Regulatory Affairs Excellence: Staffing and Performance in Medical Device Companies

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Regulatory affairs group ensure that medical device companies comply with volatile regulatory environment pertaining to developing and marketing medical device products. These specialized groups rely on their own internal effectiveness and efficiencies for enhanced performance under stringent compliance norms. Also, optimal resourcing and staffing helps Regulatory Affairs groups in the medical device industry prioritize roles and responsibilities that will be most beneficial to growth.
Best Practices, LLC conducted this benchmarking study to establish meaningful metrics and insights around the structure, activities, roles and responsibilities of Regulatory Affairs groups at medical device companies. The study also provides recent spend and staffing trends of regulatory affairs in medical device sector, including the use of outsourcing and off-shoring.

Medical device regulatory leaders can use this study to align their staff as per strategies of best in class companies for an increased performance delivery.

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Regulatory Affairs Excellence: Staffing and Performance in Medical Device Companies

  1. 1. Regulatory Affairs Excellence:Staffing & Performance in Medical Device Companies Best Practices, LLC Strategic Benchmarking Research BEST PRACTICES, ® LLC
  2. 2. TABLE OF CONTENTSI. Executive Summary  Research Objective & Methodology  Key Findings  Participating Companies DemographicsII. Respondent Background  Respondent Demographics  Regulatory Affairs Reporting RelationshipIII. Regulatory Affairs Structure  Functional Structure  Corporate Regulatory Affairs FTEs  Span of ControlIV. Regulatory Function Activities  Active Regulatory Submissions  2010 Filings  Filing TrendsV. Regulatory Function Roles & Responsibilities  Leading & Supporting Roles  Corporate Regulatory Affairs Roles  Storage, Publishing & Translation SolutionsVI. Regulatory Function Investment and Staffing  2010 Spend & Staffing  Future Resource TrendsVII. Regulatory Function Outsourcing and Offshoring Trends  Regulatory Affairs Growth through Resource EfficienciesVIII. Impact of 510(k) Reform  Impact of Reform on Resources BEST PRACTICES, ® LLC
  3. 3. Research Background and MethodologyBest Practices, LLC conducted this benchmarking study to establish meaningfulbenchmarks for the resource levels and the activities scope of the Regulatory Affairsfunction for medical device companies. Background: With the monumental task of ensuring that companies comply with the plethora of global regulations and laws pertaining to developing and marketing medical device products, Regulatory Affairs groups must rely on their own internal effectiveness and efficiencies to remain productive. Optimal resourcing and staffing, including a balance of outsourcing and off-shoring, will help Regulatory Affairs in the Medical Technology industry prioritize roles and responsibilities that will be most beneficial to growth. Field Research & Insight Development: Objective:  Surveyed eight leaders at eight medical device To uncover resource and activity INFORM companies. benchmarks as well as forward-  Conducted three deep-dive executive interviews to looking insights about the collect qualitative insights from selected survey Regulatory Affairs function at participants. medical device companies. Deep Dive Interview Questions: 1. What process improvement initiatives are you working on in the Regulatory Affairs function? 2. In what areas do lean processes already exist? 3. Which structure best supports Regulatory Affairs activities? 4. How do you approach outsourcing and off-shoring of Regulatory Affairs activities? 5. How do you expect Regulatory Affairs resources to change in response to reform? BEST PRACTICES, 3 ® Copyright © Best Practices, LLC LLC
  4. 4. Universe of Learning: Eight Companies EngagedResearch participants included eight executives from eight medical device companies.Three executives participated in deep-dive interviews. The key findings and insights arebased on qualitative and quantitative data from their knowledge and experiences. Participating Companies: Bausch & Lomb; Becton Dickinson; Boston Scientific; Edwards Lifesciences; Ethicon; Medtronic; Roche Diagnostics; Zimmer BEST PRACTICES, 4 ® Copyright © Best Practices, LLC LLC
  5. 5. Key Findings & Insights – 1/3The following key findings and insights emerged from the data. Medical Device Revenue: The average medical device revenue is $7B for the benchmarkMedical Device Revenue: The average medical device revenue is $7B for the benchmark class. Half of the medical device revenue comes from U.S. sales.class. Half of the medical device revenue comes from U.S. sales. Regulatory Affairs Reporting Relationship: For 38% of companies, the Regulatory AffairsRegulatory Affairs Reporting Relationship: For 38% of companies, the Regulatory Affairs function reports to C-level management, or the highest level of senior management. For morefunction reports to C-level management, or the highest level of senior management. For morethan one-third of companies, the Regulatory Affairs function reports into aacombined Quality than one-third of companies, the Regulatory Affairs function reports into combined Quality and Regulatory Affairs executive.and Regulatory Affairs executive. Functional Structure: Most Regulatory Affairs functions are business unit centric with RAFunctional Structure: Most Regulatory Affairs functions are business unit centric with RAemployees reporting directly to the business unit they support. A hybrid approach - -one that employees reporting directly to the business unit they support. A hybrid approach one thatcentralizes planning, information, and coordination, but not staff - -may help increase centralizes planning, information, and coordination, but not staff may help increase efficiency.efficiency. Corporate Regulatory Affairs Groups: Corporate Regulatory Affairs groups average sevenCorporate Regulatory Affairs Groups: Corporate Regulatory Affairs groups average seven FTEs. The groups primarily promote standards, monitor the worldwide regulatory environment,FTEs. The groups primarily promote standards, monitor the worldwide regulatory environment, coordinate internal and external policy advocacy efforts, and advise business unit Regulatorycoordinate internal and external policy advocacy efforts, and advise business unit Regulatory Affairs staff.Affairs staff. BEST PRACTICES, 5 ® Copyright © Best Practices, LLC LLC
  6. 6. Medical Device Revenue Ranges from $1B to $16BMedical device and technology companies of all sizes face regulatory changes and mustadapt resources to meet demand. Medical device revenue in the benchmark class averagesapproximately $7B. Q2. Please estimate your companys 2010 annual revenue from medical device sales and related services. (Provide all cost figures in U.S. dollars. Use data from most recently completed fiscal year.) Estimated Medical Device Revenue ($USD): Max $16,000,000,000 75th Percentile $9,100,000,000 Mean $6,995,875,000 Median $5,950,000,000 25th Percentile $3,565,000,000 Min $1,447,000,000(n = 8) BEST PRACTICES, 6 ® Copyright © Best Practices, LLC LLC
  7. 7. Most RA Groups Support Corporate HeadquartersGiven the importance of Regulatory Affairs to the overall success of a medical devicecompany, most Regulatory Affairs executives in the benchmark class support efforts atcorporate headquarters. Only 25% primarily support a specific business or operating unit,which can be attributed to the existing corporate structures at those companies. Q9. Which entity do you primarily support? (Choose one.) A specific business/ operating unit, 25% The corporate headquarters,(n = 8) 75% BEST PRACTICES, 7 ® Copyright © Best Practices, LLC LLC
  8. 8. Most Regulatory Affairs Structures Are BU-CentricNearly two-thirds of companies employ a business-unit-centric Regulatory Affairsstructure where RA employees report directly to the business unit or manufacturing sitethey support, but also have informal reporting relationships ("dashed line reporting") to aseparate Regulatory hierarchy that ultimately reports to a senior Regulatory Affairs leader. Q12. How is Regulatory Affairs structured in your company? (Choose one.) Distributed Other, 13% Regulatory- centric Function: RA is a separate function Business-unit- closely aligned Centric with or Regulatory distributed into Function: RA BUs and/or employees sites, 25% report directly to the BU or manufacturing site they support, 63% Other: •In transition from business centric(n = 8) to distributed RA centric BEST PRACTICES, 8 ® Copyright © Best Practices, LLC LLC
  9. 9. Most File Regulatory Submissions in >50 CountriesIn addition to U.S., EU, Japan and Canada, benchmarked companies file regulatorysubmissions in 56 other countries on average. A seamless global IT solution for documentstorage is critical to avoid reinventing the wheel for every submission.Q18. Outside the US, EU, Japan and Canada, in how many additional countries does your company file regulatory submissions for medical devices? Number of Additional Countries where Filing Regulatory Submissions: Max 100 75th Percentile 60 Mean 56 Median 56 25th Percentile 45 Min 24(n = 7) BEST PRACTICES, 9 ® Copyright © Best Practices, LLC LLC
  10. 10. As with EU, Canadian Submissions are Less Taxing on RAResourcesCanadian licensing costs are much lower per submission than for the U.S. or Japan,although cost per submission is slightly higher than for the EU. Q17. Approximately how much is your Regulatory spend and how many Regulatory FTEs and Consultants do you have per each of the following active regulatory submissions? Global RA Spend/ Global RA FTEs/ Global RA Consultants/ Active Submission Active Submission Active Submission Canadian Canadian Canadian Canadian Canadian Canadian licenses - licenses - licenses - licenses - licenses - Class III licenses - Class II Class III & Class II Class III & Class II & IV devices: devices: IV devices: devices: IV devices: devices: Max $1,800,000 $340,000 17.50 2.70 2.00 0.50 75th Percentile $249,251 $229,091 1.67 1.73 0.21 0.15 Mean $411,342 $162,966 3.58 1.20 0.37 0.12 Median $213,333 $163,102 1.49 0.93 0.06 0.02 25th Percentile $170,383 $84,457 1.10 0.57 0.04 0.02 Min $26,793 $10,563 0.55 0.18 0.00 0.00 (n = 7 7 7 7 7 7) BEST PRACTICES, 10 ® Copyright © Best Practices, LLC LLC
  11. 11. PMAs and IDEs Received Consultant FocusPMAs (see previous slide) and IDEs had the highest Regulatory Consultant FTE levels.Submission Consultant FTE levels are total RA Consultant FTEs divided by total number ofsubmissions for each category.Approximately how many Consultant FTEs were involved in each of the following submissions in 2010? Canadian Canadian Investiga- Japan Japan Shonin licenses - licenses - tional Device Design Technical Todokede (approval Class III & applications): Class II Exemptions dossiers: files: (notifications): Class IV devices: (IDEs): devices: Max 2.00 5.00 0.40 4.00 4.00 2.00 2.00 75th Percentile 0.82 0.42 0.19 0.16 1.54 1.50 0.53 Mean 0.57 1.01 0.15 0.73 1.13 0.86 0.51 Median 0.15 0.23 0.12 0.10 0.40 0.40 0.27 25th Percentile 0.10 0.14 0.02 0.04 0.22 0.30 0.11 Min 0.00 0.00 0.00 0.00 0.00 0.00 0.00 (n = 6 6 5 6 7 7 7) BEST PRACTICES, 11 ® Copyright © Best Practices, LLC LLC
  12. 12. RA Leads Submissions, Labeling, FDA Correspondence, andRegistrationsAt all organizations, regulatory takes a lead role for filing submissions. Meanwhile, 75percent of companies have regulatory leading interactions with the FDA on officialcorrespondence and listings/registrations. Q22. For the following responsibilities, does the Regulatory Affairs function lead, support, or play no role? (Choose one role per responsibility.) No Role Supporting Role Leading Role Regulatory submissions to gain and/or 100% market authorization Labeling/publishing 25% 75% FDA Official Correspondent 13% 13% 75% FDA Listings and Registration 13% 13% 75% Field corrective actions: notification to 13% 50% 38% regulatory agencies; and follow up reporting Responses to Notified Body Observations 75% 25% Responses to FDA warning letters 88% 13% Responses to FDA 483 observations 88% 13% Audit support (FDA, Notified Bodies, all other 100% agencies)(n = 8) Complaint handling and MDR reporting 38% 63% BEST PRACTICES, 12 ® Copyright © Best Practices, LLC LLC
  13. 13. About Best Practices, LLCBest Practices, LLC is a research and consulting firm that conductswork based on the simple yet profound principle that organizationscan chart a course to superior economic performance by studyingthe best business practices, operating tactics and winning strategies of world-class companies. Best Practices, LLC 6350 Quadrangle Drive, Suite 200, Chapel Hill, NC 27517 919-403-0251 bestpractices@best-in-class.com www.best-in-class.com BEST PRACTICES, ® LLC

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