EPISODE 97: ETIENNE NICHOLS, MEDICAL DEVICE GURU

Etienne Nichols is a Medical Device Guru and Mechanical Engineer who loves learning and teaching how systems work together. He has manufacturing and product development experience, even aiding in developing combination drug-delivery devices, from startups to Fortune 500 companies, and holds a Project Management Professional (PMP) certification. Etienne has managed cross-functional teams for updating legacy products as well as developing new medical devices. His expansive knowledge, experience, and passion for medical devices are evenly matched with how much he enjoys helping customers work efficiently through the design and development process to bring safe, high-quality products to market.

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Episode’s Transcript

Julio Martínez-Clark: (00:00)
Welcome to the LATAM MedTech Leaders podcast, a conversation with MedTech leaders who have succeeded or plan to succeed in Latin America. Today, our guest is Etienne Nichols, I hope I am pronouncing your name correctly.

Etienne Nichols: (00:34)
Nailed it. Yep.

Julio Martínez-Clark: (00:35)
Excellent. Etienne is a medical device Guru and mechanical engineer who loves learning and teaching how systems work together. So, Etienne, thank you for being in the show today. It's a pleasure to have you here.

Etienne Nichols: (00:47)
Yeah, great to be with you, Julio. Thanks for having me on the show.

Julio Martínez-Clark: (00:51)
Awesome. Let's get started. So, Etienne, tell us about your experience or your journey to Latin America. How is it that you got involved with the region on a personal and professional level?

Etienne Nichols: (01:01)
Yeah, so on a personal note, you know, when I was in college, I had a really good friend of mine whose name was Juan. He was from Colombia and I just remember he and I worked, you know, when you're in engineering school, you work long hours and then you get up early to go to work, you just, it's just around the clock and we would be at his house constantly and his dad, who couldn't speak English to me, but he would always make the best milk and rice, I don't know what it was, but I said, someday I'm gonna go to Colombia and I'm gonna eat this in the country. So that's my personal, kind of like, where I was like, oh, Colombia, I wanna go there someday. Professional, we have a few customers that I have personally worked with in different places in Latin America. One in Columbia, one in Brazil but just a few customers that I've interacted with in Latin America as well.

Julio Martínez-Clark: (01:52)
Excellent. Very good. So, let's talk about trends that you see happening in the industry that are relevant to the business of doing studies or commercializing innovation in Latin America.

Etienne Nichols: (02:07)
Yeah, the thing that I go to when I think about, I mean, you almost have to look at it globally. It's not just, you know, you can focus on one country over another, and Latin America, certainly, obviously, it's the focus today, but if you look at it globally what's happening, EU MDR has always been, or the European market has always been, you know, go there first because it's a little bit easier to get to market and then eventually you bleed over into North America and the rest of the world. That's changing with EU MDR, especially with deadlines. A lot of the industry has been expecting another shift or another delay to those requirements and I don't think that's really a safe way to go. So it's looking like now this pendulum has shifted. So now where people may have been trying to be, you know, first in human in overseas, now it's looking like, you know, America is one, you know, North America. Sure but Latin America is even more appealing because of the increased timelines as far as first in human, some of these clinical trials, and then also some of the trends that you see as far as the cost. So both, timeline and costs, are hugely appealing when you look at Latin America compared to some of the other regions in the world.

Julio Martínez-Clark: (03:25)
Totally. Yes. What countries did you hear, or do you usually hear your clients talk about when they were thinking about early feasibility or first in human trials?

Etienne Nichols: (03:37)
Yeah, that's a good question. I don't have a specific country, you know, that comes to mind as far as that goes. Lately, I've just been hearing about the shift away from the European market.

Julio Martínez-Clark: (03:49)
That's true and also I would say that I just met with a sponsor, the CEO, of a medical device company, Itis a company out of Seattle, Washington and it's just shocking how unsatisfied he is with the FDA ID approval process for an early feasibility study and the word he used was: uncertainty. Uncertainty is the enemy of a startup. You cannot have uncertainty, you can have risk of course, but not uncertainty. There's so much uncertainty in Europe, of course, as you correctly said and there's so much uncertainty in the US as well. So that's probably the main reason why companies are looking at other places like Colombia to do early visibility work.

Etienne Nichols: (04:44)
Yeah, and I see you Julio as kind of the expert as far as Latin America as a whole. There are certain things that I know about the different regions of different things but I'd love to hear, I don't wanna flip this around necessarily, but I'd love to hear some of the things like you specifically say, Hey, this region, you know, maybe Colombia, just because, you know, that has part of my heart there, you know, some of the things as far as the uncertainty, cuz because I latched onto that word, uncertainty. What are your thoughts as far as the flip side in Latin America?

Julio Martínez-Clark: (05:17)
Yeah. The way it works is the approval process, the way it works in a country like Colombia, for example, and I'm Colombian as well, so I'm biased and we do most of our work in Colombia but I've analyzed pretty much the whole region. I just finished an article about comparing the regulatory approval process in Colombia, Mexico, and Brazil and if you put the three countries together, the timelines, the process, the steps, the review cycles and all that, I mean, it's just obvious that Colombia is perhaps the most appealing country and the country that offers the most certainty to these companies. That's what they're looking for, without mentioning cost savings and patient recruitment potential because of the size of the country, and the population. So, I will say that Latin America is getting more and more mature, countries like Colombia, and Chile are really making efforts to become knowledge economies versus commodity exporting or agriculture exporting countries, and knowledge economies mean that you have to somehow connect your industries to the world, especially the service industry in the clinical research is a great, it's just a fantastic way of connecting a country to the world to high level of knowledge about innovation and all that. So, I will say that Colombia is offering a lot more certainty, way more certainty than Europe or the United States right now.

Etienne Nichols: (07:07)
Yeah, absolutely. It's a good summary.

Julio Martínez-Clark: (07:09)
All right. So, let's continue. I heard that you guys did a great survey about the state of the industry. I'm just so thrilled to have you here and to speak about it. I mean, can you elaborate on that, what you guys concluded after reading all those surveys?

Etienne Nichols: (07:30)
Yeah. We did do a survey, we called it the quality management and product development survey, the 2022 State of MedTech. There were several things that came out of it. I guess I should start by saying, we interviewed 519 quality professionals and so when I say 519, about 60% of those were quality and regulatory clinical, about 26% of those were product development or engineering, and then we had a small sliver of manufacturing, and then about 11% worth corporate or executives. So the majority were quality and regulatory. That survey, covered a broad range of topics and you asked about conclusions, so we'll talk about it in just a minute but I also wanna say, we actually just, I think we just closed our most recent survey as well. So, we have about 600 this time quality professionals that we have interviewed. So we're getting ready for next year. So that'll be coming up, we'll definitely let your audience know when that's out. As far as the conclusions, there were some interesting findings and before I get to conclusions, one of the things that really stood out was that timing really matters. And to your point about Colombia, that's the thing that I noticed when I looked at the timelines between Brazil, Mexico, and Colombia. Just the speed at which you could expect to get through with Colombia was pretty mind-boggling compared to some of the others. I mean, it's almost an order of magnitude, isn't it? You know, the difference. So when we looked at the different classes, so class one, class two, class three for class three device on average, well, I don't know if it's really fair to take an average, but let's use percentages. The bulk, 47% of class three devices for the FDA took three to five years to get to market. So that's actually probably a little bit, I mean, that actually might even be a little fast compared to what I was expecting. About 23% of those expected, you know, they were around two to three years but the majority are expecting to take longer than five years. So if you can shave a year off of that. I mean, you now have 20% faster to market, 20% is huge. So, just timing, timing matters, you know, and we heard that from several different tiers of MedTech professionals as far as, you know, the different things that we heard. Another thing that we looked at was whether or not these medical professionals were using what kind of tools they were using, whether they were using purpose-built solutions or, you know, just general-purpose tools. It was about half and half. And when we looked at that, the ones who were not using purpose-built solutions, you know, something that was specifically built for their industry, timing was affected as well. So that was interesting. I'll kind of skip to the end as far as some of the top four things that we saw happening. So as far as the things that we saw was a disconnect between management and quality, the actual quality department. So there's a disconnect as far as whether or not, they were actually on target or excelling in quality. So management typically said, no, we're not doing well with quality. It was kind of like, the majority of them, whereas a lot of quality management said, we're doing pretty good. So there was a little bit of a disconnect there. So that was interesting, you know, something that to think about when we kind of did a few interviews with some different people as to why might that be the case, one of the thoughts was, well, management is thinking about two different things. You know, the quality may be thinking about how many CAPAs are open, and how many CAPAs have been closed, whereas quality in the upper executives might be thinking more along the lines of something like how fast are we getting to market? Have we produced more revenue? What does the outlook look like? So that was one of the things that we noticed. Supplier management was another one and I don't know, again, I love hearing from you Julio, you know, I know you were all on our podcast and so when I think supplier management, that's one of the things that I'd love to hear about as far as, you know, the Latin America and how you've seen some of those supplier, just cuz MedTech companies are gonna call it a supplier, whoever they are. But that partnership across those country lines, what have you seen as far as that management?

Julio Martínez-Clark: (12:22)
It's a good question. I don't know the answer to be honest with you. We don't get involved in quality issues with our clients. They just ask us for SOPs, and that's it. I mean, we're a US company, so we are not really involved, so, no, I don't have an answer for that, to be honest with you. I'm sorry.

Etienne Nichols: (12:48)
Well. No, no, that's okay. I just like to ask the question. I don't mean to put anyone on the spot. I'm supposed to be the one on the spot here. Well, you know, when we think supplier management, you know, we're going to a remote world, you know, and that's inevitable but when you talk about certain aspects of your suppliers, there are certain things that you need to be doing in person and this is me a little bit selfishly as a world traveler not necessarily by choice, my wife has turned me into one, she takes me different places and that's wonderful. I'm very thankful for that. When you choose your suppliers, you know, one of the things you need to think about is how close are they. How can I get to them? Can I have a relationship with them? And so you don't necessarily think of a country, you know, at least I don't necessarily think, is this country a place I wanna go to for that supplier? But that actually plays into your relationship with those things. So that might be another thing to think about when you're thinking about your long-term suppliers.

Julio Martínez-Clark: (13:47)
Yeah, that's a great point and of course, we operating in Latin America, and one of the things from the get-go, we started the company, we set it up as a US corporation. We are a Florida-based company, and that's also to give our clients that level of trust, you're dealing with a local supplier, you're dealing with a US company, and we're real people in the US. We're not some remote company in Colombia with a bank account with a Swift number that takes a whole page. I mean, a whole page of wiring instructions, you don't know if you're going to get your money. So, it's a great point and the word that buffer between our clients and our research centers, not our research center. I mean, the hospitals that we deal with are in our network of research centers, so they don't have to deal with foreign suppliers. So we make it easier for our clients in that way.

Etienne Nichols: (14:51)
So, supplier management just in general was one of the things that we saw quite a few people really felt like was below average. So actually 75%, 75% felt like their supplier quality management program was below average, or average or below average. So It's just one of the things that you need to think about. Another thing to think about, one of the other issues with, you know, that we found in this survey was one of the things that people experience is if you experience a warning letter, it may take three years to reach a resolution for that. Now, I come from the quality regulatory side, so I think a lot about the quality. That's one of the things that, again, that uncertainty and start tying it back to that word that you said, you know, certainty that what you have as a quality product, what you have is something that, you know, what is going to meet your expectations, that's important in the quality world because if you don't cut corners, if things don't work out the way you expect them to and so forth, those warning letters can take a long time to resolve.

Julio Martínez-Clark: (16:09)
Yeah. I'm sure. All right. So, basically, the issue of time is probably the issue that we can all help in Latin America, or the issue with Latin America can play a predominant role in the MedTech industry as you correctly found. That's also been my experience, that's usually what I hear. I mean, time, time, time. How can we start this trial faster anywhere in Latin America? Sometimes I have conversations where I have to give them the whole, to my potential client, the whole framework around the different countries so that they can understand where to go and where they can get their study approved faster. The other thing that I'm very thrilled about is your acquisition of Smart Trials. That will also save time and effort in managing these smaller medical device early disability studies, which are different from pharma studies. So, I think the partnership that we have and what we're putting together here is gonna benefit the whole industry because we're gonna solve one of their pain points, one of the problems, which is the time to take that takes a device to get to market.

Etienne Nichols: (17:39)
Yeah. Not just the time too, but like you said, the certainty. When you have clinical trials spread over multiple locations and you're trying to capture all that data, whether it's on paper or through, you know, just however that's being captured, really a solution like a smart trial is really the way to go as far as that electronic data capture. I mean, it will increase your certainty and your ability to just have a lot more confidence in what you're actually performing.

Julio Martínez-Clark: (18:11)
Yes, and I guess now with the acquisition of Smart Trials, your survey may change a little bit, may add different questions, right? Related to clinical research because it is a really hot topic nowadays. The increase in demand that I've seen this year has been unprecedented.

Etienne Nichols: (18:35)
I think something and I'm curious to see how it's changed. I remember one of the numbers from your articles actually was the increase, which from 2012 to 2017 was like 94% increase, and that's five years old.

Julio Martínez-Clark: (18:49)
Yeah. I mean, every week I get at least three new inquiries on our website about a new study in Latin America. So definitely there is an issue happening in the United States, there's an issue happening in Europe, there's a bottleneck somehow also because of Covid, probably because there are new investors, who know, what really go this, but it's probably a combination of factors and certainly Latin America has become a place to help to fix this issue of timing.

Etienne Nichols: (19:29)
Exactly. It's funny, we think about the development of a medical device and how much a chunk of that clinical trial is, the cost of developing that medical device. You know, some studies, I think it's not quite half per half the amount of cost but historically it's been in the 30% to 40% range, I think, that's the amount of money it takes to develop a medical device and to put it through a clinical trial. If I'm not mistaken, you know, some of the things I think I have read from you, it's like 60% reduction in costs as those clinical trials.

Julio Martínez-Clark: (20:12)
Yes. That's kind of accurate. Anywhere between 30 and 60%, I would say, especially in Colombia with the Colombian peso at a historic low versus the US dollar. It's just really unbeatable as a country, I mean, to buy services from a hospital in Colombia, you're gonna get a great bargain, It is the second most devalued currency after Venezuela and Argentina, Venezuela, well, obvious reasons. Argentina is a country that is struggling so much to get ahead, and it's very unstable in many ways, economically, politically, and socially, but inflation in Venezuela and Argentina is just really difficult. It's just funny, you walk the streets of Colombia in Bogota and there are people selling crafts on the streets with Venezuelan currency. They sell hats and they sell purses, that's how bad it is. The issue with clinical research in Venezuela is interesting. I'm involved with a hospital in Caracas, probably the largest private hospital in Venezuela and we are doing a study with an interventional cardiologist, one of the top in Latin America; he's from Caracas, and he works at the hospital, and we're working on a couple studies in Colombia. He's a proctor of the sponsor for the study in Colombia and we talk a lot about doing studies in Venezuela, the issue is that Americans cannot travel to Venezuela but Venezuela could be an ideal place for clinical research if Americans could get visas and travel to the country because it's a country of over 45 million people, something like that. Colombia is 53 now, and it's a country that has a great infrastructure, private at least, the public infrastructure is gone. There's really no universal healthcare system or anything like that. It's all private. You have to have money. It's dollarized. So, prices are probably not as cheap as in Colombia, but it could represent great savings for companies, and eventually, the issue will be fixed. I mean, Americans will eventually be able to travel to Venezuela. Actually, the pioneer of early feasibility clinical research in Latin America was Venezuela, Dr. Corrado, from Caracas, like 20 years ago.

Etienne Nichols: (23:03)
When I was first thinking about this, first in humans and some of the clinical trials, one of the issues that I kind of thought, well, what about recruitment? You know, is it truly representative of the same type of population you might see in America? Whether it's diet-based, or things like that. The countries, you know, really impressive as far as, you know, having not been there myself, just the things that I've read and the things I've learned about it, it's to a level where, you know, the same, very similar, different stratas of life, I guess different tier, whether it's diet and so forth. So, that kind of erased one of the biggest concerns in my mind when it came to, you know, clinical and actually was a big convincing factor in my mind that it would be an appealing place to go.

Julio Martínez-Clark: (23:53)
Exactly. Latin America is very Americanized nowadays and hospital infrastructure, the way people practice medicine, and the lifestyle are very Americanized. It's just like in the US it's a mix of cultures. I mean, countries like Argentina, I mean, probably the population mix is very similar to the United States, very European influence. Colombia is a great mix, it's a little bit of everything, you have Italians, Germans, of course, Spanish. In Colombia, you have also Asian communities, and you have a Middle Eastern population. So, it is kind of similar to the US in a way.

Etienne Nichols: (24:53)
So, I'm curious about, so you heard kind of my personal anecdote at the beginning about, you know, maybe Colombia or whatever, I'm curious if you could tell me your quick snippet as to why I should go to Colombia. Maybe not even necessarily from a clinical standpoint, I just, you know, having been there, the native yourself, I'd just love to hear what you have to say about it real quick.

Julio Martínez-Clark: (25:18)
About what, excuse me, about going to Colombia?

Etienne Nichols: (25:20)
Yeah. Just, you know, I'm just imagining I get off the plane and I'm going to the hospital, but maybe I want to do something else. What do you recommend? What should I do first?

Julio Martínez-Clark: (25:32)
I see. Well, if you go to Colombia, you have to visit Bogota is perhaps one the largest metropolitan areas of Latin America with Mexico City, Sao Paolo, and Buenos Aires. It's kind of the same level. You get out of the airport, and first of all, one of the best airports, if not the first, there's a recent survey on this is in Bogota. El Dorado Airport is perhaps the best airport in Latin America right now, that's a lot to say, but it's brand new, just an impressive airport, and the highway that you see is really impressive. Bogota is the capital city, Bogota is a place of over 10 million people. It's a large metropolitan area that has one of the best hospitals in Latin America. The reason for that is because the geographic location of the country is kind of privilege cause it is the first country in South America, so everybody from the Caribbean travels to Colombia for medical care, for advanced medical care; everybody from Central America, Panama, Costa Rica, Honduras, Nicaragua, they either choose to go to Mexico or Colombia; and everybody from the south, everybody from Ecuador or Peru, well, not so much Peru, but unless you're in the northern part of Peru but Ecuador, Bolivia, they all travel to Colombia for medical care. So, I would say Bogota, Medellin is a fascinating city, very metropolitan, very multicultural, the other city that is up and coming is perhaps the fastest growing city in Colombia, probably one of the fastest growing cities in Latin America is Barranquilla. Barranquilla is the largest city in the whole Caribbean basin after Miami. That's a fact that not many people know about. So, It's a city of about two and a half or 3 million people, but the area of influence of Barranquilla is about 10 million people, cause it covers the whole Caribbean coast, the largest metropolitan area, it's right in the middle of Santa Marta, it's a smaller city towards the north, and Cartagena which everybody knows about, is towards the south. Barranquilla is the center, the economic center of the Colombian Caribbean coast, and has a large number of hospitals. I will say there are about at least 10 high-complexity hospitals in the city. So patient recruitment is great.

Etienne Nichols: (28:34)
That's fantastic. You know, community is one of the things that I don't think about, I don't know that we think a whole lot about in MedTech, you know, just the community in general. The MedTech itself is kind of a small industry but if you go to someplace that's, you know, if you try to go to the mayor clinic or wherever else where you're not listened to and perhaps at whatever level you're at, what I'm curious about is, you know, the different communities within those hospitals and the ability to have a better relationship with those. You work in the US and directly with the hospital. So I'm sure you see and manage a lot of that relationship but, that's one of the things that I'm interested in learning a little bit more about too in the future.

Julio Martínez-Clark: (29:18)
Yes, exactly. I'm always very beyond about the possibilities of bringing your technology to Latin America. There are a few hubs of innovation in the region, and medical devices are increasing now that we can use software as a medical device, you find a lot more entrepreneurs trying to do something in this area. So it's a slowly growing industry in Latin America. I would say Brazil, Colombia, and Argentina, I mean, the top five countries in the region have the need for software that offers quality management systems. So, it would be fantastic to translate this offer into Spanish. I don't know if you guys have plans to do that, but that's a growing area.

Etienne Nichols: (30:09)
That's fantastic feedback. That's a really good point. I don't know what we do at the moment, but I need to check with my product team. I should probably keep my mouth shut until I know for sure but like I said, you know, I'll send a link to that state of 2022 report, and then eventually when we have our state of 2023 report release, we can definitely send that your way as well. But one of the things that we saw that I already mentioned was just the companies that don't use those specific tools to help them get to market, whether it's something like Green Light Guru or smart trial for their clinical trials, they're moving slower than the ones who are using those purpose-built tools. You know, I look at it kind of like, you know, as a mechanical engineer, if I look back at my past, I had the privilege to work at a company where it was a hundred-year-old company. It was in the steel industry before I came to MedTech. We had four different ways of keeping our drawings, we had them on paper, I can't remember, just the massive pieces of paper that people had hand drawn, which is fantastic, we had microfilm, we had index ideas, and then we had solid works, you know, guys like me are like, why are we not using solid works for everything? Look, I can do what you do four days in five minutes. And it's just kind of the way the world, you know, it's always changing and the companies that embrace that change, they just move faster.

Julio Martínez-Clark: (31:36)
Totally. I agree. All right, Etienne, we are close to the end of the show. Thank you so much for being here. It was a delightful conversation. I look forward to being in touch.

Etienne Nichols: (31:46)
Yeah, fantastic. Great talking to you, Julio.

Julio Martínez-Clark: (31:48)
Bye-bye. Thank you.

Etienne Nichols: (31:49)
Bye. Take care.