By Sougato Das, President and COO, Life Science Nation (LSN)
The FDA’s Center for Devices and Radiological Health (aka CDRH aka the folks who approve med devices) had firings a little more than a week ago, continuing from the layoffs at the NIH and CDC. Early signs indicate a reduction of 10% – 15%. Those who lost their jobs included those funded by medical device user fees and not tax-payer dollars. Since the cuts affected probationary employees the most, recent hires to evaluate newer technologies like AI-assisted imaging and digital health are gone, making it hard to imagine approvals for these modalities would not grind to a halt. AdvaMed’s head, Scott Whitaker, conveyed that AdvaMed had sent a letter to HHS in response, emphasizing the importance of AI and related technologies, the patient-facing effects throwing a wrench in the approval machine would have, and the lack of tax-payer savings. This may have been effective, as in breaking news today, the Associated Press reported that some of the fired individuals received calls and messages reversing their dismissals, stating terminations were “rescinded effective immediately.”
Besides staff cuts, there are other changes in FDA CDRH guidances, such as removal of requirements to have demographically diverse clinical trials. If the Trump administration continues to lower the regulatory hurdles required for approval, approval times could accelerate despite reduced staff, assuming further layoffs do not materialize and funds from user fees are made available again. Of course, this could result in products with less safety testing, which could lead to recalls and trust erosion.
The million-dollar (well, actually billion dollar) question is: how will these changes affect seed and series A-B funding for med tech, health tech and AI? Usually, regulatory uncertainty has a dampening effect on the investment climate. Companies may need to hedge their bets by doubling down on fundraising and partnering activity. How many meetings have you had in the last 3 months? How many leads do you have? How many meetings do you need to close your next fundraise? LSN can help you dramatically accelerate your business development. With the largest and most detailed life science investor/in-licensor database and the largest investment conferences (by number of attending investors) in the world, LSN is poised to help get you funded before any potential downturn. Reach us at: resi@lifesciencenation.com
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