Delays in obtaining CE marking for medical devices are draining the resources of European startups, forcing some companies to turn toward the US market.
Europe is currently facing major challenges in medical device certification, as companies wait for both existing and new products to be certified under the recently implemented Medical Device Regulation (MDR). Although the European Council extended certification deadlines to prevent existing devices from disappearing from the market, growing delays in certification are severely affecting startups that depend on CE marking to attract investors and launch innovative products.
“The slow medical device certification process in Europe has a major impact on innovative health technology and biotechnology startups trying to establish themselves quickly in a competitive market,” said Daniel Kvak, founder and CEO of Prague-based company Carebot, which develops AI systems that help surgeons analyse chest X-rays for signs of cancer.
There is also growing concern that the current situation places European startups at a disadvantage compared to international competitors. “Similar startups in Africa or Asia do not face such obstacles,” said Alexis Fourlis, founder and CEO of the Greek startup EMMA, which is developing a hospital triage support system.
Simpler certification processes abroad allow foreign companies to reach customers in their domestic markets faster and more easily than in Europe. “They have the opportunity to build their companies, and once they secure revenue and investment, it becomes easier for them to expand into Europe,” said A. Fourlis. “For us, as a European company, it is much harder.”
The Medical Device Regulation, which came into force in 2021, introduced new criteria for obtaining the CE mark required to place a medical device on the European market. Existing products must also be re-evaluated under stricter requirements to maintain their CE marking. Both types of applications are handled by independent organizations approved by the European Commission, known as Notified Bodies.
All Notified Bodies also had to undergo recertification themselves to prove compliance with the new requirements, which became a lengthy and demanding process. There are currently around 40 Notified Bodies across Europe, but it has become clear that they cannot meet the growing demand for certification and recertification. As a result, while the EU extended recertification deadlines, companies developing new devices continue to face increasing delays.
The cost of delays
For startups trying to enter the market, the delays often mean searching for additional funding to survive the uncertainty and long waiting times associated with obtaining CE marking. Investors willing to support companies before certification often provide only limited funding, while many others prefer to wait until certification is completed.
This is an even greater challenge for EMMA, which operates in Southeast Europe, where private investors tend to be more risk-averse. Founded in Greece in 2021, EMMA is part of the Aristotle University of Thessaloniki Medical School and was created in cooperation with Greek telemedicine company Vidavo. Its triage support system helps hospital emergency departments assess incoming patients and monitor them while they wait. The system combines software, artificial intelligence, and wearable health-monitoring technologies.
With limited opportunities in Greece, EMMA is establishing a base in Estonia through the country’s e-residency programme. Estonia offers a more dynamic startup ecosystem, stronger investment opportunities, and healthcare services suitable for further product development. “Since it is a small country, it will be easier for us to build a network and conduct our first pilot testing outside Greece,” said A. Fourlis.
Such pilot studies can be carried out with the approval of local ethics committees and help companies gather data before commercial launch. However, EMMA still requires CE marking to move toward paid contracts. “At the moment, this is our biggest obstacle,” said A. Fourlis. “The queues for audits by Notified Bodies are extremely long, and large companies with many products receive priority.”
Carebot is also strengthening cooperation with academia and has projects with Charles University and the Czech Academy of Sciences. “This collaboration acts as a form of validation and gives credibility to our solutions during the certification waiting period,” said D. Kvak.
At the same time, the company is reconsidering its business strategy. “Although Europe remains our main market, we are considering entering other markets first where certification processes are simpler,” he added.
America first
A similar decision was made by P3Lab. The company, founded in 2020 by former employees of Ion Beam Applications and the Brain and Spine Institute in Paris, develops a device using eye tracking for early diagnosis of neurological diseases such as Parkinson’s disease. After receiving a EUR 2.5 million grant from the European Innovation Council Accelerator programme in 2022, the company rebranded as NeuroClues.
NeuroClues has only recently started its CE marking process but plans to simultaneously apply for approval from the US Food and Drug Administration (FDA). “The FDA process is much more clearly defined and structured than the European process,” said co-founder and CEO Antoine Pouppez.
For example, Notified Bodies in Europe do not discuss a company’s clinical strategy before submission. “You need to prepare everything, submit it, and hope it matches expectations. This is extremely frustrating and risky,” said A. Pouppez. Once submitted, there is no commitment to review the application within a fixed timeframe. NeuroClues was told the process could take between 9 and 18 months. In contrast, the FDA offers pre-submission discussions and commits to delivering decisions within 90 days.
“On one side, there is a lot of uncertainty, and we do not know what feedback we will receive or when. On the other side, everything is very clear,” said A. Pouppez.
European medical device companies are increasingly turning to the US market first. “In this sector, I do not know a single startup that does not begin with the US,” he said. “In practice, innovation in Europe often goes through the US first.”
Other startups are searching for ways to avoid medical device regulation altogether or postpone it until a later stage of business development. One example is Stockholm-based company Leyr, founded in 2022, which developed a platform integrating different healthcare applications to securely standardize and exchange health data.
“The product we are bringing to market is not a medical device. However, we exchange information between medical devices, so we still need to ensure compliance,” said Helena Holma, one of Leyr’s founders.
Its first customers will be companies whose medical devices were certified under previous directives. Although those products will eventually require recertification, the extended deadlines make the situation less urgent.
This strategy allows Leyr to demonstrate market traction to investors while preparing for potential future certification as a full medical device. “It gives us time to plan product features and collect the data we will need for CE certification,” said H. Holma.
Calls for change
Startups struggling with the MDR framework are calling for a more transparent approval system and stronger support mechanisms.
“A transparent, standardized, and accelerated process would reduce uncertainty and shorten time-to-market,” said D. Kvak. “Clear guidelines and dedicated support for navigating regulatory processes would also be beneficial.” He also mentioned regulatory sandboxes for new health technologies as a possible solution.
A. Pouppez believes Notified Bodies should commit to clearer timelines and provide startups with feedback and final decisions within a defined timeframe. “Ideally, the whole process should take less than a year,” he said.
He also stressed the need to reduce differences between Notified Bodies. “Your time-to-market depends on which Notified Body you choose. Some can provide faster access but charge significantly more, which distorts the market,” he explained.
According to him, the European Commission should encourage Notified Bodies to dedicate more time to startups rather than prioritizing recertification of existing products. “It is easier for Notified Bodies to work with products they already know and companies they already have relationships with. Startups require more time because their products and business relationships are entirely new.”
H. Holma believes better education about regulations is also necessary. “Founders may have an idea for a health technology solution without even realizing it will be classified as a medical device,” she said. She also called for greater support through training and funding to help startups prepare.
NoBoCap initiative
The European Commission has already launched several initiatives to address these challenges, including the NoBoCap (Notified Body Increased Capacity) project funded under the EU4Health programme.
As the name suggests, the project aims to strengthen the capacity of Notified Bodies to work with medical technology innovation.
“Notified Bodies must be prepared to evaluate documentation for new technologies such as AI-powered devices,” said Roel Smolders, one of the project partners and HealthTech Lead at the Belgian cluster Medvia.
One focus area is training Notified Bodies on emerging technologies and their evaluation. Another is attracting more highly qualified professionals. At the same time, companies will receive training on how to select the most suitable Notified Body and prepare high-quality applications.
The project will also develop a compliance search portal where companies can identify which Notified Bodies have the required expertise and the shortest waiting times.
The project started in March 2023 and will run for three years. “The idea is to move very quickly,” said R. Smolders. “We are already preparing the first training courses, and additional programmes will be launched during the summer.”
Source: Ian Mundell, Science|Business, June 13, 2023.
