Crowdfunding has become a household word among technology companies, and is now making its way to the forefront of the medical device industry. Sites like Kickstarter and Indiegogo are seeing a rise among would-be investors getting in on the ground floor of these ventures, with the promise of blockbuster returns. Certain sites are targeted specifically to the medical device developer community; examples such as Crowdacure aim exclusively on medical device development.
The reasons for this burgeoning activity are essentially the same as what one might find in technology: investor appetite for early-stage development is on the wane since so many of them would prefer to invest in ventures whose devices are closer to market release. This, coupled by the FDA’s perceived inability to move devices more rapidly through regulatory channels results in device manufacturers’ willingness to seek approval with offshore regulatory bodies (particularly the EU). What’s more, researchers and early-stage device manufacturers are trying to rein in costs so as to make their technologies affordable for everyone. Quite often, it’s the only way for companies to fund research and development for non-traditional diseases or conditions that aren’t a target for regular funding pathways, either because the population affected isn’t large enough or vocal enough.
The funding path from unorthodox sources like the ones described is, of course, fraught with risk. A multitude of eager investors may hedge their bets on therapies that will never see the light of day or receive FDA clearance, and there’s no specific language to date that addresses the legal implications of such a practice. Certainly the FDA is in no hurry to make a ruling on how products are financed, limiting its reach to issues that might pose a threat to public safety.
It’s easy to see the attraction for the medical device startups to go this route, and it could be a faster, more economical method for getting much needed therapies out to the public sooner and more affordably. What are your thoughts about this practice? Are you currently involved in or thinking about a crowdfunded approach to funding your medical device development?
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