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