AdvaMed touts comparatively low price increases

Medical technology companies are defending the prices of the products they sell at a time when the prices of medical products, drugs and supplies are increasingly under scrutiny.

The Advanced Medical Technology Association, a trade group representing medical technology manufacturers, on Tuesday issued a study that found the prices of medical devices and in-vitro diagnostics rose at an annual rate of 1% over 22 years. AdvaMed compared the annual growth rate of these products to that of the medical care consumer price index (4.6%) and the medical care services consumer price index (4.9%) from 1989 to 2011.

“The findings further make the case that medical technology is not the driver of healthcare costs, as some critics wrongly claim, and that our industry is very price competitive,” said Don May, AdvaMed's executive vice president for payment and healthcare delivery policy.

The study found that spending on medical technology rose slightly during the same time period, from 5.3% of national health expenditures in 1989 to 5.9% in 2011. The U.S. medical technology market, which includes everything from hearing aids to pacemakers, is roughly $160 billion.

Implantable devices are some of the most costly medical supplies that hospitals purchase. Faced with declining reimbursement and patient volume, many hospitals have implemented strategies in recent years to help them negotiate better prices on these devices. Those negotiations can be complicated by manufacturers that often require hospitals to sign “gag clauses” preventing them from comparing the prices they get on devices with what other healthcare providers receive.

Sen. Angus King (I-Maine) in May filed an amendment to the tax relief bill that would allow HHS to collect and publicize median prices of medical devices. The amendment would also ban confidentiality agreements between manufacturers and hospitals. The tax relief bill also includes language to repeal the medical device excise tax, which stems from a provision in the Patient Protection and Affordable Care Act and has been aggressively fought by the device industry.

“It is very difficult to spend money wisely if prices and comparative prices and prices of your various components of the healthcare system are kept secret,” King said during remarks on the Senate floor.

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