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Evolving Practices in the Assessment of Medical DevicesAn Industry PerspectiveAdrian Griffin | April 2016
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The Medical Device Sector in Context
Pharma Industry
Medical DeviceIndustry
ProductsRel. Prop. of HC spend Companies
Systems spend roughly 2x as much on drugs than devices
The FDA approved 1,453 drugs (to Dec ‘13) - EUCOMED reports more than 500,000 medical devices
Innovative drug industry dominated by large & medium companies - MedTech comprised mainly of SMEs: EUCOMED report >25,000
Life of a branded medicine can be ~8-12 years – Commercial lifecycle of a device ~2-3 years
REALITY for Devices:More products; shorter ROI window; chasing less HC spend
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Complexity of Medical Device PathwaysIn Europe, and elsewhere
Regulatory Always
HTA Sometimes
Reimbursement More often by procedure (DRG)
Procurement Local not national
Context of HTA in Decision-MakingPharmaceuticals compared with Medical Devices
Pharmaceuticals Medical Devices
WHY Inform Pricing or Reimbursement
No ‘routine’ Reimbursement Decision
WHEN ASAP after Regulatory Approval Varies
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Recognising the differences in HTA application between drugs and devices
Regulatory Approval Regulatory Approval
Reimbursement Reimbursement
Coverage (DRG)
National Contract Local procurement
Regional Contract
Coverage (DRG)
Local procurement
HTA HTA
Local HTA
Hospital HTA
Local procurementLocal procurement
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HTA influence
Procurement influence
Disconnect between evaluator and purchaser (1)Challenges with Traditional HTA of Devices
Price falls on old technology as
suppliers compete for
smaller market
Price difference between old and
new increases, so relative value of Innovation falls
Traditional HTA methods suggest
disinvestment from new
technology
HTA puts downward pressure on price of
innovation, so relative C-E improves against
old technology
Innovative Technology
assessed by HTA as clinically and cost effective
Innovation replaces older
technology; “disinvestment” from old to new
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Disconnect between evaluator and purchaser (2)Challenges with Evidence Extrapolation
• HTA seeks to evaluate all technologies by the methods / rigor applied to drugs– Demand evidence of value before adoption; seek certainty of benefit & value
• But users procure devices like commodities;– Demand discounts, price/volume agreements, low barriers to entry for competition
– Guaranteed ‘exclusivity’ period• 5 years data exclusivity in US• 10 years in Europe• ‘Me-too’ products (not generics) have to
cross similar evidence hurdle
– Provides opportunity for return on innovation • Eco-system incentivises evidence
generation
Pharmaceuticals
– There is no “data exclusivity” • Innovator generates evidence for payer• Purchasers take evidence from the first
entry and extrapolates to class• ‘Me-too’ products have lower hurdle -
drive competition on price
– First mover disincentive• Eco-system undermines the incentive for
evidence generation
Devices
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Opportunities
• Redefine procurement– Value based, rather than price– BCG/EUCOMED project underway
• Support use of local (hospital) HTA where decisions are made– European AdHopHTA project
• Recognise evidentiary contexts– Devices - Outcomes often accrue after use– Drugs – outcomes often accrue during use
• So routes to evidence may well (logically) differ
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Examples of Change
• Medtronic
• Biosense Webster (J&J)
• St Jude Medical
• Tyrx Mesh sleeve for cardiac Implants: Medtronic to cover cost of infections if infection rate is not lowered compared with rate in procedures without it
• Thermocool catheter for AF: discount on devices used in a repeat procedure if a patient initially treated with those products returns within a year
• Quadra heart rhythm device: %age rebate for a device if revision surgery is needed in the first year after implant due to problems with the company’s Quartet lead wire
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Thank You