Harmonizing Safety and Speed: A Human-Algorithm Approach to Enhance the FDA’s Medical Device Clearance Policy

The United States Food and Drug Administration (FDA)’s 510(k) pathway allows manufacturers to gain medical device approval by demonstrating substantial equivalence to a legally marketed device. However, the inherent ambiguity of this regulatory procedure has been associated with high recall among many devices cleared through this pathway, raising significant safety concerns. In this paper, we develop a combined human-algorithm approach to assist the FDA in improving its 510(k) medical device clearance process by reducing recall risk and regulatory workload. We first develop machine learning methods to estimate the risk of recall of 510(k) medical devices based on the information available at the time of submission. We then propose a data-driven clearance policy that recommends acceptance, rejection, or deferral to FDA’s committees for in-depth evaluation. We conduct an empirical study using a unique data set of over 31,000 submissions that we assembled based on data sources from the FDA and Centers for Medicare and Medicaid Services. Compared to the FDA’s current practice, which has a recall rate of 10.3% and a normalized workload measure of 100%, a conservative evaluation of our policy shows a 32.9% improvement in the recall rate and a 40.5% reduction in the workload. Our analyses further suggest annual cost savings of approximately $1.7 billion for the healthcare system driven by avoided replacement costs, which is equivalent to 1.1% of the entire United States annual medical device expenditure. Our findings highlight the value of a holistic and data-driven approach to improve the FDA’s current 510(k) pathway.

This paper was accepted by Stefan Scholtes, healthcare management.

Supplemental Material: The online appendix and data files are available at https://doi.org/10.1287/mnsc.2024.06477.