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Healthcare Business News

FDA task force aims to solve lag between device approval and reimbursement

By Virgil Dickson
Posted: December 19, 2013 - 7:30 pm ET

The Food and Drug Administration is looking to shorten the time medical-device manufacturers wait before health plans will pay for products after they're approved.

The newly formed Medical Device Reimbursement Task Force will create a formal process that allows a device company to request a pre-submission meeting with FDA staff and one or more private payers. The agency intends to launch a pilot program next year.

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“We recognize that the mere fact the FDA approves or clears a device is not equivalent with patients getting access to that device,” Murray Sheldon, associate director of technology and innovation at the FDA, said Thursday. The initiative was discussed during a public workshop addressing the regulation and reimbursement of minimally invasive procedures and medical devices that treat morbid obesity and other metabolic diseases.

The FDA has taken steps to accelerate its reviews in response to complaints from the industry that devicemakers and investors are shifting their money and attention overseas, where they can get products to market faster.

Now the agency wants to address a second issue. The industry and venture capitalists also complain that reimbursement for innovative medical devices is inconsistent at critical times, such as during clinical studies or immediately following FDA approval.

The proposed meetings would bring together devicemakers, regulators and insurance companies before clinical trials or before a product is formally submitted for review. The aim would be to give the device company a better idea of what evidence the payers want to see before agreeing to reimbursement.

“Earlier engagement, way before a device is approved, is really important so everyone can be on the same page as to what the value is and what value will be brought” to the healthcare system, said Gregory Daniel, managing director for evidence development and innovation at the Engelberg Center for Health Care Reform at the Brookings Institution and a former vice president at HealthCore, a research subsidiary of insurer WellPoint.

A representative the from the Advanced Medical Technology Association declined to comment, and requests for comment to America's Health Insurance Plans were not returned.

The FDA already has a similar pilot program, launched in 2011, that allows devicemakers to ask the CMS to review a product for Medicare coverage at the same time FDA is reviewing it for approval. On Tuesday the two agencies announced the pilot program would continue through 2015 (PDF).

Sheldon, however, noted that the structure of that program presents “a significant problem.” The CMS doesn't look at the clinical evidence for a device until right before the FDA makes its approval decision. As a result, he said, the CMS in some instances has asked for new evidence too late in the process to ensure timely reimbursement by the agency.

Sheldon also said the new effort to coordinate reviews with private payers could yield an unintended consequence: the process of bringing a product to market may become entangled in meeting the needs of insurance companies in addition to the government's.

Follow Virgil Dickson on Twitter: @MHvdickson

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