Product Startup Podcast Episode 104: Medical Device vs Wellness Product

00:00:00 Kevin Mako: Hello, product innovators. Today we learn from a PhD and serial product entrepreneur on developing and launching a medical or wellness hardware product.

00:00:10 Narrator: You're listening to the Product Startup Podcast, the show that helps bring your product idea to life by chatting with successful inventors,

00:00:19 Narrator: product developers, manufacturers, and hardware industry professionals. Our goal here is to get to the bottom of what makes a product successful, from initial

00:00:27 Narrator: idea to getting your product on store shelves. We're taking you step by step. to build a functional product and scale your product business.

00:00:37 Narrator: Hosted by Kevin Mako, one of North America's leading experts on hardware development for small product businesses.

00:00:44 Narrator: Now, on to the show.

00:00:46 Kevin Mako: Welcome back, everyone. Today, I'm very excited to introduce Bryon Bhagwandin to the show.

00:00:50 Kevin Mako: Brian is a 20-year medical device entrepreneur with over a half-dozen products in the market. He has won a number of awards, including the top 100 in R&D magazine.

00:00:58 Kevin Mako: He also has a PhD from the University of Washington in medical devices. and hardware. Today, Brian is going to share some valuable knowledge for hardware startups,

00:01:06 Kevin Mako: inventors, and small manufacturers on the difference between a medical device and a wellness

00:01:09 Kevin Mako: device. And if going the medical device route, what are the steps and best practices to get certified? Now on to the episode.

00:01:17 Kevin Mako: Hey, Brian, welcome to the show. Thanks for having me. I appreciate it. Happy to have you on.

00:01:20 Bryon Bhagwandin: How is life in Denver right now? Today, it just started to flurry. So getting ready

00:01:26 Kevin Mako: for the snow, but it's good. Good stuff. Well, look, I'm excited to talk today about medical

00:01:30 Kevin Mako: devices and looking at the difference between wellness devices, medical devices, and the pros and cons between both.

00:01:35 Kevin Mako: But first and foremost, you've got an incredible history, half a dozen products developed in the medical space, your PhD as well. Just give us a quick background of

00:01:44 Bryon Bhagwandin: how you started in all this. Yeah, so I have two degrees in physics and grew up in the Midwest of the United States.

00:01:51 Bryon Bhagwandin: And I got hired by a drug company, Eli Lilly, and found myself feeling a little fish out of the water, decided to try and combine the physiology background, drug

00:02:00 Bryon Bhagwandin: development background with my engineering and physics. And so I went to pursue my PhD in biomedical engineering and applied that to medical devices.

00:02:10 Bryon Bhagwandin: And that's been, that's been what I've done for the last two decades

00:02:14 Kevin Mako: now has developed medical devices. Amazing. So let's talk about the difference to start. What is the difference between a certified medical device and essentially

00:02:23 Bryon Bhagwandin: a wellness or a health device. That's a great question, Kevin.

00:02:27 Bryon Bhagwandin: There are a number of devices in the marketplace that we think of as wellness. There's a big surge these days towards wellness.

00:02:37 Bryon Bhagwandin: A lot of people want to track their heart rate. I want to track their blood pressure. A lot of over-the-counter products that you

00:02:45 Bryon Bhagwandin: can pick up, even stress monitors that are out there. Those are all wellness devices.

00:02:51 Bryon Bhagwandin: They are not cleared by any kind of regulatory agency the FDA or the medical device directive in in

00:02:59 Bryon Bhagwandin: Europe and as a consequence they they really can't be used to make decisions about your medical

00:03:07 Bryon Bhagwandin: health or and i think that's probably the biggest difference is that that that clearance is given

00:03:14 Kevin Mako: so that you could sell into the clinic and decisions can be made about how to treat your health

00:03:20 Kevin Mako: Yeah, I think that's really important when you're, especially if you're developing health,

00:03:24 Kevin Mako: wellness product, medical device or whatnot, to really think about your business going forward

00:03:28 Kevin Mako: and where you want to sell that because there's quite a big difference between the accessibility

00:03:34 Kevin Mako: you have and selling something that is certified as a medical device and where that can be sold

00:03:38 Bryon Bhagwandin: as opposed to a health and wellness device, which is just generally over the counter selling to the end consumer.

00:03:45 Bryon Bhagwandin: Right. And I think it's important to know whether, where you, want to take your product. What is the product market fit?

00:03:54 Bryon Bhagwandin: And sometimes, sometimes you may say both. You may say, I'd like to have a wellness product and I would like to have a medical

00:04:01 Bryon Bhagwandin: device. And if that's the case, and you think there are channels outside of the traditional

00:04:08 Bryon Bhagwandin: medical environment, you really have to think about putting the medical device development

00:04:14 Bryon Bhagwandin: first rather than the wellness device because you can take a medical device and sell it into the consumer marketplace.

00:04:24 Kevin Mako: But to take a consumer product and submit it for regulatory clearance is a much bigger hurdle to get over.

00:04:32 Kevin Mako: That's a really important differentiation in knowing which direction that actually flows.

00:04:37 Kevin Mako: A lot of people that build, let's call it a wellness device or something, whether it's

00:04:42 Kevin Mako: electronic or non-electronic, and they may think, well, it's much more costly to do all the regulatory approvals to get it to be certified as a medical device.

00:04:51 Kevin Mako: So I'll start in the wellness category. And the reality is, yes, it's far cheaper, far easier. Like you said, it's unregulated.

00:04:59 Kevin Mako: So you can get your product to market for the most part, depending on, you know, if there's certain safety considerations or whatnot.

00:05:04 Kevin Mako: But assuming that you clear all that, you can get to market fairly easily. However, something that Brian mentioned, which is really important, and we'll dive into

00:05:11 Kevin Mako: a bit deeper here in terms of the actual requirements for medical advice, is that it's very difficult to take a product that's already on the market, take that exact same product,

00:05:20 Kevin Mako: and now certify it as a medical device.

00:05:22 Bryon Bhagwandin: Brian, can you explain why that is? And then we'll get into how you actually certify your product as a medical device from the onset.

00:05:29 Bryon Bhagwandin: I think the best place to start with that is to get a clear understanding of what's required to make a submission for regulatory clearance.

00:05:37 Bryon Bhagwandin: And first of all, everybody knows if it's a medical device, it needs to pass safety and efficacy.

00:05:43 Bryon Bhagwandin: We've heard a lot about that with the FDA and the vaccines that are in the headlines these days. Is it safe? Does it work?

00:05:50 Bryon Bhagwandin: But also, it's important to understand that these regulatory agencies are looking at how you manufacture the device as well.

00:05:59 Bryon Bhagwandin: And so you can't build a couple of these.

00:06:04 Bryon Bhagwandin: four or five of your devices on the on the bench top and go collect some data and say to the to the

00:06:10 Bryon Bhagwandin: regulators i would like to submit this for for clearance they'll say well how did you manufacture

00:06:18 Bryon Bhagwandin: and if if you say well we put it together by hand and we collected the data they will say okay

00:06:24 Bryon Bhagwandin: well then we're going to certify your hand-built manufacturing process in an effort to get to know that

00:06:32 Bryon Bhagwandin: that Unit 5 coming off the line and Unit 500 coming off the line are the same, we need statistical significance that you've built that many of them.

00:06:41 Bryon Bhagwandin: And all of a sudden, your whole process is gone down the tubes because there's so much variation in a hand-built product that you may have to build 2

00:06:50 Bryon Bhagwandin: ,000 of them and destroy them to demonstrate that they have the uniformity.

00:06:57 Bryon Bhagwandin: And so building in the manufacturing process before you can ever sell it,

00:07:02 Kevin Mako: is you have to understand that as you go towards medical devices. But that should never be a showstopper,

00:07:11 Kevin Mako: especially if the market is there for your medical device.

00:07:15 Kevin Mako: That's a great point. I think that's one of the big pillars that's misunderstood about medical devices as well, is the design and the use of the product are important,

00:07:25 Kevin Mako: of course, and are necessary, but don't forget about the manufacturing consistency. And that's really in product design and engineering, that's a good process anyways.

00:07:35 Kevin Mako: Whether it's a medical or a wellness product, you generally want to have that consistency in your production, and you want to make sure that that's continuous,

00:07:42 Kevin Mako: whether it's the first or the 5,000 one off the line. And that's just for user reviews and for brand continuity and all the rest. But it's really important to think about this

00:07:51 Kevin Mako: in medical devices because you have these different pillars.

00:07:55 Bryon Bhagwandin: And that's we're talking about the manufacturing pillar. Can you speak to the FXC pillar as well?

00:08:00 Bryon Bhagwandin: and then we'll talk about the development or safety, I guess, pillar, too, because all of these are important in order for you to actually get your certification.

00:08:11 Bryon Bhagwandin: Yeah, that's some great points and a great way to organize it.

00:08:16 Bryon Bhagwandin: I think from an efficacy standpoint, you have to ask, you know, how well does it work?

00:08:24 Bryon Bhagwandin: And that's from a hardware standpoint, that's really asking questions about engineering verification.

00:08:32 Bryon Bhagwandin: And with a medical device, the way you go through a verification process with a medical device is you start with a specification and you write

00:08:41 Bryon Bhagwandin: every one of those specifications down and then every spec is verified that it performs exactly the way that the specification is

00:08:50 Bryon Bhagwandin: supposed to. And each specific line item in your specification performs at a certain concern.

00:08:58 Bryon Bhagwandin: A certain consistency from a statistical. I hate to bring up statistics because they're not a fun thing,

00:09:07 Kevin Mako: but statistically you have to test enough devices, enough of your engineering specs to be able to say, yes, this will perform consistently over and over and over again.

00:09:17 Kevin Mako: So the efficacy piece of it, I think, is born out in the engineering design and in the engineering testing and

00:09:27 Kevin Mako: verification process. So this is a really important piece because to your earlier comment that is very difficult

00:09:33 Kevin Mako: to medically certify a preexisting manufactured wellness device, it's because this sort of testing

00:09:41 Kevin Mako: or this pillar when it comes to that engineering efficacy is happening in the prototyping phase in your actual development phase.

00:09:48 Kevin Mako: And this is where you're actually getting those prototypes out there to the market, capturing real

00:09:53 Kevin Mako: data in terms of how they're performing on each of these specs, which you've written down. prior and then confirming those with the regulatory body so that the

00:10:01 Bryon Bhagwandin: regulatory body agrees that as you've built a few of these and with, you know, different audience or whatnot, that the

00:10:06 Bryon Bhagwandin: specifications that you've set out originally are actually working. And this is before you're

00:10:11 Bryon Bhagwandin: even going into production or it may be part of, you know, an early production run to do this

00:10:15 Bryon Bhagwandin: testing. But either way, it's generally before you're actually going to market. It's almost always before you're going to market. That's correct, Kevin.

00:10:21 Bryon Bhagwandin: And I think that it's, it's kind of interesting. they talk about V&V, verification and validation.

00:10:28 Bryon Bhagwandin: And in medical device speak, what that means is verification is, did you build the product correctly?

00:10:36 Bryon Bhagwandin: And that means I'm taking each one of my specifications and I'm testing it and making sure that it performs the way that the specs says it's supposed to perform.

00:10:43 Bryon Bhagwandin: And then there's validation, which means I've put it in the hands of users and they say, this is what I needed.

00:10:50 Bryon Bhagwandin: And so that is answering the question, did I build the right process? product. And when you put your specification together for a

00:10:59 Bryon Bhagwandin: medical device, you have to articulate in writing, what's the intended use of the device?

00:11:07 Bryon Bhagwandin: And so if you intend for a device to do something, then you have to put it in the hands of the user and say, does it do this? And so you have to

00:11:16 Bryon Bhagwandin: answer both the question, did I build it properly? Did I build the device correctly? And then you have to answer the question, did I build the correct device?

00:11:25 Bryon Bhagwandin: And so both of those things are extremely important to a regulatory body that is certifying a product. Now, let's talk about the third pillar, which is the safety pillar.

00:11:37 Bryon Bhagwandin: So that's an interesting one, and it gets a little tricky depending on what

00:11:46 Bryon Bhagwandin: your device is. And so there are a lot of safety considerations that you would give to just any device, right?

00:11:54 Bryon Bhagwandin: I mean, there are UL certifications. There are safety certifications that you expect from your vacuum clear.

00:12:01 Bryon Bhagwandin: And in the same way, you know, if you have moving parts inside of a box and there's a hole in the outside of the box, you don't want to be able to

00:12:09 Bryon Bhagwandin: stick your finger in there and be injured. In the same way, with a medical device, there are

00:12:15 Bryon Bhagwandin: safety protocols that you have to go through, but there might be some different ones. Like, let's say

00:12:20 Kevin Mako: that you have a device that is actually going to come in contact with the inside of the mouth and the inside of the nose.

00:12:27 Kevin Mako: All of a sudden, I've got biocompatibility safety issues that I have

00:12:30 Bryon Bhagwandin: to test. And so that adds just a different layer. It's no more difficult than if you, you know,

00:12:38 Bryon Bhagwandin: are making sure that somebody's not going to cut their finger off if you're making a fan.

00:12:43 Bryon Bhagwandin: But at the same time, you just have to consider that and you have to think about that all the way through the process. So there's there's the safety element too.

00:12:51 Bryon Bhagwandin: What are some of the advantages of going the wellness route as opposed to going the medical device route from your experience?

00:13:01 Bryon Bhagwandin: Well, I think that, you know, I go back to product market fit.

00:13:08 Bryon Bhagwandin: If you're essentially going to make the exact same device and you have a consumer base

00:13:18 Bryon Bhagwandin: that wants that device, then it's a huge, you know, it can be a much larger population if you're

00:13:27 Bryon Bhagwandin: selling something directly to the consumer. And so the potential there is terrific. Whereas if it's a

00:13:33 Bryon Bhagwandin: medical device and you're trying to market into the clinic, you may have a smaller population

00:13:38 Kevin Mako: of users, which would be physicians, and it may be physicians in a particular specialty. So, you know,

00:13:45 Kevin Mako: there are physicians that, cardiologists who want, they want heart rate monitors.

00:13:51 Kevin Mako: And so they're going to use a medical, a medical device as a heart rate monitor. It has to have clearance.

00:13:59 Kevin Mako: But you also have another group of people who just want to track their heart rate on a daily basis.

00:14:04 Kevin Mako: And that's a much larger population. And if it's essentially the same device, why not go after the wellness market? It's much bigger and has much more potential for you.

00:14:13 Kevin Mako: Yeah, and it's much easier to get into. But of course, there's other considerations just jumping and flipping the scripted moment here,

00:14:20 Kevin Mako: looking at the, you know, the downside of that is when you do have a medical device and it is certified, first of all, generally it fetches a higher margin.

00:14:28 Bryon Bhagwandin: It's a higher price point because there's obviously a much greater assumed development cost that goes into that, which is, of course, the downside.

00:14:34 Bryon Bhagwandin: It's almost always more expensive to be certified as a medical device than not certified as a wellness device.

00:14:40 Bryon Bhagwandin: But you also have to keep in mind that it's a great potential market where you can hit a lot of people with one wholesale deal as opposed to

00:14:49 Bryon Bhagwandin: going after the individual consumer. So one of the things that Brian, you and I talked about on the call, one of your devices,

00:14:55 Bryon Bhagwandin: you were able to sell to a couple thousand clinics as opposed to having to go out and find 2,000 users of your product.

00:15:02 Bryon Bhagwandin: So for your product market fit, it made a lot more sense to go to the medical device.

00:15:06 Bryon Bhagwandin: Yeah, and that oftentimes is the case with a medical device. I mean, you may have a piece of the device that comes in contact with the body.

00:15:14 Kevin Mako: and you want it to be a disposable.

00:15:17 Kevin Mako: And so we have a device that, you know, the company I'm working with now is a, it's a two-part system. It's a razor, razor blade. We have a disposable test,

00:15:25 Kevin Mako: and we have a piece of hardware that reads that test. The hardware is reusable.

00:15:31 Kevin Mako: And so for every physician's office that I put this device in, there are, there's access to a thousand, two thousand users on average.

00:15:40 Kevin Mako: And so I place one device.

00:15:44 Bryon Bhagwandin: and sell a subscription for 2,000 users versus trying to sell the whole system to 2,000 families

00:15:51 Bryon Bhagwandin: that might use it or 2,000 individuals.

00:15:55 Bryon Bhagwandin: Yeah, that's fantastic. Now, let's talk about the situation where let's assume that somebody's already in the market

00:16:00 Bryon Bhagwandin: for wellness device or they don't have the funding, let's say, to get it classified as a medical device up front. So they want to first start with the wellness device.

00:16:08 Bryon Bhagwandin: I know you said you can't go backwards with the same device, but what is kind of the techniques that somebody that can use that's in that situation to think about maybe

00:16:18 Bryon Bhagwandin: redesigning their product in a way that could classify as a medical device and what tips do you have around that I think that I think that's a great question to

00:16:28 Bryon Bhagwandin: sort of ponder because one of the things that is required when you start developing a medical device one of the things that you have to consider is where

00:16:36 Bryon Bhagwandin: am I going to get the data to present to the regulatory body and it and how

00:16:43 Bryon Bhagwandin: many users are there and does it meet the statistical requirement for confidence, et cetera, et cetera. And so if you take a wellness device and you're

00:16:52 Kevin Mako: able to retain the data from that device, then you have short-circuited the whole development process that a huge chunk of medical

00:17:02 Kevin Mako: devices is collecting data for your regulatory submission. And if you've got that data

00:17:08 Kevin Mako: based on essentially the same design that you've used for a commercial product.

00:17:15 Kevin Mako: And then you've turned around and said, I'll complete the design process for a medical device

00:17:23 Kevin Mako: and check all the boxes for my design controls. And I can import the data now that I've collected from my consumer device.

00:17:31 Kevin Mako: You've really short-circuited that process and can really give you a jump on that submission.

00:17:37 Kevin Mako: Yeah, I think that's important to note just so that people don't feel like it's one or the other forever, although it's certainly easier probably if you start directly as a

00:17:45 Kevin Mako: medical device, because like you said, you can always sell it in both places after that.

00:17:48 Bryon Bhagwandin: It's kind of like your ticket for both options.

00:17:52 Bryon Bhagwandin: But on the other hand, if budgets are a consideration or you want some of that data, just keep in mind

00:17:56 Bryon Bhagwandin: that although you're bringing that data in, you will have to be redesigning the device and going through the proper medical design, manufacturing, safety

00:18:05 Bryon Bhagwandin: requirements of the medical device. But you're doing that with that added benefit of having preexisting user data, which might help support

00:18:11 Bryon Bhagwandin: your case, make it a little bit easier in terms of potentially the amount of prototypes that you would have to test in the market.

00:18:16 Bryon Bhagwandin: Maybe that's reduced because you can use some of your prior data. Again, none of this is a perfect science on this call. A lot of this is product specific

00:18:23 Bryon Bhagwandin: and especially depending on which regulations and which specific criteria fall around your specific medical device.

00:18:29 Bryon Bhagwandin: But it's important to know what your options are, at least just theoretically here so you can explore those further as it matches your business plan. Yeah, I think, I

00:18:37 Bryon Bhagwandin: think another point that is important as we talk about this is most startup founders are passionate

00:18:45 Bryon Bhagwandin: about what it is they're building and they really want to build a quality product.

00:18:50 Bryon Bhagwandin: And I have found that if you put the work in up front and really understand how your product works and how well it

00:18:58 Bryon Bhagwandin: performs, it's going to make your life a lot easier once it's in the marketplace. And so when

00:19:04 Bryon Bhagwandin: when people start saying this one doesn't work or there's problems and I've got to,

00:19:08 Kevin Mako: you know, I've got to now start trying to decide how I'm going to fix that. If you follow the medical device, I mean, if you hire or work

00:19:17 Kevin Mako: with really good engineers,

00:19:20 Kevin Mako: this is not as big as a barrier as it seems. It is an understanding of the process and the paperwork that needs to be done.

00:19:31 Kevin Mako: But other than that, from an engineering standpoint, from a hardware development standpoint, standpoint, it really can be almost identical.

00:19:39 Kevin Mako: It's not like you have to do these 16 other steps on the engineering process in order to get it done.

00:19:45 Kevin Mako: If you have a passion about something and you really want to do it well, you can fill all

00:19:51 Kevin Mako: the medical device requirements without feeling like I'm getting bogged down in the swamp.

00:19:58 Kevin Mako: I really like that you brought that up because it's one of the big things that we pitch is no matter what type of product you're putting to market, focus on quality.

00:20:06 Kevin Mako: And one of the things that we say you can sacrifice is feature creep.

00:20:10 Kevin Mako: Reduce the amount of features to increase the quality of the features which you're left with.

00:20:13 Kevin Mako: And generally, as a new product, as a proprietary product, you only have one or two key major value ads that you're bringing to the market in any case.

00:20:21 Kevin Mako: So feature creep can just be very costly, but it can also make all these things much more difficult. But to your point, if you're focusing on quality from day one, really

00:20:30 Kevin Mako: all the medical

00:20:31 Bryon Bhagwandin: device certifications are, are ensuring you're doing a project in a quality fashion. So if you're

00:20:37 Bryon Bhagwandin: already on that train of thinking, you're already thinking, you know, we're going to do this

00:20:40 Bryon Bhagwandin: professionally, we're going to do this right, we're going to get this into the market hands and

00:20:43 Bryon Bhagwandin: make sure the market loves it from day one, as opposed to putting something hack and working our

00:20:47 Bryon Bhagwandin: way backwards and probably just losing out, then it's not that big of a stretch. And I love that you brought that up because it's a huge, huge agenda that

00:20:57 Bryon Bhagwandin: we try and push to startups is if you are doing your MVP, and we call it Smart MVP at Mako Design, make sure that that doesn't

00:21:05 Bryon Bhagwandin: fall into kind of the traditional tech theory of MVP, which is release crap and then do updates to fix it, because that doesn't work in hardware.

00:21:13 Bryon Bhagwandin: There is no update for a hardware advice, well, at least for the hard portions of it. So focus first on quality. And if budgets of

00:21:20 Bryon Bhagwandin: consideration, you're much better off reducing the quantity of features and rolling them into a later model than you are on sacrifice and quality.

00:21:28 Bryon Bhagwandin: I couldn't agree with you more. You know, as you know, Kevin, I used to work in in product development for a product

00:21:35 Bryon Bhagwandin: development firm and we used to have so many people who would come to us with a medical

00:21:40 Kevin Mako: device that they wanted to develop and they would, they wanted it to be a platform.

00:21:46 Kevin Mako: And so it was like, can you make it so that it does what we want to do, but also make it so that it does everything else that we want to do for the next five years.

00:21:56 Kevin Mako: And I can't tell you what that is, but please design it in such a way that it'll expand.

00:22:01 Bryon Bhagwandin: And it's like you're going to do nothing well if you try and make it do everything from the get-go.

00:22:09 Bryon Bhagwandin: And it was a response to if we have to do medical device development and it's expensive, how can I save money?

00:22:17 Bryon Bhagwandin: maybe I can do the development for the next five iterations all at once and I, you know, and I'm better off for it.

00:22:23 Bryon Bhagwandin: It's sort of like, you know, we used to say pay me now or pay me later.

00:22:28 Bryon Bhagwandin: Just do it right. And I think you're absolutely right. Paring down your spec to do what you know

00:22:35 Bryon Bhagwandin: you need to do that meets the market needs is the best way to approach that situation. Bryon, really appreciate your time and all these tips of medical devices today.

00:22:44 Bryon Bhagwandin: Thanks again. Looking forward to talking to you soon. Take care.

00:22:48 Narrator: Thanks for tuning in to this episode of the Product Startup Podcast,

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