IVD Technology Magazine | IVDT Article Index
Originally published July 1996
Commentary
Time is more valuable than money
Alfred W. Schweikert
We learned at an early age that the first-place finisher gets the gold medal. In the IVD industry, the winners are those that are first to market. These competitors are rewarded not only with profits but also with increased chances of long-term survival. Miles Laboratories with its dipstick technology, Ortho Diagnostics with its HCV ELISA technology, and Perkin-Elmer with its PCR technology are a few examples of companies that have achieved market dominance by being first.
The time required to develop a new product affects its profitability more than do its initial costs. A McKinsey study reports that, on average, companies lose 33% of after-tax profits when they ship products six months late, compared with 3.5% when they overspend 50% on product development.
Many companies try to streamline the new product introduction process by improving their business organizations. Toward this end, they often establish cross-functional development teams and specific company guidelines on departmental interrelationships. Collaboration and communication are effective ways to improve the development process, but only if the product or project has been chosen carefully. A company may spend a lot of time developing the perfect organization and never launch a new product in time to capture the market.
Even the best-run company can improve its product introduction time by choosing a new technology or product carefully. Indeed, this is the most important factor in becoming the first to market.
The industry in recent years has had to weigh the appeal of new technologies against the inevitability of regulatory roadblocks. Assay formats with no historical precedent require more than the average product development time, for both in-house quality assurance and regulatory licensure. Assays that are similar to previously marketed products, however, have limited market potential if they offer no advantage over those existing products. In the blood glucose monitoring field, assay formats were predictable for many years. Newcomers in the marketplace could expect a 1 to 2% market share and a predictable lackluster product lifespan. Johnson & Johnson's introduction of LifeScan One Touch Glucose Monitor and Test Strips changed the rules and found high customer acceptance. The product development process unifying reagents and handheld instrumentation required longer-than-average product development time but in the long term is increasing the company's market share and market stability.
Having a clear mission is one key to timely product launch. The mission should be matched to a specific need of the intended customer. "Mission creep"--brought on by new marketing data, management redirection, or attractive technological advances--can bog down new product development. The development team must stay focused on the goal while still being able to react to the dynamic product development en-vironment. Project leaders may find themselves in the role of "coaching" when strategies must change to meet the desired goal.
After choosing the product or technology, the investigation or feasibility stage comes next. Within a predetermined time, the company should decide whether to commit to developing the product. During this phase, the company should outline the product's desirable features, demonstrate its feasibility, and estimate its cost and price. Marketing and R&D should collaborate to determine what features the customers want and how to include them in the product. New product ideas may be generated at any level within or even outside an organization, but the allocation of funds should be approved by the highest levels of management. Formal presentations and documentation by the designated product development groups are recommended. The technology should be understood and agreed upon before any money is allocated. Early allocations for research feasibilities are usually made after idea generation and before a formal contract or proposal.
The development phase begins only after a thorough investigation of feasibility. The developed product must be made correctly the first time to ensure a timely introduction and long life cycle. At this point, the technology transfer and manufacturing personnel carry the ball. The development phase should include all the stages of research and development including scale-up and product stability and clinical studies. The main focus should be to determine how to make the product at the desired price. Strategic project staffing at this time is critical. Management must provide adequate staff to meet deadlines and keep development costs down.
Processes and test methods that become carved in stone at this stage must be easily scaled up for manufacturing and must be accepted by FDA. Reengineering of licensed products is not cost-effective in the 1990s IVD market. Any process changes made to an existing product require that the manufacturer reevaluate validated standard operating procedures, specifications, stabilities, or clinical studies. In "Changes to Be Reported for Product and Establishment License Applications," published on April 6, 1995, in the Federal Register (60 FR:1753517538), FDA provides guidance to manufacturers who are attempting to correct problems or address process changes with minimal expense and without unnecessary waste. Although this document has sorted process changes into distinct categories requiring different levels of compliance, the marketplace and the time factor control the actuality of manufacturing process changes. As technology has advanced and new antigens have been discovered, for example, infectious disease ELISA manufacturers have found it easier to license new versions of their assays rather than try to improve their earlier formats.
The manufacturing phase is the last step where new product introduction can proceed quickly or become snarled. Successful manufacturing is the result of training and collaboration between technical personnel and manufacturing personnel.
New technologies may be moved into the market faster if the pro-cesses used to make the reagents or the instrumentation are tried and true. Technology transfer professionals must determine not only the best technical processes and test methods to use in manufacturing a product but also whether FDA has previously cleared products made with those processes. Raw materials, chromatography resins, viral clearance techniques, and cleaning procedures are a few examples of reagents and processes regarding which novelty should be avoided if possible. All FDA-licensed intravenous antibodies marketed today are purified by ion-exchange chromatography. There are other techniques for purifying antibodies, but they require extra time and money. Unless a company really wishes to be a biotech pioneer, it should follow accepted practice.
At this stage, validation of the manufacturing process should occur. A successful validation should be a sure thing, since so much of the investigational work was performed at the development phase. First-place finishers in the marketplace know that validation is not experimentation, and they are confident of success by the time the product reaches manufacturing.
Long-term survival of an IVD company depends on its ability to beat competitors to market with new products. Improved profits, prestige, legal position, and regulatory acceptance are the prizes awarded to the winner in the IVD marketplace.
Alfred W. Schweikert, PhD, is a member of IVD Technology's editorial advisory board and manager of process development at Ortho Diagnostics Systems, Inc., in Raritan, NJ.
