This article explores electronic license management, a simple solution for medical technology manufacturers that can ensure regulatory compliance while delivering a host of additional benefits, including simplifying how companies bring their products to market and ensuring they can maximize their revenue.


As healthcare facilities rely on an ever-growing population of medical devices controlled by FDA regulations, ensuring compliance becomes an increasingly complex challenge. At the same time, manufacturers have begun implementing more of their key features through software, turning these hardware providers into software companies that must confront issues related to software lifecycles, version control, and software pricing. Meeting these challenges, however, should not require a massive administrative and operational effort.


The Changing Industry

The global market for medical high-tech manufacturers continues to grow rapidly, with CAGR estimates ranging from 8 to 10 percent overall, and 15 to 20 percent for key high-growth segments. The FDA mandates a serviceable lifetime for many of these electronic devices, and safety issues may require quickly removing an electronic device from service. The Unique Device Identification (UDI) system was created to help address these issues; however, the UDI itself does nothing without a complete solution for tracking and enforcement—a solution best implemented via software.


In addition, many medical device manufacturers have found software a more cost-effective and flexible way of delivering value to their customers, whether through embedded firmware or peripheral applications. But as these companies create larger programs with more sophisticated features, they must be able to control entitlements, feature sets, and updates.


Electronic Licensing to the Rescue: Three specific benefits for medical equipment manufacturers

Compliance: Electronic licensing can be used to automatically force a device out of service after the expiration of an FDA-mandated threshold, expiration of a contract, or upon a device recall. The electronic licensing technology can be applied consistently across a manufacturer’s product line regardless of the mixture of hardware, software, and firmware used to manufacture the devices.


Feature control: Electronic licensing offers manufacturers the ability to produce a single line of full-featured devices, or a single piece of software that includes all features—but then limit the capabilities of a particular device or software based upon the purchase contract.


Multiple device identifier types: Electronic licensing technology supports multiple UDI types across a range of devices. This means the technology can be used to insulate the enforcement and monitoring mechanisms from the differences in the way that medical devices identify themselves. Once again, this dramatically simplifies management.


In addition to these specific benefits for medical equipment manufacturers, electronic licensing offers general benefits for any type of device manufacturer, including enabling creative packaging and pricing models, reducing the number of SKUs, and accurately tracking customer entitlements and usage.


Electronic Licensing in Action


Use Case 1:  Compliance

A medical device producer with multiple devices under FDA regulation needs a simpler way to manage device expiration. Some devices expire based on date, others based on a number of uses. Managing this information via a database and then tracking down the devices at the time of expiration has proven cumbersome, expensive and error-prone. Many devices are being sold on the secondary market into countries beyond the jurisdiction of the FDA, and the company often cannot find these devices at the time of expiration.


To solve these challenges, the company implements an electronic licensing solution that tracks each device and automatically puts it out of service when its expiration threshold is met. A particular advantage of the solution is that the electronic license remains part of the device even when it sells on the secondary market, so the company maintains complete and continuous control over enforcement.


Use Case 2:  Capabilities

A provider of low-cost ultrasound systems wants to seize market share from more established players by being first to market with a low-cost portable 2-D ultrasound station and then releasing a 3-D version of the device.


The company uses an electronic licensing solution to build a management console that ties entitlements to configurations, and then communicates with the devices using a hospital’s network-based picture archiving and communications system (PACS). By doing so, the company is able to manufacture a single piece of equipment that includes all the capabilities for both the 2-D and 3-D models. After shipping the 2-D models, the licensing solution makes it possible to remotely turn on the 3-D capabilities as an upgrade option. Electronic licensing eliminates the need to mass produce a fixed number of 2-D and 3-D ultrasound systems, significantly reducing manufacturing, inventory and distribution costs. It also eliminates the need for certified technicians to perform onsite upgrades.


Use Case 3:  Generating Revenue

When a manufacturer of large imaging devices recognizes that its customers suddenly find themselves needing to organize, analyze, transfer and archive huge amounts of data, the manufacturer develops an image content management system that runs on a PC separate from the device.


The manufacturer initially includes this system with each device, but as the image management system becomes more complex, the manufacturer realizes it can sell more sophisticated content management capabilities as upgrades. An electronic licensing solution enables the company manage the software lifecycle, develop an easy-to-manage pricing strategy, manage updates, and coordinate the software maintenance program.


Looking for an Electronic Licensing Solution

When evaluating an electronic licensing solution, first make sure it includes the end-to-end license management features that meet your specific needs for compliance, feature control, and product lifecycle management. Then consider additional capabilities that ensure an optimal end user customer experience:


  • A single view that lets manufacturers and partners manage embedded or accompanying software and easily turn functionality on and off.
  • High configurability, allowing key elements such as security and binding to be configured or replaced as needed.
  • Hands-free activation and silent trials that don’t require registration. This increases upgrades and up-selling opportunities by enabling silent trials of new capabilities.


David Znidarsic is the Vice President of Technology at Flexera Software