"The medical devices I'm talking about require around $50K–$200K for FDA clearance"

I think that's only if you use the expedited approval process (510k).

I actually had an idea for a medical device. Turns out there was a patent on that idea already. It wasn't on the market yet. The potential client population wasn't very big, but just big enough to make it worth while.

Are you saying even if I stretch the budget to $500k, there isn't a niche where I can find viable device?