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Over the weekend you received an email with an update on the Kleiner Labs surgical device that proposes to reduce pain and speed up recovery for back surgery patients. 

In that email, I used the phrase, “FDA Clearance” to describe the permission to proceed that Kleiner had.

Some have asked what’s the difference between FDA Clearance and FDA Approval. And since so many angel investors are investigating opportunities in medical technology and devices, the words are NOT interchangeable.  There is a very specific step-by-step process that inventors go through to get their product approved. This write up will detail the last steps to market.

Ways with Words

With the rush to get a workable Covid vaccine to market, using various words that imply approval (like “emergency use authorization”) increases the sense in skeptics that they’re being deceived. Words became politicized.

There are very distinct differences in the FDA’s use of the words “Clearance”, “Approval”, and a host of other words.  

Words create meanings. Words also create loopholes. Take the “Laboratory Developed Test” loophole that Theranos used to conceal a poorly or non-performing device to their investors and partners like Walgreens. Theranos did receive FDA approval for their machine to perform one test, but it was their use of the de novo exception that allowed the lack of a marketable product that did what it was reported and promoted to do for so long.  

Clearance

“You are cleared to proceed.” There’s a special submission called a 510K (Food, Drug and Cosmetic Act) a medical device manufacturer goes through to notify the FDA of their intent to market a medical device at least 90 days in advance. It’s also known as a premarket notification. Permission is not a stamp of approval though.  When doing due diligence on startups or investment opportunities in the medical space, where FDA has oversight, the FDA has information available to the public where you can screen for 510(k) listings and Premarket Approval (PMA).

Approval

Consumers rely on the Federal Drug Administration (FDA) to be independent, follow scientific methods to review medical products, including drugs and vaccines. And before something can be approved, the agency has to determine what the clinical data says about the drug, vaccine, or device being safe and effective for its intended use and that the benefits outweigh the risks that are demonstrated during clinical trials when used according to the product’s labeling.

Clinical trials are meant to discover/validate:

  • How the drug or device might be used for a specific disease or condition
  • If the drug or device is safe for people of a specific age
  • Dosage or other specific use involved
  • Does the drug or device work in specific conditions
  • Potential benefits and risks

[Source: FDA.gov]

Exceptions

When there are extraordinary situations, the FDA has a process to allow innovative drugs and medical devices available for early use before clinical trials produce data to get the real stamp of approval. Here are the three most common exceptions:

Humanitarian Use Device (HUD) – defined as a device intended to benefit patients needing treatment or diagnosis of a disease or condition that affects less than 4,000 individuals in the US per year. The FDA defines this application as similar in form and content to premarket approval applications but is exempt from the effectiveness requirements that a premarket approval application requires.

de novo Classification – in 1997, the Food and Drug Administration Modernization Act added the de novo classification choice; also known as the Evaluation of Automatic Class III Designation. This is an alternate pathway for novel devices that are a low or moderate risk to move to market. [source: FDA.gov]

Emergency Use Authorization – this wording has been pivotal in politicizing the value of vaccines. But it hasn’t been used just in the pandemic. The Emergency Use Authorization is a mechanism to ease the path for availability and use of medical countermeasures, including vaccines during public health emergencies.

Under an Emergency Use Authorization, the FDA can allow the use of unapproved drugs or products in an emergency to diagnose, treat or prevent serious life-threatening diseases or conditions after specific criteria have been met, including that there are no viable or sufficiently available alternatives. Once a manufacturer submits a request, the FDA will evaluate the request and determine if the specific Emergency Use Authorization criteria have been met, including taking into account the scientific evidence about the product that’s available to the FDA.

Bottom Line

A press release, by design, promotes the value of a market or service. Words mean something. And investors must perform due diligence to research and make sure they are not reading more into those words than is factual. Know the difference between clearance, approval, and the specifics of exactly what has been cleared for use or given the FDA gold seal of approval.