When a colleague and I started our medical device company in 2009, we were in our second year at Harvard Medical School. Some classmates joked that they would still be in residency by the time we had moved on to our next big idea. We knew better — we expected it to be a long haul. Eight years into our journey, thousands of individuals have used our product in countries where it has been approved. But we have yet to gain approval in the U.S. — a long and expensive process.
In 2016, the United States Food and Drug Administration approved 22 new drugs, down from 45 approvals in 2015. The decline in drug discovery has been attributed to a variety of factors that include ballooning research and development expenses (the cost to develop a new drug is now estimated to be more than $2.5 billion), high rates of failure (a whopping 90 percent of Phase 1 candidates never make it to launch), and the complexity of human biology, which can thwart even the most promising candidates.
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Medical devices have historically been viewed as having faster and lower-cost paths to market than their pharmacological counterparts: the average cost to develop high-risk, novel medical devices is estimated to be $94 million. After all, device engineers can leverage lower-cost animal models further into development than their pharmaceutical colleagues, the human clinical trials necessary for FDA approval are often smaller in scale, and, in some cases, expenses can be defrayed by revenue generated outside the United States in markets with faster regulatory pathways.
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