the development for the next five iterations all at once, and I’m better off for it.

25:03 | KM: As always, I’ll put all the links in the show notes as well. Nic, thanks again for being on the show. Much appreciated.

22:23 | BB: It’s sort of like we used to say, pay me now or pay me later. Just do it right. And I think you’re absolutely right. Pairing down your spec to do what you need to do that meets the market needs is the best way to approach that situation.

22:41 | KM: Bryon, I really appreciate your time and all these tips on medical devices today. Thanks again. I’m looking forward to talking to you soon.

22:46 | BB: Certainly.

22:47 | KM: Take care.

22:48 | Voice-over: Thanks for tuning in to this episode of the Product Startup podcast. The show that teaches you what it really takes to bring your product to market and turn it into a big success. This podcast series is brought to you by MAKO Design + Invent, the original and leading firm in North America to provide global caliber end-to-end physical consumer product development to startups, inventors, and small product business clients. If you’re looking for product development help on your invention, head over to makodesign.com. That’s M-A-K-O design.com, for a free consultation from one of MAKO Design’s, four design studios from coast to coast. Thanks for listening and see you next time.