While it is easy to say make regulations elastic to do everything they intended to do without hindering innovation, practically insuring that everything is done to prevent a critical failure once on the market and deregulating as a means of sanctioning progress is almost impossible with a regulation that affects such a broad range of things from inter-aortic balloon pumps to bandages. Reducing the size of this umbrella may make the process seem easier but then time and man power become a greater issue. In this case, being all inclusive of potentially harmfully devices far out-weighs the fact that some genius ideas may have been hacked in the process. I agree than some innovations are shot down because of this but there is no way around testing an artery made of a manufactured biomaterial in a patient before putting it on the market. Reacting to an outbreak is much harder to contain than preventing it in the first place through controlled environments. And if it critically fails, at least the damage was minimized, and the spread fully monitored/understood.
One solution would be for the government to create program, like shark tank but for innovative medical devices, that allows companies, individuals, and organizations to submit their ideas on a periodic basis and the company(s) that can show the medical significance and the impact factor of their innovation is worth the investment and feasible, the government would help fund the trials/testing. Note that this would have to be under something unassociated with the FDA to ensure that the same scrutiny is used when the product is finalized, and the results are released.
Requesting an FDA analyst, on the FDA payroll, (a made-up position atm) to visit the requestee be it an institution, company, or organization and after signing a confidentiality agreement if need be for certain proprietary aspects of the material being viewed, the company can present certain innovative ideas to the analyst who will then make a report to the FDA regarding the idea. The response to the report will determine any assistance the government will be providing as well as what needs to be done on the companies half as well as accountability and revenue splitting should the product be successfully launched. The revenue made will be used to fund that portion of the FDA, self-sustaining hopefully after the initial investments, used for further investments, and health grants to pay for medical treatments for patients who would otherwise not be able to get life-saving treatment because of lack of insurance of the fact that the treatment is not covered.
Potentially making changes to the clinical trials(CT) process itself may also help even though this is completely dissociated with the regulations in place requiring CT, if the CTs cost can be optimized and components of the trial be broken down to the minimum requirements to ensure the efficacy of the study then with less aversion to CTs, companies may begin investing in themselves and their own innovative ideas.

aij5, I agree with you completely but I think that the issue doesn’t always fall in the funding since many of the ideas are killed in their embryonic stages before there is anything worthy of funding to show. Ideas are shot down in fear of clinical trials so the investment needed to even test the viability of the idea is never given and the ideas die.