
As New York City was bracing itself for an influx of Covid-19 patients in early 2020, product development expert Marcel Botha was asked to lead a ventilator response in the city.
Botha and a team of 120 engineers, in partnership with the Massachusetts Institute of Technology (MIT), developed Spiro Wave within a month. The solution comprises a low-cost ventilator that circumvented most of the supply chain challenges that were manifesting in the early stages of the pandemic.
Fast forward nearly five years, and it seems lessons are still being learnt in the medical device industry. The US was hit hard by a saline bag shortage after Hurricane Helene damaged Baxter’s plant – the primary manufacturer of the devices.
Michelle Tarver, director of the FDA’s Center for Devices and Radiological Health (CDRH), said that the US may be at risk of falling behind in its ability to protect patients by assuring device availability. This month, new European Union (EU) regulations came into effect, requiring medical device manufacturers to flag any anticipated supply shortages to authorities at least six months in advance.
The FDA is planning to amend laws signed during the pandemic to remove the current temporal limitation that ties device shortage reporting requirements to public health emergencies.
Marcel Botha, CEO of product development and engineering company 10XBeta, talked to Medical Device Network about post-pandemic medical device shortages, regulatory changes, and how a new US administration may affect supply chains.
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By GlobalDataRobert Barrie (RB): Can you give an overview of what causes medical device shortages on a global level?
Marcel Botha (MB): At the national or international scale, through globalisation and manufacturing distributed globally, we have seen a hyper-concentration of where things are manufactured.
Regardless of whether it’s made in China, Southeast Asia, South America, the US or Europe, we see a hyper-concentration where one party is making all the world’s supply for one product. If that commercial entity is affected by an energy disruption, natural disaster, or political event, this causes massive ripple effects on the global supply chain. Distribution of supply chains and manufacturing is an important requirement for global access so that systems can absorb disruptions. Hyper-consolidation brings the cost down but adversely affects the resilience and speed of response efforts.
RB: What are the regulatory changes the FDA is looking to bring in and how does this compare to Europe?
MB: There’s an asymmetry between Europe and the US in terms of reporting requirements to flag early risks for medical device shortages. Most of the supply chain management tools today, whether a third party or incumbent in the process inside a large factory, can tell us the available sources of materials, both in and outside the current supply chain. It’s very quick to check, but without the required regulatory need to give a clear sense of ability to manufacture, people don’t look that far ahead.
People look only at what they have planned to manufacture in response to market commercial needs. Ebbs and flows of product needs, especially in response to adverse events or medical disasters, it is very hard for companies that are not agile to respond to those in real time because of the knock-on supply chain risks. The US has proposed to modify the Cares Act to make the existing pandemic reporting requirement for medical device availability a general requirement at all times of the year. I think that six months is a very limited window [in relation to the new EU regulations] because items might brush up against the current standard lead times for production. Investing in digital tools that can automate that reporting is one way to solve it.
We also need to distribute the manufacturing of those hard-to-manufacture, hard-to-source components. In terms of US manufacturing, it is important to understand how the landscape will change over the next generation for ten to 25 years, in terms of the reinvestment in US supply chains, and we can leverage that alongside these requirements to have a better insight on how to solve these future risks.
RB: Does the onus lie more with one party in supply chains?
MB: The onus is on everyone. It is policy, regulatory, incentive structures, and investing in local manufacturing. Through a commercial lens, it needs to make sense for us to invest in scaling up a medical device, in which a window of commercial demand may not be ahead of emergency demand. I do think supply chain risk is managed by looking at it as a public-private partnership between policy, regulatory and commercial sectors.
It is not just the manufacturers, but also how we access finance, how we factor inventory, how we deal with, everything from insurance to interest rates, to storage. On the other end of the spectrum – the redundancy. As we see innovation speeding up in the commercial and consumer sectors, we see also the redundancy of sensors and equipment increasing. Medical devices are shielded from that because of the regulatory requirement to refiling. However, you cannot keep years of inventory and think that it will remain current. It’s going to be an industry change that’s required. That starts at the policy and government level and then filters down.
RB: Do you envisage any changes to medical device supply under President Donald Trump’s new administration in the US?
MB: There’s a strong emphasis on reducing waste across all areas of government. The counter is also true – there’s a strong emphasis on increasing US resilience, manufacturing, and independence when it comes to supply chain innovation and technology. We’re seeing local innovation in manufacturing pipelines tightening. We’re seeing “superclusters” forming state-side in spare industrial spaces, former military and naval bases. These are changing to what is becoming high-tech and manufacturing spaces. I see this clustering driving a lot of the reshoring of localised manufacturing that is going to be a supercharged trend under the Trump administration.
This is highlighted by the policy shifts in tariffs for out-of-country manufacture and the tightening of regulations of manufacturing in the US. There’s a lot of bipartisan effort where the Democratic and Republican parties are thinking the same in terms of reshoring and re-education. This includes everything from STEM education in schools, bringing apprentice structures back, and retraining of existing labour. I think it’s an exciting time regardless of who is in power.
RB: What will the medical device manufacturing landscape look like in the next decade?
MB: We will see a shift in these risks that we’ve talked about today. A lot of manufacturing can be solved at a hyper-localised level, where we see decentralisation as a key metric. The FDA is giving opinions about the use of AI, and medical device development tools – things that could accelerate time to market. This is not just for novel devices, but also for upgrading or miniaturising older technologies.
We’re seeing massive opportunities for chemistry change, and improvements in industrial and medical processes. All this is going to be driven and supported by data and metrics of a real-time understanding of where the demands are.