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Jon Speer

Management

Paper Is Expensive

Three ways a paper-based quality management system can cost your company big time

Published: Monday, February 17, 2020 - 13:02

Believe it or not, paper is very expensive. Although the going rate for a ream of standard copy paper is only about 10 bucks, the expense of relying on paper for your medical device quality management system is downright outrageous.

Some medical device manufacturers have recognized how expensive paper really can be and therefore rely on spreadsheets and documents—so-called “digital paper,”—only to realize this variation of paper is just as expensive, if not more so, due to the false sense of security digital file systems can give.

If you’re still relying on these outdated systems, let’s consider three key ways paper ends up costing significantly more than $10 per ream.

Loss of company valuation

We had an eye-opening conversation with Ronny Bracken, executive and principal at Paladin Biomedical Consultants, an accomplished medical device research and development executive with a career spanning more than two decades. In addition to his role helping his clients in all manner of regulatory and engineering services, Bracken invests in early-stage medical device companies.

Bracken shared with us the story of a manufacturer to which his firm gave a $20 million valuation cut due to the lack of properly documented design controls in the general-purpose quality management system being used by the business. He highlighted poor design controls and risk management as significant sources of risk for an investor.

A strong valuation is vital for startups seeking funding; with millions of dollars in funding and company valuations at stake, make sure you aren’t saving money in the short term only to sacrifice it later on the back end.

Cost of stunted growth

On the topic of design controls, let’s talk about recent trends in medical devices. Increasingly, software as a medical device (SaMD) is becoming a key feature and differentiator for many device manufacturers. Apple and Google have both made significant bets with their wrist-based EKG devices.

Soon, medical devices with hardware, firmware, and SaMD elements will be table stakes for manufacturers. Paper simply isn’t capable of managing the design controls of the hundreds or thousands of components and subcomponents in these highly complex devices.

This means manufacturers will be forced to forgo these capabilities, and be eclipsed by the competition, or convert to a digital system later, likely when thousands of documents will need to be uploaded, connected, revised, and tracked. Both outcomes result in the potential that competitors will gain additional market share.

Fines and lost revenue after pulling a device from market

The code of federal regulations, 21 CFR 810, gives the U.S. Food and Drug Administration (FDA) the power to “issue a cease distribution and notification order requiring the person named in the order to immediately: cease distribution of the device; notify health professionals and device user facilities of the order; and instruct these professionals and device user facilities to cease use of the device.” That means that in a worst-case scenario, the FDA can order a device to be pulled from the market until corrective action has been taken, and the issue has been resolved.

In an industry where millions of dollars and years of work can be allocated to the development of a single device, time spent off the market is severely damaging to a business’s bottom line. During October 2019, GE Healthcare issued a Class I recall—the highest hazard classification—for nearly 23,000 devices. Although a $19 billion company may be able to survive such a recall, the same likely cannot be said for most medical device companies.

While we don’t know whether this recall was related to GE Healthcare’s quality management system or not, we do know that adequate risk management and a quality-first mindset were lacking—something best-of-breed software reinforces. With millions of dollars of sales, employees’ jobs and livelihoods, and a company’s reputation at stake, why take the unnecessary risk of using an outdated approach?

The adage “you get what you pay for” may be overused, but the sentiment has stuck around for a reason: Low-quality goods create low-quality outcomes. Fast food is cheap, filling, and tastes great in the moment, but basing one’s diet on fast food alone will lead to long-term health issues.

The same rings true to relying on paper for your quality management system. Yes, paper is quite inexpensive in terms of upfront costs, but with the high chance of noncompliance, fines, recalls, and a company valuation that reflects budget-minded choices rather than innovation-minded choices, why run the risk?

Discuss

About The Author

Jon Speer’s picture

Jon Speer

Jon Speer is the founder and vice president of quality assurance and regulatory affairs at Greenlight Guru, a software company that produces the only medical device quality management software solution. Device makers in more than 50 countries use Greenlight Guru to get safer products to market faster. Speer has served more than 20 years in the medical device industry having helped dozens of devices get to market. He is a thought leader and speaker, and regularly contributes to numerous industry publications. He is also the host of Global Medical Device Podcast.