Compared to new drug therapies, medical devices are costly to develop and often offer relatively poor returns. In health care systems skewed toward adults, ideas for pediatric medical devices can easily be left on the curb, but FDA-funded PDCs can help bring them into development.
Medical devices originating from industry or academia are the basis of a vast, global, for-profit industry. Much of the innovative thinking happens in hospitals and universities, which cannot make devices for practical or regulatory reasons, so these ideas need to migrate to mainstream industrial development. This may sound simple, but sadly it is not.
U.S. regulations require every new drug to undergo pediatric trials—or prove why trials are unnecessary—but the Food and Drug Administration (FDA) cannot force a sponsor in the medtech field to do pediatric trials. Nor can the European Medicines Agency and many other regulatory bodies around the world. Developing devices for children is a moral and a public health issue, but there is a distinct gap between costs and returns, which stifles innovation.
“The hurdle for medical devices is that the medtech business model is a small business model,” explains Juan Espinoza, MD, principal investigator (PI) of the consortium for technology and innovation in pediatrics (CTIP). “That is because scale develops slowly. There is a 2× or 3× return on investment, whereas drugs have a 10× return and exclusivity protections. You can register IP for a molecule, but you can engineer around any device protections.”
“In the drug market, you can have a unicorn billion-dollar company, but the cost of entry for medical devices is high—typically more than $100 million for a ten-year development process—and the outcome is very different for high-risk, implantable devices that maybe 800 children can use each year,” he adds. “There is no ethical price you can put on 800 units to recoup $100 million.” The high cost of entry creates what Espinoza describes as the “Valley of Death” model (see Figure 1). Public funding can kickstart a project, but costs rise dramatically in the manufacturing and commercialization phase. Here, a project can easily fall below the line of minimum funding needed to survive, which could mean it fails to launch and generate revenue.
Figure 1. The Valley of Death cost model for new pediatric medical devices (source: Lurie Children’s Hospital/Juan Espinoza, MD).
“There is a minimum amount of money that needs to be burned to develop the product and you have to hope you exist to get to the other side,” remarks Espinoza. “So you need to reduce the amount of time you are burning cash, raise the level of initial funding so that the valley doesn’t get too low, or make the returns so good that it is worth persevering.”
Typically, the cost of trials is somewhere between $54 million and $200 million. The Valley of Death can easily be a $30-million hole. The question is how to tweak incentives, regulations and subsidies to make the valley less deep.
Globally, so much depends on successful innovation projects in the U.S., which accounts for 40% of the medtech market and up to 70% of global research funding, according to the Advanced Medical Technology Association. One approach adopted by the FDA is the pediatric device consortia (PDC) grant program.
More than money
In 2023, there were five PDC grant recipients—CTIP, based in Chicago and Los Angeles; alliance for pediatric device innovation (APDI) in Washington DC; Southwest National Pediatric Device Consortium (SNPDC) in Houston, Texas; University of California San Francisco-Stanford Pediatric Device Consortium (UCSF); and the new midwest pediatric device consortium (MPDC), led by Nationwide Children’s Hospital and The Ohio State University.
These consortia act as medtech accelerators providing resources and expertise—not just financial support—including business and regulatory consulting, device testing capabilities, and skills in intellectual property, prototyping, engineering, laboratory and animal testing, grant-writing, and clinical trial design.
“Funding from government agencies helps bridge financial gaps that often hinder pediatric device development,” says Kolaleh Eskandanian (Figure 2), vice president and chief innovation officer at Children’s National Hospital, and PI of APDI, which was awarded a $7.5-million grant in 2023. “This support enables innovators to conduct essential research, develop prototypes, and perform clinical trials tailored specifically for pediatric populations.”
Figure 2. Kolaleh Eskandanian, Ph.D., M.B.A., P.M.P. vice president and chief innovation officer at Children’s National Hospital Executive Director, Sheikh Zayed Institute for Pediatric Surgical Innovation. (Photo courtesy of PDI/K. Eskandanian.)
“In addition, we provide invaluable expertise and guidance in regulatory pathways, reimbursement strategies, trial design, and evidence generation for regulatory submissions, ensuring devices meet stringent safety and efficacy standards before reaching young patients,” she adds.
CTIP was established in 2011 and has been funded since 2013. It helps sustain a needs-driven pipeline of new pediatric medical devices (PMDs) and develops successful models for commercialization. Over the last five years, it has helped 20 devices gain regulatory approval. Today, its active portfolio includes over 100 technologies.
Recently, it has supported Hemex Health in the development of Gazelle, an inexpensive and portable diagnostic device to test for sickle cell disease, beta thalassemia, and COVID-19 in remote and challenging settings. With CTIP’s help, Linear Health Sciences has created a tension-based separation valve, the Orchid SRV, to improve the safety and effectiveness of medical tubing, and Eclipse Regenesis is developing the Eclipse XL1 System which treats short bowel syndrome by stimulating the body to restore lost small intestine.
“We are focused on driving new innovation or adapting adult devices for children,” Espinoza explains. “All of our support is non-dilutive, so the grants we give are not paid back and we take no IP. And we help innovators to find partners. We are a small but effective part of the solution, and all five consortia make a meaningful contribution.”
Lowering the cost of device development helps everyone, but the financial support CTIP provides cannot exceed $50,000 per year per company. Fortunately, creating better networks to lower the $30-million average cost of the clinical trials stage can make a huge difference. Advice on regulations, procedures and partnerships can reduce the approval period for a new device, which also has a big cost impact. Every extra day burns money.
“If companies need to do larger clinical trials, we can hire a clinical and research team, or grant writers to apply for grants,” adds Espinoza. “There is a lot of waste in medtech because companies don’t think of regulatory strategy early. We can pay for a regulatory consultant to help a product get to market in a shorter timespan. We know the terrain a company has to navigate, so we help them generate a map.”
APDI also brings together individuals and institutions to support PMD progression from initial concept through prototyping, preclinical and clinical testing, manufacturing, and marketing to commercialization by providing expert advice, support services, and fund management input.
Between 2013 and 2023, APDI helped over 20 medical devices to receive FDA clearance or the CE Mark in Europe. Of all device companies it has assisted, eight landed a successful exit via acquisition. Its latest grant opportunity is for PMDs that improve the monitoring, diagnosis or treatment of youth suffering from substance use disorder and addiction.
“A new program, unique to APDI, is the Pediatric Technology and Device Translation Center (PTDTC),” says Eskandanian. “Although devices have transformed health care in the pediatric population, from advances in the care of prematurely born infants to new approaches for rehabilitation of chronically ill children, clinical trial platforms for the development of devices focused on pediatric health and disease are inadequate.”
“To close this gap, PTDTC addresses the dual challenges of ensuring that children have equitable access to device trials and providing safe environments to conduct those trials,” she adds.
Exploring Progress—ADPI Featured Projects
- mGene: Newborn screening for genetic conditions in the Democratic Republic of the Congo. mGene is the mobile technology developed at Children’s National Hospital to identify subtle changes in facial features. Tested on patients from over 30 countries and published in The Lancet Digital Health, the AI application helps screen children for advanced care when a geneticist may not be within reach. More information about the technology available at: https://www.thelancet.com/journals/landig/article/PIIS2589-7500(21)00137-0/fulltext.
- RHD: Portable ultrasound imaging to detect rheumatic heart disease (RHD). Photos from training in Uganda to use this AI technology developed at Children’s National Hospital that uses low-cost, portable ultrasound imaging to detect RHD in children and young adults. RHD takes nearly 400,000 lives annually in limited-resource countries. Early testing shows the AI platform has the same accuracy as a cardiologist in detecting RHD, paving the way for earlier treatment with life-saving antibiotics. More information about the technology available at: https://www.ahajournals.org/doi/10.1161/JAHA.123.031257.
- AlgometRx Nociometer1 enables a fundamental paradigm shift in pain assessment and analgesic prescribing. Our novel technology and algorithms analyze pupil dilation in response to neuroselective stimulation to formulate a nociceptive profile. This new construct is used to characterize pain type, intensity and assess the pharmacodynamic impact of analgesics. This transformative platform technology can be applied to any population.
- Snapshot Hyperspectral Camera: A sophisticated imaging device designed to capture spectral information across a wide range of wavelengths simultaneously for each pixel in an image. This technology is particularly valuable in medical applications, such as the detection and segmentation of pediatric brain tumors, due to its ability to provide detailed spectral data that can reveal biochemical and physiological properties of tissues. This technique can be integrated with surgical navigation systems to provide real-time guidance during tumor resection. More information: N. Kifle et al., “Pediatric brain tissue segmentation using a snapshot hyperspectral imaging (sHSI) camera and machine learning classifier,” Bioengineering, vol. 10, no. 10, 2023, Art. no. 1190. [Online]. Available: https://doi.org/10.3390/bioengineering10101190
- StethAid is a digital auscultation platform with AI-based clinical decision support. We have created a wireless digital stethoscope with a mobile application which allows streaming, recording, storing, sharing, and analysis—for the primary provider to use at the bedside in under a minute.
Leading the world
Across the Atlantic, Europe has many laudable programs for medtech and drug development. What is lacking, however, is the specificity that PDCs provide. Pediatric devices are not targeted in the same way in the European Union (EU) or the U.K., where much broader initiatives hold sway.
The fourth and largest of the EU health programs to be launched since 2003, the EU4Health program 2021–2027 is huge. With a budget of €5.3billion, it initially embodied a response to the COVID-19 pandemic, but now looks further ahead to address the resilience of European health care systems.
Crisis preparedness is the key driver, but the scope is broad. Health promotion and disease prevention, in particular cancer, as well as international health initiatives and cooperation are high priorities. Access to medical devices—and to health care in general—are high on the agenda.
“A key priority of a strong European Health Union is precisely to ensure that medical devices and diagnostics are available to patients, whenever they need them,” says a European Commission spokesperson contacted by IEEE Pulse. “Our key objective is to ensure safe, high-quality medical devices are always available for EU patients, and we also recognize that the only way to truly overcome major health threats is through a global response.”
The blanket coverage certainly encompasses pediatric devices, but they are given no specific budget. The same is true with the European Joint Program on Rare Diseases (EJP RD), though this has resulted in some innovations targeted at younger patients.
The organization facilitates and funds collaboration between industry, academia, SMEs, and patient organizations to solve specific research challenges, and one technology to emerge in 2022 was INDENEO from EVEON, which is a delivery system from the nose to the brain for the treatment of rare central nervous system diseases in neonates.
The Medicines and Health care products Regulatory Agency (MHRA), the principal regulator in the U.K., received £10million from the government in 2023 to fast-track patient access to cutting-edge medical products. The funding will help to accelerate routes to market through the development of a thorough but shortened approval process for innovative treatments such as cancer vaccines and AI-based therapeutics for mental ill-health, but there is no specific allocation for PMDs.
The US continues to home in on the development of pediatric devices in a way the rest of the world fails to. The latest effort is the Foundation for the National Institutes of Health’s public-private partnership for pediatric medical devices (PMD-PPP), which will address the lack of availability of PMDs. Combining the resources of national government agencies and private sector organizations, it aims to create a national ecosystem that supports PMD development.
There is no doubt that the development of PMDs is beset with challenges, and that PDCs can only do so much to alleviate them, but their specific focus on medical devices for children and the needs of younger patients still helps the US to set the tone for global innovation. In such a critical field, every little helps.