JMIR Publications

ABSTRACT

Background:

With the introduction of Regulation (EU) 2017/745 on medical devices (MDR), startups aiming to develop Software as a Medical Device in the European Union (EU) are confronted with a stringent and complex regulation many of them struggle with. The MDR is a costly, time-consuming endeavor requiring expertise and substantial financial resources. On the other hand, it opens the door for new revenue models, such as reimbursement pathways. As such, the MDR significantly shapes the business model of startups. Early on, the regulation needs to be considered for business modelling to survive the CE marking process financially. Business model frameworks are tools that reduce complexity by focusing on the key aspects of a business model. Thereby, the risk of overlooking essential elements can be minimized. A framework directly integrating the MDR could alleviate the intricate circumstances in which Software as a Medical Device startups are entangled.

Objective:

This study intends to derive a business model framework for startups aiming to develop Software as a Medical Device under the MDR. With the framework, we strive to facilitate business modelling for Software as a Medical Device startups.

Methods:

The study is based on a three-step approach. Firstly, a systematic literature review was carried out, resulting in a concept matrix and an overview of business model frameworks developed and applied in the digital health sector. Subsequently, 13 interviews were conducted with experts and startups in the Software as a Medical Device industry. Based on the literature analysis, the expert interviews, and supplemented with the MDR requirements for a Software as a Medical Device, we derived the Software as a Medical Device business model framework.

Results:

The Software as a Medical Device business model framework consists of 13 interrelated components, with the MDR being a pivotal component. The centerpiece of the framework is the Regulatory Value Arc, which is the trio of intended purpose, value propositions, and customer segments. For each component, valuable input is provided, making the framework tailored to startups aiming to develop a Software as a Medical Device.

Conclusions:

The findings highlight the crucial role of regulations in business modelling. Notably, the MDR is a central regulation for startups aiming to develop Software as a Medical Device. The study uncovers the impact of the MDR on business modelling for Software as a Medical Device startups. Our research provides a framework that integrates this regulation, thereby reducing its complexity and facilitating startups in deriving a sustainable business model. Concurrently, this research integrates the domains of business modelling and the MDR, thereby contributing to the academic discourse in both fields and addressing a notable gap in the existing literature.