Expanding into the U.S. market presents both tremendous opportunities and formidable challenges for international medtech companies. At LSI Europe ’24, a panel of industry experts, including venture capitalists, regulatory consultants, and executives from medtech startups, discussed the key considerations and strategies for achieving successful U.S. market access. From navigating regulatory pathways to commercial execution, the discussion provided insights into how international companies can position themselves for growth and eventual exit in the world’s largest healthcare market.

Understanding the Path to U.S. Market Access

The panel began by exploring successful approaches to commercialization in the United States. Alessio Beverina, Co-Founder and General Partner at Panakes Partners, emphasized that there is no single recipe for success but stressed the importance of having a dedicated commercial strategy.

“The first step when you move into the commercial stage post-FDA is to figure out if internally in your team you have the right resources, including in the CEO role,” said Beverina. “Engineers don’t know what sales is. I jokingly say that they believe their product is so good it sells itself—it’s not like that.”

Beverina also highlighted that companies often try different models—including direct sales teams, distributors, or medtech partnerships with larger corporations—but ultimately, building a localized commercial force tends to be the most effective strategy.

Robert Hornby, Investment Director at Mercia Asset Management, agreed, noting that a common mistake companies make is assuming that working with a large distributor will solve all commercialization challenges. “Trusting a big distributor to go and sell for you might work, but often it doesn’t because their salespeople don’t fully understand the technology or how to sell it. They have other products they can sell that are much easier to sell.”

Regulatory Considerations for U.S. Market Access

One of the most critical decisions international medtech companies face is whether to pursue FDA approval before or alongside European MDR certification. Angela Paterson, Principal Consultant at Compliance Solutions Life Sciences, strongly advocated for a U.S.-first strategy, given the cost and complexity of MDR.

“Under the new MDR regulations, gaining a CE mark is significantly more expensive and takes much longer compared to an FDA 510(k) clearance,” Paterson explained. “A 510(k) application, if you qualify as a small business, costs as little as $5,440 versus $21,760, which, for startups, is a huge amount of money. ”

Christophe Sibillin, CFO at Quantum Surgical, echoed this sentiment, pointing out the value of engaging with the FDA early. “What I like about the FDA is that you can engage in a Q-sub meeting and get direct feedback from the FDA teams, allowing you to prepare the file in the best way possible.”

Beverina added that the ability to interact with the FDA is a major advantage. “You can do as many Q-sub meetings as you want, discuss your plans, adjust accordingly, and reduce regulatory uncertainty. That’s a key reason why many of our portfolio companies prioritize the United States first.”

Economic Differences: Selling in the U.S. vs. Europe

Beyond regulation, the economic environment for medtech companies differs significantly between the United States and Europe. Hornby pointed out that while European healthcare systems focus on cost efficiency, the U.S. market prioritizes revenue growth.

“In the NHS, for example, the focus is on reducing costs and administrative burdens. In the United States, the conversation is about increasing revenue—hospitals and providers think about how the technology can generate more income,” Hornby said.

Beverina emphasized that the U.S. healthcare system’s openness to innovation makes it easier to drive commercial adoption. “In the United States, hospital purchasing officers and administrators are more willing to take risks on new technologies, especially if KOLs are pushing for them.”

Building the Right U.S. Team

Another key theme was the importance of having a local presence in the United States to drive commercial success. Paterson noted that most startups initially try to manage U.S. operations remotely, but this is rarely sustainable.

“Startups rack up air miles flying back and forth before eventually realizing they need a dedicated team on the ground,” she said.

Sibillin shared that Quantum Surgical addressed this challenge by hiring industry veterans with experience in the U.S. market. “We brought in seasoned professionals from major medtech companies, and while it was more expensive than we planned for, it paid off by accelerating our market access.”

Beverina reinforced this point, advising that the first U.S. hire is crucial. “If you find the right person—a commercial leader with the right network—they can quickly build a strong team and open the right doors. Trying to run U.S. sales from Europe is rarely successful.”

Achieving a Successful Exit in the U.S. Market

For many medtech companies, the ultimate goal of U.S. market expansion is a successful medtech exit via acquisition. The panelists emphasized that demonstrating strong revenue growth is now essential for attracting buyers.

“Ten years ago, 50% of medtech companies were acquired pre-commercialization,” Beverina noted. “Today, that number is just 8%. That means you need to prove commercial traction before attracting an acquisition offer.”

Sibillin stressed the importance of consistency and execution. “Say what you’re going to do, and then do it. Be crystal clear and sharp on execution. Engage with corporates early so they see your progress.”

Paterson highlighted the role of KOL advocacy in driving acquisition interest. “If top surgeons are presenting your technology at conferences and publishing case studies, strategics will take notice. Having KOL champions is often the best way to get on the radar of major acquirers.”

Beverina added that creating a competitive threat can also force a strategic buyer’s hand. “If you start taking market share from a major player, that’s when they’ll pay attention. If KOLs are backing your solution over theirs, they will feel pressure to act.”

Conclusion: Planning for Long-Term Success in the U.S. Market

Entering the U.S. medtech market is a complex, high-stakes endeavor that requires careful planning, regulatory expertise, and a dedicated commercial strategy. The panelists at LSI Europe ’24 underscored the importance of securing U.S. market access early, building the right team, and demonstrating commercial success to maximize acquisition potential.

As Hornby succinctly put it, “There’s no single recipe for success, but if you’re not thinking about U.S. market access from day one, you’re already behind.”

For international medtech startups, the message is clear: Plan early, execute strategically, and stay laser-focused on commercial growth to achieve success in the U.S. market.

Want to hear more insightful conversations like this? Join us for our next medtech conference in Dana Point, CA, from March 17th to 21st.