Worldwide Medical Device Regulatory Updates

As medical device quality assurance and regulatory affairs professionals, it can be challenging to stay on top of changes happening in our industry. Few people have the time to read lengthy articles these days and although many online newsletters exist, they are often packed with PR releases, ads or unrelated information. That\'s why we started this blog for QA/RA professionals in the medical device and IVD industry. The idea is to give you short updates on quality and regulatory topics that may be of interest to you. No fluff, just straight to the point. We hope you\'ll enjoy the content.

New US Reimbursement Policy Targets Some Medical Devices

A new Centers for Medicare & Medicaid Services (CMS) policy going into effect early next year will require prior authorization for some medical devices and equipment for Medicare patients in seven US states.

The new policy will also require pre-payment of reimbursement claims for some medical devices across 11 US states.

These reimbursement policy changes are intended to cut down on improper payments.

According to a Massdevice analysis of the new CMS policy, the new prior authorization requirements target 15 procedures, including pacemaker and defibrillator surgeries, spinal fusion procedures and joint replacements. These requirements will be implemented in two phases: During the first three to nine months of 2012, Medicare administrators will conduct prepayment reviews of certain medical equipment claims, followed by outright implementation of prior authorization requirements.

The prior authorization policy will affect Medicare recipients in California, Florida, Illinois, Michigan, New York, North Carolina and Texas. Claim pre-payment requirements will impact California, Florida, Illinois, Louisiana, Michigan, Missouri, New York, North Carolina, Ohio, Pennsylvania and Texas.

Markets: USATags: CMS, Medicaid, medical device, Medicare, reimbursement, US

Author: Stewart EisenhartDate: December 6, 2011

German Med-Tech Industry Reports 5% Growth

Germany’s medical technology industry has seen sales rates grow by more than five percent according to a survey by the German Medical Technology Association (BVMed).

The BVMed survey had 117 participants, and was released before the 2011 Medical tradeshow in Düsseldorf last month. Key results:

Nearly 80% of respondents expect 2011 sales to eclipse their 2010 results, due primarily to growth in exports
Despite sales growth, German medical device manufacturers are having to deal with rising costs of raw materials and transportation, as well as late payments—all of which are impacting profits
Half of all survey respondents have created new jobs in 2011, and 35% of respondents have maintained current staff levels over the same period; BVMed estimates that its entire membership of firms has created 3,000 new jobs in Germany within the last year
A majority of respondents indicated favorable views of Germany as a business location, citing high levels of patient care, good infrastructure, efficient market approvals and high standards of clinical research as strong points
Respondents perceived weaknesses in Germany’s reimbursement system, including increasing pricing pressures from purchasing groups, low reimbursement levels and statutory health insurance policies “hostile” to innovative products

Steps respondents would like to see taken in order to address weaknesses in the German medical device regulatory system include shorter decision-making timeframes by the Federal Joint Committee, as well as reforms for self-governing bodies.

A key question based on the survey results is which export markets are providing the most sales growth for German medical device manufacturers. Are these markets primarily other European Union member states, or they primarily overseas markets in Asia and the Americas? As the European economic crisis continues to unfold, these firms may find it harder maintain sales rates in their closest markets.

Markets: EuropeTags: BVMed, EU, germany, medical device, medical technology, reimbursement

Author: Stewart EisenhartDate: December 1, 2011

US Device Manufacturers Feeling Price Pressure from Hospitals

Medical device manufacturers in the US market are reporting mounting pressure to lower product prices as clients such as hospital groups seek to lower procurement costs and stem operating losses.

According to a survey by hospital group purchasing organization Premier Inc. (via Dow Jones Newswire), hospitals have lost more than $1 billion due to high-cost medical devices and have indicated interest in purchasing lower-cost alternative products in the future.

In another Premier survey of hospital executives cited by the Dow Jones article, a majority of respondents reported plans to seek less expensive alternatives to brand-name medical devices that could provide similar or better clinical outcomes, potentially squeezing profits for top-tier manufacturers like Medtronic and Boston Scientific.

Hospitals’ 2010 losses stemmed from Medicare reimbursement shortfalls for cardiac and orthopedic procedures involving implantable medical devices, Premier reports; highest losses involved heart valve replacement and spinal fusion procedures. Manufacturers have traditionally relied on physician practices as clients for sales of cardiac and orthopedic devices, but hospital groups have bought up much of that client base in recent years.

In the Dow Jones story, analysts at Goldman Sachs and Mizuho Securities expressed caution regarding medical device industry growth next year in part due to Premier’s findings on hospital groups’ purchasing plans. But while cardiac and orthopedic device manufacturers may feel the most pressure to reduce prices, makers of lower-cost and commoditized medical devices and supplies should be much less impacted by hospital groups’ buying decisions.

Markets: USATags: FDA, Goldman Sachs, hospital groups, medical device, Medicare, Medtronic, Mizuho, reimbursement

Author: Stewart EisenhartDate: October 24, 2011

Eucomed Unveils Five-year EU Healthcare Strategy

European medical technology trade association Eucomed has published a five-year strategy for improving the EU healthcare system by more closely aligning medical technology with health care delivery and reimbursement models.

Citing ageing populations, growing labor shortages and other demographic trends posing challenges to the current European healthcare system, Eucomed proposes a focus on “value-based innovation” by medical technology manufacturers in order to improve both cost efficiencies and health outcomes. It is incumbent upon industry, according to the Eucomed plan, to develop a collaborative model with healthcare providers and regulators whereby industry will:

Establish the value of medical technology and product innovation
Develop and share evidence-based arguments that medical technology can support health ageing
Prove medical technology’s cost efficiencies
Expand innovative practices to address looming healthcare labor shortages
Increase the medical technology industry’s value within the broader EU economy

Eucomed also recommends changes in healthcare spending practices, noting that currently only five percent of such spending in the EU goes to medical technology, whereas 70% of spending goes to medical care delivery. Investing in medical technologies to boost prevention as well as efficiencies within healthcare systems will require major adjustments to those spending percentages, Eucomed argues. In addition, the group contends that silo-based funding and reimbursement of healthcare in the EU should be phased out in favor of value-based pricing to incent medical technology innovation as well as better longer-term health and economic outcomes.

Eucomed members will be required to sign on to its plan by 2015. Demonstrating value-based evidence of medical technology can improve healthcare systems could drive European regulators to more fully support the group's recommendations--depending on how convincing that evidence is.

Markets: EuropeTags: EU, Eucomed, medical technology, reimbursement

Author: Stewart EisenhartDate: October 13, 2011

EHTI Research Takes Aim at “Innovation Paradox” in EU Medtech Procurement Policy

New research by the European Health Technology Institute for Socio-Economic Research (EHTI) puts forth five recommendations to address the impact of more centralized medical technology procurement policies among European health systems on product innovation.

The EHTI’s report, Resolving the Innovation Paradox of MedTech Procurement: Five Lessons from Research Outcomes, argues that moving toward centralized procurement processes has enabled health systems to reduce short-term costs at the expense of longer-term cost effectiveness via innovative treatment regimes. In order to get beyond this mindset prevalent among procurers, medical technology providers should carefully consider issues such as value perception, innovation models and barriers to new product adoption.

First, EHTI recommends providers more clearly articulate the value their innovations offer—rather than just list technical features and expect clients to infer value—in order to successfully commercialize their products.

Second, providers should identify communities of practice most relevant to their products, and deploy their marketing and sales efforts accordingly.

Third, better recognition of barriers to adoption related to increasing use of cost-control measures and more difficult product differentiation would allow managers to plan earlier and more effectively to overcome those barriers.

Fourth, the EHTI identifies the growing use of Health Technology Assessments (HTAs) across the EU as a challenge to manufacturers of innovative medical technologies and devices, primarily because HTAs in their current form have been designed largely for pharmaceutical products. As such, providers should persistently and constructively suggest HTA bodies develop new methodologies to address significant differences between pharmaceutical and medical technology products.

Fifth, successful product commercialization includes not only initial adoption rates but also sustained ones, particularly as development costs grow and product lifecycles shrink. Accordingly, providers should include analysis of product sustainability in their launch plans.

Markets: EuropeCategories: Regulatory ComplianceTags: EHTI, EU, European Health Technology Institute, Health Technology Assessment, HTA, medical technology, procurement, reimbursement

Author: Stewart EisenhartDate: April 11, 2011

Report: US Reimbursement System Hinders Novel Diagnostics Development

The current US reimbursement system has slowed development and adoption of novel diagnostic devices, in turn impeding patient access to these devices as well as investments in research and design.

A new report from medical technology consultancy Health Advances and the Biotechnology Industry Organization (BIO) ties greater utilization of novel diagnostics by health care providers to the advancement of personalized medicine for patients. Providers can differentiate individual patient characteristics, implement more personalized treatments and improve outcomes through the use of novel diagnostics, argues the report.

The key challenge to wider use of these products, according to Health Advances and BIO, lies in the US’ current reimbursement system, which supports simpler diagnostic tools based on traditional industry practice. Coverage for novel diagnostics is not consistent across payers, provides little transparency and lacks efficiency, which in turn negatively affects coverage decisions and limits access. Inconsistent coding practices, furthermore, have attracted greater scrutiny from insurers.

Reimbursement challenges also depress investment in further development of novel diagnostic products, further obstructing access to them. Lacking a clear idea of what level of evidence is necessary to obtain reimbursement for novel diagnostics, manufacturers are also faced with inefficient product development as well as rising R&D costs.

The report suggests several short- and long-term avenues to reform the reimbursement process in order to improve development and uptake of novel diagnostics: developing more specific codes as well as economic study standards for these products in the near term, using evidence development and risk-sharing payment arrangements to cover these products in the midterm, and setting up a centralized entity for coverage and value assessment of novel diagnostics over the longer term.

Markets: USACategories: Regulatory ComplianceTags: bio, Biotechnology Industry Organization, diagnostics, novel diagnostics, reimbursement

Author: Stewart EisenhartDate: January 21, 2011

Brazil: New Reimbursement System in the Works

The Brazilian National Congress’s Committee on Constitution and Justice and Citizenship has approved the incorporation of medical treatments and equipment into new reimbursement rules under the country’s public health care system, Unified Health System (SUS).

According to Emergo Group consultants in Brasilia as well as Brazilian press reports, the new proposal still requires presidential approval prior to implementation. The new rules will allow health care providers to submit requests for new treatments, drugs and devices to the SUS’s National Incorporation of Technologies unit for review; reviews should take no more than 270 days to complete, after which products gaining approval will be published in the SUS’s reimbursement tables. If the review period for a particular device exceeds the 270-day period, that device will be published by the SUS until the completion of the review.

Proponents of the measure in the Brazilian government have cited the need for clearer regulatory parameters in order to facilitate faster uptake and support of—and thus reimbursement for—new and better medical technologies by the SUS. (Current health care reimbursement rates in Brazil have been characterized as highly inadequate and cumbersome.)

Industry impact: Setting in place a more regimented and (hopefully) efficient reimbursement process in Brazil should make it easier for health care providers to utilize cutting-edge medical devices in their treatment regimens, boosting demand among public health system professionals now able to seek financial support from the government for such products.