The global consumer electronics industry now exceeds $1 trillion in annual sales and continues to grow rapidly. Through its adoption of microprocessors and software, the industry has moved well beyond its roots in broadcast radio and television entertainment to offer intelligent devices that have begun converging with more traditional telecommunications and information technology products, and has started moving into new industry sectors such as healthcare. Increasingly, consumers owning powerful smart phones, tablet computers, and Internet-enabled televisions are eager to leverage their use for purposes beyond mere entertainment and personal communication. The boundary between technologies associated with work- and entertainment-oriented personal consumer electronic devices is rapidly being swept away through utilization of mobile multi-functional devices that offer personal and professional tools along with access to Internet resources.
While blending of personal and work technologies, commonly referred to as “the consumerization of IT,” is occurring at a rapid pace, another trend is now impacting the industry is “the consumerization of healthcare.” Consumers not only wish to use their own personal devices for work, but are becoming increasingly comfortable using them to access financial and healthcare-related services. Large global consumer electronics companies have begun acquiring established medical technology manufacturers, repurposing high-performance gaming systems as platforms for remote care, and building smart phones that provide built-in connectivity options for vital-signs monitoring and diagnostic devices that can wirelessly connect to mobile phones, game systems, or intelligent televisions.
The business model of the consumer electronics industry has long been one of relentless price and feature competition driving a need for a continuous stream of new products to market as quickly as possible, and at the highest shipment volume possible, as prices trend downward almost daily. While margins are under constant pressure, not only from price pressures, but also from continually increasing costs in research, development, and manufacturing.
Many of today’s largest advanced medical technology manufacturers can trace their early roots to consumer electronics products. Medical technology companies with such a consumer electronics lineage include well known firms like General Electric and Philips, and more companies are following this same path toward healthcare. All these companies hope to use regulated medical technology to capture higher margins and increased return on assets and invested capital: strict regulatory requirements, which do have increased costs and time to market associated with them, also provide a barrier to competitors’ market entry that serves to preserve margins and can allow companies to obtain a higher return on investment in research and development.
Operating in regulated environment is, of course, not without risk to consumer electronics companies, and many companies newly entering the medical technology space from mass-market consumer electronics are not prepared to deal with the challenges that emerge for their business because of medical device law and regulations. Product design controls, stringent requirements for verification and validation that products work as designed, quality systems controls, and post-market support and problem reporting requirements all represent unfamiliar territory for consumer electronics manufacturers.
The Highly Regulated World of Medical Technology: a Big Challenge for Consumer Electronics Firms Click to expand +
- Mapping regulatory compliance strategy to business strategy
- Evaluating potential partners regulated as medical device manufacturers for compliance
- Assessing regulatory compliance as mergers and acquisitions due diligence and for strategic impact on a company’s non-regulated operations
- Assessing roles and responsibilities for companies that serve as suppliers to regulated medical device manufacturers
- Assessing intended use claims for IT companies who desire to avoid direct FDA regulation: understanding the boundaries between unregulated and regulated products, and developing strategies on how not to cross them
- Educational training on FDA regulation requirements that apply to medical technology
- Developing product commercialization strategies and requirements
- Preparing regulatory product approval and clearance submissions
- Preparing for meetings with regulatory agencies
- Remediating compliance issues