MedTech Market Access Hurdles are a Global Problem By Amit Kukreja and Matias Gonzalez Posted in Medical Device Business by MDDI Staff on March 25, 2014 Medtech companies are developing more breakthrough technologies, but getting those innovations to market around the world remains a challenge. We are living in times in which opportunities for innovation in medical technology and the subsequent improvement in healthcare provision have multiplied. Advances such as the artificial retina (or bionic eye), bone-cell generation, and 3-D printed exoskeletons once thought possible only in science fiction have become reality. Today, innovative medical technologies can cure, diagnose, treat, or provide rehabilitation for previously unmet needs. The medtech industry is mainly driven by SME research and development, and ongoing revolutions in key areas, such as neurostimulation, bionics, nanotechnologies, or 3-D printing, are exponentially increasing opportunities for the next generation of devices.3–5 But despite medtech's significant potential for improving the quality and efficiency of healthcare, barriers in the access to advanced technologies have also been growing in recent years and this may negatively impact the incentives for research and development in the industry. Even though the commercial climate in some of the biggest medtech markets still looks positive, signs of deterioration have become evident in most of the traditional commercial hotspots in recent years.3,5 Complex reimbursement and procurement pathways, budgetary constraints, and increased price control mechanisms are all taking a toll. Other factors impacting market access for breakthrough medtech products include the following:
v A weaker venture capital climate due to the financial crisis.
v New low-cost competitors.
v Inadequate patent protection in many emerging markets.
v The changing regulatory landscape.
v A lack of transparency in many ongoing healthcare reforms.
v Hospital practices' slow progress in adapting innovative technologies (e.g., in the UK).
v Lengthy assessment processes (e.g., in the outpatient sector in Germany).
v Increased development costs.
v Health technology assessment methodologies that are still not fully developed for the sector.
v More stringent evidence requirements. 1–9
The reimbursement approval process in European countries is often considered more complex than that in the United States due to its increasing focus on evidence-based reimbursement decisions and cost-containment policies. Consequently, reimbursement access has become the focus of many device makers' attention in a number of global markets. After obtaining the CE mark in Europe, manufacturers face fragmentation in reimbursement scenarios across as well as within countries—for example, subdivided by regions in Wales and Northern Ireland within the UK or by 21 regions in Italy, with a large difference in cost structures in the northern and southern parts of the country. Furthermore, key factors affecting technology access, such as variation in hospital purchase functions, and commissioners and patient organizations, have only emerged in recent times. This creates a multiple stakeholders and multiple entry points to the marketplace. Strong analytics and value propositions should be elaborated to meet different stakeholder's needs. Additionally, cost containment pressures in such markets leads many caregiver institutions to focus on procurement as an area where they can cut operating costs. In some cases, management and procurement among institutions (such as primary care trusts in the UK in the past) can be fragmented and uncoordinated, for example, for high value capital equipment. 6,8 As observed by Eucomed, some of these factors may have little or nothing to do with how well or how safely a device performs its intended task.2 In the case of breakthrough technologies such as the bionic eye and others, some additional obstacles should be considered throughout the market access process. These challenges include educating and training the medical community on new treatment procedures and therapies, creating awareness programs for patients, and building the necessary infrastructure to conduct the procedure. There are economic barriers such as temporary, short-term approval conditions, and companies must also clear hurdles such as achieving final adoption by hospitals and eventual incorporation into diagnosis-related groups' (DRG) coding systems. These challenges build numerous uncertainties in the process and restrain a product's growth potential. Highly innovative devices must demonstrate strong long-term clinical evidence, which leads to a longer regulatory process. More critically, market access for these novel devices depends on the fundamental roadblock of a lack of preexisting reimbursement mechanisms (i.e., codes, coverage, and payment rates). For instance, in many of the western reimbursement systems, a device must first be in widespread use among physicians before the company can apply for the creation of a new reimbursement code, creating the risk of a circular problem.6 The disproportionate balance in market access conditions between incremental innovations and breakthrough technologies is all too evident. In recent years, policy makers in some countries have begun to address these barriers in access to innovative medical technology. In Germany, the annual new diagnostic and therapeutic methods (NUB) program offers a unique platform for market access to innovative medical technologies. As product use and clinical confidence in the new therapy grows, it eventually gets fully integrated into a DRG. Based on product development stage, France offers multiple platforms to introduce innovative technologies into its healthcare system, including PMRE, STIC, and Article 165-1-1. In Italy, each region can decide to reimburse or not reimburse a new technology, which can serve as a platform to open doors for new innovations in Europe. Similar early-stage, temporary funding and policies can also be found in other countries outside Europe, such as CMS's temporary DRG in the United States. In the case of emerging economies, a recent report commissioned by the Dutch government for the WHO on overall barriers to medical technologies innovation arrived at similar conclusions regarding barriers in developed markets and innovation incentives, while addressing the conditions that are specific to emerging economies.9 First, the broader category of developing countries represents a new market opportunity for the medical device industry, with a strong degree of reliance on imports, opportunities for lower production costs, and in terms of their total population (4.9B), generating and aggregating gross domestic product comparable to that of developed nations. According to the report, common barriers to innovation shared by both developed and developing countries include limited staff training, resistance on the part of the established medical practice, and reluctance to admit the need for a skills upgrade. For example, among the studied cases of radical innovations in the field of ophthalmology, the slower adoption of intraocular lenses and phakoemulsification by the UK as compared with other jurisdictions was due both to resistances in adopting and acquiring necessary skills, and to methods of resource allocation reflected on managers' fear that potential demand could not be met.7,9 However, there are barriers to innovation that are unique to the developing world, including costs, lack of spare parts and consumables supply chains, expertise training, infrastructure, and lack of universal health insurance system. Concerning emerging economies (such as those in Brazil, Russia, India, and China), systems operate under different and complex dynamics, with some similarities to a developed market environment—especially from a private-pay perspective. Even if such economies are commonly grouped as "emerging," each of these markets is at a different stage of maturity— from regulatory process, public-private insurance system, or a Health Technology Assessment (HTA) development. Considering the local healthcare environment combined with cultural and business complexity, there is no single approach with which such markets can be approached. Some of these hurdles affecting market access for technology-led innovations are comparable to the challenges faced in Europe. For example, the emerging role of HTA in South Korea, Taiwan, China, Mexico, and Brazil is another indicator of how these markets are developing their public healthcare coverage policies along the lines of some of the European markets. In sum, an increasing number of breakthrough medical technologies are being developed to fulfill unmet clinical needs or to achieve improved patient outcomes. It is therefore imperative to achieve a broader recognition of the need for improving market access conditions for valuable and life-saving medical technology innovations. Greater transparency in reimbursement and funding decision-making processes is urgently needed, while the need for a fresh, innovative approach toward evaluating breakthrough medical devices cannot be emphasized enough. Even though globally many policy efforts are moving forward on these issues, most countries have yet to figure out the overall balance of their healthcare investments, reimbursement decision process, patient care programs, optimal incentives for research and development, and the ultimate impact of such policies on the medical innovation ecosystem at large.
References
1. Drummond M et al, "Economic evaluation for devices and drugs -same or different?" Value in Health: V12, 4, 402-6, 2009.
2. Eucomed, "A MedTech map for bypassing market-access roadblocks", 2012, accessed on 10-08-2013 http://www.eucomed.org/blog/102/77/blog/2012/01/07/A-MedTech-map-for-byp....
3. Eucomed, "Medtech industry must change its way of doing business to remain successful in the EU", 2012, accessed on 13-08-2013, http://www.eucomed.org/blog/95/159/blog/2011/09/06/Medtech-industry-must....
4. European medical device technology, "Breakthroughs of 2013 (So far)", accessed on 12-08-2013, http://www.emdt.co.uk/article/medtech-breakthroughs-2013-so-far.
5. Simon-Kucher & Partners, "Med-tech Barometer survey", 2011, accessed on 12-08-2013, http://www2.simon-kucher.com/files/MedTech_Barometer_2011_Short_Summary_....
6. Mediclever Outsourced Medical Reimbursement, "A shortcut to medical device reimbursement in the UK", 2012.
7. Metcalfe et al, "Emerging innovation systems and the delivery of clinical services: The case of intraocular lenses", Research Policy 34: 1283 – 1304, 2005.
8. SCRIP insights, "Pricing and Reimbursement Strategies for Medical Devices", 2012.
9. The WHO, "Barriers to innovation in the field of medical devices," 2010.
Amit Kukreja, MBA, B.Engg, is director of market access and reimbursement at Second Sight.
Matias Gonzalez, Msc, MA, PhD, is assistant researcher at the Centre for Research in Health and Social Care Management (CERGAS) at Bocconi University.
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