What you need to know about FDA approval
Hey everyone,
While learning about the different FDA approval pathways might not be the most exciting thing you may do today, I think it’s critical to know if you want to be a great early-stage healthcare investor.
Class I: This is the lowest risk category and generally doesn’t require pre market approval or clinical trials. These poses minimal or no risk to patients. Approval for this can happen ask fast as a few months and $10,000 through a 510k pathway(explained further below).
Class II: These are moderate risk products which affect patient health but are not used in life threatening or critical conditions. Class II devices fall into 510k, de novo or pre market approval pathways.
Class III: These are high risk products and often involve life threatening and sustaining therapies. There are generally 2 pathways here, PMA and HDE(humanitarian device exemption). This always requires robust clinical trials.
510k pathway can be used for all classes and is used for products where a similar product(predicate) already exists in the market. The FDA charges between $4,000 to $12,000 for this pathway and generally it takes between 2-6 months. For a class II device, the median is 2.5 years and cost is $3 million. While clinical trials are not needed, they may ask for clinical data. They may also ask for post market surveillance.
De Novo pathway is used when there is no similar existing product. This may require clinical trials. It generally costs a few hundred thousand to a few million. The time varies but at minimum it would be 6 months up to 5 years. For a class II device the median time is 5.5 years and cost is $5 million.
PMA(pre market approval) is the stringest pathway, the cost runs into 10s of millions and it’s a lengthy/ arduous process. This pathway requires clinical trials. Generally this is used for class III devices.
Breakthrough Devices Program: The is intended to expedite the process for products which have the potential to improve treatment for life-threatening or irreversibly debilitating conditions. The FDA aim to make a decision within 45 days. Generally this would require clinical trials and cost a few million.
Humanitarian Device Exemption (HDE):The HDE pathway is used for products designed for rare diseases(less than 8,000 people per year). The timeline is about 12 months and costs vary depending on if a clinical trial is needed.
Thanks for reading,
Rishad
