From Idea to Market: Ep 6 - The Valley Between Idea and Approval

What actually happens between building a medical device and getting it approved? In this episode of From Idea to Market, we walk through the regulatory valley that separates a working prototype from a cleared product — and why so many promising innovations stall right here.

This is the stage where progress stops being about what you can build and starts being about what you can prove. Joe Schwab breaks down the FDA's device classification system, the critical difference between 510(k) and PMA pathways, and why the gap between regulatory clearance and reimbursement has become one of the defining challenges in modern med tech. You'll hear from founders and industry veterans — including Jared Foran, Peter Noymer, Doug Fairbanks, Marie-Isabelle Batthyány, Robert Cohen, and Simon Mifsud — who share hard-won lessons about navigating this process with limited capital and no margin for error.

Whether you're a surgeon with a device idea, an engineer entering the med tech space, or an investor trying to understand what makes regulatory risk so difficult to price, this episode maps the valley in concrete terms — and explains why the teams that survive it tend to build better products because of it.

⏱️ Chapters:
00:00 Introduction to the regulatory valley
02:21 Meet the founders and industry veterans
04:36 Why promising devices stall before FDA review
05:23 FDA device classification for hip arthroplasty
09:10 Designing to regulatory standards from day one
10:26 FDA clearance without reimbursement
14:07 How design controls sharpen device claims
16:32 FDA designations that accelerate development
19:56 Costs and risks founders underestimate
23:31 Three lessons from the regulatory valley

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This podcast is intended for educational and informational purposes only.

The content discussed does not constitute medical advice and should not be used as a substitute for professional judgment. Clinicians should rely on their own training, experience, and clinical decision-making when applying information from this discussion.

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Transcript

Joseph M. Schwab 0:22

Hello and welcome to the AHF Podcast. I'm your host, Joe Schwab. From Idea to Market is a series about how medical innovation actually happens, not as a straight line, but as a sequence of high stakes decisions that only some ideas survive. If you're just joining us, I highly recommend going back to the beginning of this series. We've covered the spark where a clinical frustration becomes an obligation. We've shaped that idea and tested it in a proof of concept. We've built the company structure and in our last episode, we secured the capital necessary to move that structure forward. But here, this is where everything changes. Every stage we've covered so far has been shaped by people, by founders making choices, or engineers solving problems or investors writing checks. This stage is different because now progress is shaped by a system, a formal, legally structured system that doesn't respond to enthusiasm or urgency. It responds to only one thing. Evidence. This is where the work stops being persuasive and starts being provable. And the hard truth is that many promising ideas don't make it through here. Not because the science is wrong, but because the evidence burden is larger than the company can absorb. But for ideas that do survive, regulation becomes more than a gate, it becomes a moat. You're going to hear from people who have navigated this valley from the inside, founders who spent years building evidence under tight resources and veterans who've watched promising innovations stall right at the gate. Rather than introducing them one by one, I want you to hear them first in their own words.

Jared Foran 2:40

I'm Jared Foran. I'm an orthopedic surgeon in Denver, Colorado. I'm a hip and knee arthroplasty specialist. I'm the Chief Scientific Officer of Forcast Orthopedics, and I'm one of the co-founders.

Peter Noymer 2:53

Hi, my name is Peter Noymer. I'm the CEO of ForCast Orthopedics. I'm also a PhD in mechanical engineering. I've spent nearly 30 years, developing novel drug delivery systems for improving treatments across a number of different therapeutic areas.

Doug Fairbanks 3:07

My name is Doug Fairbanks. I'm the president, CEO, and board member at VISIE Inc.

Marie-Isabelle Batthyány 3:11

My name is Marie-Isabelle Batthyány I'm an board certified anesthesiologist specializing in orthopedic anesthesia and I'm also the founder and CEO of XRSynergies.

Robert Cohen 3:24

My name is Robert Cohen and I am a mechanical engineer that have worked in the med tech industry for over four decades, and I presently am the Vice President of innovation and technology for the Orthopedic Group at Stryker.

Simon Mifsud 3:38

Hello, my name is Simon Mifsud and I'm a co-founder and the CEO of Garland Surgical Limited based in the UK. And we're developing a novel hip replacement system called the Malta Hip.

Joseph M. Schwab 3:50

Together, their stories help us understand what this valley actually looks like when you're standing inside it and what it takes to reach the other side. To navigate this stage, we reviewed our conversations looking for specific answers to three questions. First, why do promising ideas stall before they even reach the regulatory gate? Second, how do the demands of regulation reshape and sometimes genuinely improve the original vision? And third. What kinds of risk do even experienced founders consistently underestimate? This is the valley between idea and approval. Up to this point in the series, progress has been shaped by effort in ingenuity and capital. But at this stage, something fundamental shifts progress is no longer just about what you can build. It's about what you can prove under rules that are written in advance and enforced usually by a federal agency. And the first thing that system does is classify your idea. So let's start with question one. Why do promising ideas stall before they even reach the gate? In the United States, the FDA classifies every medical device into one of three risk categories. And for anyone in the world of hip arthroplasty, these distinctions matter. A great deal. So class one is low risk in the or. You interact with Class one devices every single day without thinking about it. Non-powered hand instruments like retractors and bone levers, examination gloves, may be non-sterile protective equipment. Most are exempt from formal pre-market review. Class two is moderate risk, and this is where a significant amount of the innovation in anterior hip surgery has lived so far. Intraoperative imaging, software powered positioning systems, navigation devices, and standard hip implants with a clear predicate. All typically fall here. The five 10 K asks one central question, is your device substantially equivalent to something already legally on the market? And if the answer is yes, the FDA's average review time runs around 160 days, roughly five to six months, though the full process, including all the development work required before filing, often takes considerably longer. Class three is where the stakes change entirely. And here's something that surprises a lot of people in the orthopedic space. Standard hip implants, titanium femoral stems, your porous coated acetabular components, your polyethylene liners. Most of these are actually cleared as class two devices through the five 10 K pathway because manufacturers can point to a predicate device that was already on the market. It's when you introduce something genuinely novel, a new bearing surface, a new material combination, a new mechanism that has no real predicate that you risk crossing into class three territory. The metal on metal, total hip systems are the clearest example from our field. When the FDA determined in 2016 that those devices had insufficient evidence from the standard controls, they required full pre-market approval, and PMA is a different animal entirely. It doesn't ask whether your device is similar to something existing. It demands independent proof from clinical trials that the device is safe and effective. The average PMA takes several years and costs tens of millions of dollars, and as of today, no medal on metal, total hip replacement has ever received one. Here's where the stall begins. Many teams build first, then try to figure out regulation later. But in med tech, the build and the regulation strategy aren't really separate activities. The pathway determines the standards you design to the standards, shape what you test and the testing has to match the claim you made from the very beginning. When those things don't align, teams often discover the mismatch after spending years and significant capital and find themselves having to start over. The teams that move through this valley most efficiently are the ones that map their pathway first, then design to those standards from day one. Doug Fairbanks describes what that discipline actually looks like in practice.

Doug Fairbanks 9:10

So our, our regulatory guidelines have us pursuing a sub-component classification, which means that we have to design to certain engineering standards. Uh, ISO 13 4 85, uh, there's a safety, there's electrical safety 6 0 6 0 1. There's software 6 2 3 0 4. There's a bunch of these, essentially standards that we built to. But our regulatory Subcomponent classification says we designed to these engineering standards. We manufacture those standards, we turn over our device, and our device gets then embedded in a device that goes and goes through five 10 K or, or through regulatory clearance itself. So this is a well-worn path. The camera company that's doing it now for most, for most systems on the market. Got, has been, has been making these cameras for about 40 years and has a ton deployed to the field and, and it's kind of a known way of pursuing things and, and we, we intend fully to comply to those standards.

Joseph M. Schwab 10:02

That phrase a well-worn path. Carries real strategic weight. When your approach follows an established category with known standards and clear precedent, you're not inventing the process as you go. You're executing a plan that others have already validated. But not every innovation gets to walk that well-worn path. And this is where a second dimension of the stall enters the picture because the regulatory pathway. The reimbursement pathway are two entirely different systems. A device can receive FDA clearance and still sit unused because there's no billing code that allows hospitals to get paid for using it. Two different agencies, two different bodies of law, and two different timelines and the gap between them. Has become one of the defining challenges in modern med tech. Robert Cohen has spent his entire career at the intersection of clinical innovation and commercial strategy, and he describes how that gap now shapes which innovations even get pursued.

Robert Cohen 11:15

You're familiar with the, you're familiar with term, the Valley of Death and Innovation in Med Tech. Right. So that's happening to me to a lot. I see happening a lot of startups where you get the regulatory approval but you have no reimbursement of. So someone thought clinical benefit, but there's no reimbursement. So those challenges exist now in ways that we just never saw before. So people paying for something and then the regulatory process adds a complexity. And in fact, in many cases we may choose what product to do internally just because we know the regulatory path and time to market where there's too many unknowns in something, which may be a great project.

Joseph M. Schwab 11:55

And sometimes the calculus gets even starker than that. In the past, the primary hurdle was, can we build it Today, the question has shifted to can we afford to prove it? When the regulatory cost of a great idea outweighs its commercial window, even the most promising innovations can be left on the shelf. That isn't cynicism. That's the actual decision making framework inside of large med tech organizations right now. Regulatory burden has become a selection filter, not just for which innovations survive, but for which ones can even get started in the first place. So here's our first answer. Promising ideas stall before the gate. When the build and the regulatory strategy aren't aligned from the very beginning, when the evidence burden exceeds what the company can financially sustain and when clearance arrives without a reimbursement pathway waiting on the other side, understanding all three isn't optional. It's the minimum entry requirement for this valley. There is a version of regulatory strategy that treats the FDA purely as an obstacle, a wall to get over or a box to check. Teams that approach it that way tend to find the process deeply adversarial. But what the most experienced people in our conversations kept returning to is something a bit different. The regulatory process, as demanding as it is, has a way of making products better, whether we like it or not. Not by relaxing standards, but by forcing teams to be more and more precise and more honest about what they're actually claiming their device can do. That brings us to our second question. How do regulatory demands reshape the original vision? In medical device development, there's a framework called design controls. Before you build, you define your design input. What the device must do for whom and under what conditions. Then you generate design outputs, the actual specifications and drawings that reflect that intent. Then you verify the outputs, meet the inputs. You validate that the finished device actually performs as intended in real use. Every step is documented, every change is tracked. For a first time founder, this can feel like the most bureaucratic thing imaginable, but that documentation process does something beyond satisfying regulators. It forces clarity. It forces teams to write down. Exactly what they're claiming. And when you're forced to write it down, you often discover the claim is fuzzier than you thought. That the original vision was built on assumptions that were never actually tested. Well, design controls aren't just a compliance mechanism, they're a clarity mechanism. Simon Mifsud is developing a novel orthopedic implant and like most founding teams, nobody on his team had direct FDA experience rather than learning the regulatory system through trial and error, he made a decision early on to bring in outside expertise.

Simon Mifsud 15:45

we used a, a really, um, experienced company, uh, from the US called Bruta Consulting to help us get across that line. Uh,'cause we had, none of us internally had experience of dealing with the FDA and that was extremely helpful to have that level of support and expertise.

Joseph M. Schwab 16:02

That decision reflects one of the clearest patterns we see in teams that survive this stage. Regulatory strategy is a specialty. Treating it as one by bringing in people who have navigated these pathways before changes, not just the efficiency of the process. The quality of the decisions made along the way, and for some innovations, the regulatory system itself provides tools that can dramatically change the journey. Peter Noymer is developing a treatment for periprosthetic joint infection, a combination of a drug and a device, which puts him at the intersection of multiple regulatory frameworks at the same time. What he figured out early was that navigating that complexity wasn't just about compliance. It was about knowing which tools the system makes available and going after them before anything else. I.

Peter Noymer 16:59

there's special designations for the FDA, the orphan drug designation relates to, you know, uh, diseases or conditions with, uh, patient population under 200,000 in the US and PJI is less than half of that. And then QIDP, which stands for Qualified Infectious Disease product, is a special designation within the anti-infectives group for, um, things that, that, that serve a compelling unmet medical need. Um. So for me, I'd say, I mean, timeline perspective, I mean, early on, you know, when I joined that the, those were like the, the two things at the top of my list to get done, right? Just to get those in place. Um, but what they do for you is pretty, is pretty impressive, right? So during your development program, um, they provide sort of, I'll call it more rapid access to the FDA for meetings.

Joseph M. Schwab 17:47

Regulation doesn't just constrain. It can accelerate, but only if you understand how to work within it. Marie-Isabelle Batthyány trained as a physician before becoming a med tech entrepreneur, and her perspective on navigating regulation comes from a place that most engineers or business first founders simply don't have.

Marie-Isabelle Batthyány 18:09

Docs are great entrepreneurs. Why? Because we're used to taking risks and we are used to making fast decisions. We have great clinical insight from our everyday work, um, and it certainly influences how we approach the regulatory sector. We know how to, what to anticipate because we are subjects to regulatory, um, confinement to some extent.

Joseph M. Schwab 18:39

So here is the second answer. Regulatory demands reshape the original vision by forcing it toward precision. Broad claims become specific ones. Intuitions become testable requirements. The device that emerges from this process is almost always more coherent and more defensible than the one that entered it. The process doesn't just evaluate the innovation. In many cases, it improves it. By this stage, most founders understand intellectually that regulation is slow and expensive. They've heard the warnings, they've read the case studies, but what they often can't fully anticipate until they're actually inside the valley is where the real risk lives, because it's not always where they expect. It's not always in the review itself. It's in the accumulation of smaller pressures building in the background until they become impossible to ignore. And that brings us to the third question. What kinds of risk do even experienced founders most often underestimate? Let's start with the most visible risk, because even the visible ones are consistently underestimated. A first in class device pursuing PMA averages around$94 million to bring to market, at least according to data from the FDA's own cost analysis. And total development timelines can stretch. A decade, a five 10 K considered the faster route, still averages around$31 million. When you factor in all the development work required before the submission is even filed for early stage companies operating on seed or series A funding, those numbers create a specific kind of pressure. Every month in development is a month of burn. Every request from the FDA for additional data isn't just a technical challenge, it's a financial event. Jared Foran is developing a novel antibiotic delivery system, and when he describes the reality of evidence generation, what comes through is not frustration with the agency specifically. It's the weight of a process that simply can't be rushed.

Jared Foran 21:18

So we're still proving it. Uh, of course there's, uh, toxicology, uh, work that's being done. Uh, and there's, you know, uh, you know, local, local toxicity. Systemic toxicity, we have to, we have to, uh, prove that it's safe. Uh, and then for the, you know, endpoints for the, phase one, phase two studies, it's basically composite endpoints of infection, uh, eradication, uh, re-operation, and of course endpoints such as death. Uh, up to, uh, I believe 180 days is our, is our, uh, goal endpoint.

Joseph M. Schwab 21:50

Animal studies, biocompatibility testing, sterility validation, shelf life studies. Each of these is a separate project with its own timeline and its own potential for. Unexpected results and all of it has to be completed documented to FDA standards and included in the submission before the agency begins formal review. What Jared describes next is something almost every experience MedTech founder arrives at eventually, usually after years of living inside this process.

Jared Foran 22:25

I think systematically it's tough to ask surgeons to take personal risks off-label without some type of regulatory backing. So I think it is, is a necessary to go through the FDA. The FDA actually is a, a consumer, you know, watchdog group. They have the back of the, of the American public. And I think it's, it's something we just have to do and go through the process. It's is a perfect no. Is it important? Yes.

Joseph M. Schwab 22:53

That is the third answer. The risks most often underestimated at this stage are not the ones on the slide deck. They're the ones that compound beneath the surface, the expanding evidence burden, the shifting guidance, and the financial pressure of a process that moves on its own timeline. Sitting right alongside those risks are some underestimated advantages, credibility, market protection, and the kind of institutional trust that no amount of marketing spend can replicate. Looking back at these conversations, three things kept coming back. First, the regulatory pathway is not something you figure out after you build. It's an architecture that has to be embedded into the development process from day one. Teams that separate those two things often discover the gap between them at the worst possible moment. Second, the process reshapes the idea and that reshaping as uncomfortable as it might be, tends to produce something more precise and more defensible than the product that entered. The most experienced founders in our conversation don't describe regulation as a wall. They describe it as a filter that made their product better. And third, the valley. Has two sides. The costs are real and they compound, but so do the advantages. Clearance isn't just permission to sell. It's a signal of credibility and that signal opens doors. A company might not be able to open any other way. If you are holding onto an idea right now and wondering whether the regulatory path is worth it, here's what I hope you carry forward from this episode. The valley is long, but what you build inside, it isn't just evidence, it's trust, and in medicine, trust is maybe the only currency that actually matters. In our next episode, we follow. What happens after that gate finally clears Because here's something that surprises almost every founder who has made it this far. FDA clearance isn't the finish line. It's the beginning of a completely different kind of challenge because once you have a clear device, you still have to move it. Past procurement committees, previous habits, past skepticism, and into the hands of the very surgeons and patients, it was designed to help that journey from approved to adopted has its own valley. And its own friction and its own set of assumptions that don't survive first contact with the clinical system. So here's the question we'll carry into episode seven. When a device has been proven, safe and effective by every standard a regulator can require, why is that still not enough to guarantee it reaches the patients? It was designed to help.