Christoph Böhmer President International BIOTRONIK March 25, … · 2017-07-19 · 2010 vs. 2000 in % Share of pharmaceuticals and medical technology costs in 2010 in % of total

Christoph BöhmerPresident InternationalBIOTRONIKMarch 25, 2014

The end of the welfare state –The view of the European manufacturer

Christoph BöhmerPresident InternationalBIOTRONIKMarch 25, 2014

BIOTRONIK //

140325 EHRA Summit 2014

2

Introduction

Insurers : Reassuringly confident – or complacent?

Physicians: Running the rat race

Social Scientists: Many concepts, few proven solutions

Politicians: Always looking for the next populistic fix

Device Industry: Creative destruction: Chasing for the

next innovation

Patients: Looking for a cure, facing higher premiums



Headwind becomes stronger

Healthcare cost cutting seems to be dominant tool

All stakeholders started to adapt their strategies

Reinforce your presence at the gateways of future revenue streams


Demand for procedures still high – and increasing in countries with below average penetration

Therapy penetration in 2012 – EHRA member countriesin implantations per mil inhabitants

IPG: Displayed are only countries with available numbers for 2012, mean number of implantations is weighted by population (excluding AL, AZ, DZ, FI, LB, LY, MD, SY, TR, XK); ICD: Displayed are only countries with available numbers for 2012, mean number of implantations is weighted by population (excluding AL, AM, AZ, DZ, FI, LB, LY, MD, SY, TR, XK); CRT (CRT-D and CRT-P): CRT = CRT-P + CRT-D, Displayed are only countries with available numbers for 2012, mean number of implantations is weighted by population (excluding AL, AZ, DZ, LB, LY, MD, SY, TR, XK); Ablation: Displayed are only countries with available numbers for 2012, mean number of ablations is weighted by population (excluding AL, AZ, DZ, IL, IT, LB, LY, MD, SY, TR, XK)


EHRA White Book 2013

757 – 1,311608 - 756

<= 233not available

234 - 607

153 - 40487 - 152

not available

14 - 86<= 13

78 - 22154 - 77

<= 16not available

17 - 53

322 - 589178 - 321

<= 55not available

55 - 177

Ø Ablation rate* = 216

Ø ICD implant rate* = 96

Ø CRT implant rate* = 73

Ø IPG implant rate* = 556

Only latest available countries of the EHRA White Book 2013. Method: Countries clustered equally in quartiles via overall no. of available countries per analysis, *Ø implantation rates are weighted by population

According to the NICE standards for CRT, 37 EHRA-countries do not meet the targeted medical need

CRT therapy penetration 2012 – EHRA member countriesin implantations per million inhabitants

Only latest available countries of the EHRA White Book 2012 and 2011 with available data for both years. Excluded are Sweden, Kazakhstan, Morocco, Macedonia FYR, Egypt


EHRA White Book 2013

Lith

uani

aSer

bia

Gre

ece

Port

ugal

130 NICE target

Ukr

aine

Bel

arus

Bos

nia

& H

erze

govi

naArm

enia

Rus

sian

Fed

erat

ion

Spa

inEs

toni

aLu

xem

bour

gSlo

vaki

aIr

elan

dSan

Mar

ino

Sw

itzer

land

Slo

veni

aFi

nlan

dPo

land

Nor

way

Bel

gium

Mal

taH

unga

ryAus

tria

Uni

ted

Kin

gdom

Isra

elN

ethe

rlan

dsCze

ch R

epub

licFr

ance

131

Den

mar

kIt

aly

Ger

man

y

Icel

and

Latv

ia

Geo

rgia

Rom

ania

Cro

atia

Tuni

sia

Cyp

rus

Bul

garia

Mon

tene

gro

Medical need not met

145667713232528

29323539424552535359

6161626670

7273

77778389

107110118

124127

170

194

221

Car manufacturers experience willingness to pay for more value. The medical device industry does not.

Average prices 2007-2013 – Automotive vs. ICDs in Europein €

Automotive: Average selling price of average car, above inflation (1,4% p.a.); Source: Universität Duisburg; Infographik, Die WeltICD: Devices only Sources: (Europe): Eucomed Q4/2013; Europe = FR, AT, BE, CH, CZ, DE, DK, ES, FI, GB, GR, IE, IT, NL, NO, PL, PT, SE, TR


Cars ICDs

0

10.000

20.000

30.000

2010 2012

+6%x2

1980 20001990 2007 2013

-32%

While willingness to pay is decreasing, Industry is financing the health care sector with open receivables that peaked at ~1 billion € in 2012

Receivables of CRM-industry 2009-2013 – 10 core markets in Europein €m

Source: Receivables = unpaid sales; Assumptions based on internal analysis and market situation


2013

968

2012

975

2011

902

2010

896

2009

909

NLITGBESDECZCHBEATFRother

10 core markets in Europe representing

almost 90% of market

New technology that helps increasing efficiency will need longer to be brought to market due to new MDD

FDA review time is increasing

Incremental FDA approval time vs. CE-mark for MedTech products

Josh Makower, MD consulting Professor of medicine, Stanford University et al., FDA Impact on U.S. Medical Technology Innovation: A Survey of Over 200 Medical Technology Companies. November 2010


Source: The Boston Consulting Group: A comparison of the FDA and EU Approval Processes and their Impact on Patients and Industry, June 2012 Source: BIOTRONIK CRM market experience

European approval timesreaching FDA-level soonIn monthsExample: CRM products

47

38

0

10

20

30

40

50 +24%

2006-20112000-2005 CNUSJEU

LeadsIPG

NewMedical Device

Directive?

0

10

20

30

40

50

60

?

"The greater regulatory efficiency in the EU has not

sacrificedpatient safety!“

Prof. Josh Makower, Standford University

2010*







Annual average growth in GDP per capita (%)

European health care expenditures grew twice as much as the GDP since 2000

Annual growth in health expenditure and GDP 2000-2010

Annual average growth in health expenditure per capita (%)

Source: OECD health data 2012


x2x3x1

The first step to control health care expenditures focused on the infrastructure and suppliers. However device prices of 0 Euro, would not solve the problem

Source: OECD Health Data 2012 for EU


Cuts in infrastructure and resource consumption in hospitals2010 vs. 2000in %

Share of pharmaceuticals and medical technology costs in 2010in % of total

Total Discharges

TotalHospital beds

Total Lengthof stay

Average GDP per EU capita24.055 EUR

2,9

‐15,0 ‐16,0‐16

‐12

‐8

‐4

0

4

9

Driven byUse of less invasive surgical procedures,changes in hospital payment methods (DRGs), and theearly discharge programs

2

GDP = 100

Healthcare

Medical GoodsDevices Devices

Some cost cutting efforts have been successful

Reform targets and examples

Efficiency Evidence-based clinical pathways to

improve productivity Evidence-guided resource allocation and service provisions Increased Health Technology Assessment (HTA) Cost-containment Pay reductions or freezes Influencing patient behavior Prospective payment systems (DRGs) Introducing capped budgets for certain

technologies Increased attention to price-level of purchased

suppliesInsurer-driven quality improvements Pay-for-performance Selective contracting Insurers focusing on outcomes

Graph based on The Boston Consulting Group (2014) Competing on outcomes. Winning strategies for value-based health care. *3.2% of the payment are paid retroactively based on achieving certain outcome goals.


0%

20%

40%

60%

80%

100%

120%

Post-surgicalcomplications

Revisions

Control group OrthoChoice

Example: Pay-for-performance*

Hip replacements, Stockholm, Sweden

More focus on cost and therapy effectiveness to be expected due to ”avalanche” of healthcare evaluation agencies

Selected Health Economic Evaluation agencies in the EU

Source: http://www.eunethta.eu/contactus/all/356/allhttp://www.ispor.org/HTADirectory/Index.aspx


LBI-HTA BIQG

KCE

NCPHP NCPRMP

AAZ

MoH Cyprus

MoH Cz Rep SUKL

CRK DHMA DACEHTA

UTA

FIMEA THL STAKES

NSPH

ESKI EKMI GYEMSZI

HIQA

A. Gemelli Agenas AIFA Arsenàl.IT ASSR ORI Regione del Veneto Sihta UVT

NHS

VASPVT

IGSS CEM CMSS

DPA/MHEC

CVZ

NOKC

AHTAPol

INFARMED

NSPH MPD

MoHSlovak Republic

NIPH IER

AATRM / AIAQS

AETSA AQuAS AVALIA-t IACS ISC III Osteba SESCS UETS

SBU

SNHTA

IQWIG DIMDI

NICE

HAS

SMC

Even if convincing clinical and economical proof is available new technology reimbursement is not guaranteed

Case Report: Reimbursement of remote monitoring in CIEDs

First RM technology CE-mark 13 years ago

Clinical and economic evidence available from various RCTs plus economic modeling

Reimbursement efforts hindered by budget silos (inpatient vsoutpatient sector) and irrational incentive schemes


Remote Monitoring reimbursed







Countries are opening the healthcare market to more private investors

Trends in private health concepts

Source: HOPE – Hospitals in Europe Healthcare Data; OECD Health Data 2012; DeutscherKrankenhausreport 2014


Hospital ownership- Germanyin % of total

Private health insurance in % of total

Non-profit

Public

Private

0

20

40

60

80

100

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Belgium France Germany

> 32 % increase in number of private hospitals

Industry experts estimate private ownership to grow up to 50% in the next years (Roland Berger Consulting)

Citizens allover Europeincreasingly contract private

health insurance.

Private investors are expecting regular growth of profit-margins of up to 15%, considerable pressure on medical staff in these newly privatized clinics

Development Plan per Hospital after Acquisition


MedTech Industry investment in R&Din billion USD

0 0 0 0 0 0 00

3

6

9

12

15

2000 2002 2004 2006 2008 2010 2012 Trend

MedTech companies are balancing reduced revenue growth by – amongst others - reducing R&D investments

Source 2000-2012: Ernst & Young, Medical Technology Report 2013, company financial data (14 EU-based, 19 US-based); 2012-2014: BIOTRONIK estimation


R&D spending (actual) R&D spending assuming historic growth rates

If the historic growth rate has been sustained, these companies would have spent an additional US$12 billion on R&D between 2008 and 2012.

Average revenue growth p.a.

historic: 13 % recent: 7 %

-40%

Commercial factors increasingly drive purchasing decisions. Get involved!

Level of relevance:


low medium high very high

University hospitals

Innovation Leaders

Public hospitals

Volume Leaders

Private hospitals

Profitability LeadersArea of co-operation

(Hospital & Industry)

Pre-clinical research

Scientific co-operation

Clinical studies

Training & Education

Remote Monitoring

EHR-Integration

Economical studies

Reimbursement

Risk sharing

Hospital marketing

E-commerce

Logistics & process management

Economic

focus

Medical

focus

Decision-making power on medical products moved away fromphysicians to economics-driven stakeholders –Even the “empowered” patient does not change this trend

Decision impact on medical products

140325 EHRA Summit 2014140325 EHRA Summit 20142121

Physican

Hospital purchasingdepartments

Medicalfocus

Economicfocus

2000

+ Health politics+ Health insurances+ HTA institutes+ Group Purchasing Organisations

today

+ Patient

„Who can bring back the balance?“

Physican

medical economical

today

+ Patient+ Health politics+ Health insurances+ HTA institutes+ Group Purchasing Organizations

All business partners need to re-prioritize their focus areas and re-direct their focus …

Current EHRA Committee sizes

Source: EHRA website; URL: http://www.escardio.org/communities/EHRA/about/Pages/committees.aspx; March 10, 2014


Congress ScientificProgram

61

Health Economics

6

„Answer: All of us!“





Reinforce your presence at the gateways of future revenue

streams


Obviously health care bodies are beefing up. Are you?


Be present at the gateway to future revenue-streams

Be physically present where decisions about your economic future are being made

Obviously health care bodies are beefing up. Are you? Challenge us and work with us on projects with economical optimization scope

EHRA level Higher priority

health economic issues and processes

Influence HTAs Better „sell“

medical need for innovation to politicians and payers


Be present at the

gateway to future

revenue-streams

Be physically present where

decisions about your economic future are

being made

Individual level Understand and influence

purchasing processes in own hospital

Cooperate with industry on projects geared towards cost reduction

Focus more on the efficient implementation of innovations than on generating more research results

We have a central location with lots of free. Available until 20xx ! All of Europe easy to reach from 29 €/flight


Change the way you “run” the rat race…

The end of the welfare state –Conclusion

We all have to convince governments and tax payers (you and I!) that their money is well-spent when you use it to treat your patients

To do that, EHRA and ESC need to leave paradise (here!) and literally sit on the steps of every single building that houses institutions that make decisions on healthcare funding

This takes Credibility of those making the argument

->therefore constructive participation in political hygene processessuch as the various sunshine activities is needed

Substance to the argument, i.e., hot air will not suffice-> therefore your involvement, but more importantly, full-time

dedicated, and capable professionals who do that for you, are needed

Focus on productivity increases by using productivity-enhancing innovation

Skill in “playing” the healthcare economics systems to implement all of the above


Documents

Christoph Böhmer President International BIOTRONIK March 25, … · 2017-07-19 · 2010 vs. 2000 in % Share of pharmaceuticals and medical technology costs in 2010 in % of total