Don’t just focus on FDA, think of CMS too

Don’t spend all your time early on focused on getting market approval from the U.S. Food and Drug Administration.

Spare a thought about coverage issues and that other determiner of market success: the Centers for Medicare & Medicaid Services.

That was the advice of panelists Thursday at a morning session of the IBF MedTech Investing Conference in Minneapolis.

Many times reimbursement officials in a company have to contend with the product development side who say, “Don’t screw up my timing with the FDA,” said Gary Goetzke, director of reimbursement at wound healing company Celleration based in Eden Prairie, Minnesota.

But ultimately that is the wrong strategy. Goetzke said this is more of a problem for companies seeking 510(k) approvals, where they “don’t have a strategy for payment” partly because they may not have had trials on a Medicare population. That is something CMS wants prior to making coverage decisions.

Goetzke and other panelists advised that companies developing therapies need to think of getting an FDA approval and Medicare coverage as almost parallel processes, or very closely following one another.

“FDA approval is necessary but not sufficient to gain Medicare coverage,” said Richard Baer, medical director at Emerson Consultants, a Minnetonka, Minnesota-based consulting company that provides reimbursement expertise, clinical research, regulatory affairs and marketing strategies.

The panel also discussed the possibility of one day having one trial satisfy the dual needs of the two “masters” who determine the fates of medical device firms. Certainly there appears to be talk of cooperation between the two agencies, but the consensus seemed to be that medical technology companies would be wasting their time hoping for one clinical trial to satisfy both agencies because they have very different mandates.

While the FDA is focused on safety, CMS seeks to see if a product is medically necessary, Baer said. Those are two separate things entirely.

Panelists recommended corresponding early in the product development cycle with both agencies to develop a clear and crisp plan for clinical and economic value propositions.

“Don’t get drawn into a long, back-and-forth discussion trying to design a perfect trial,” said Dan Schultz, senior vice president, medical devices and combination products at Washington, D.C.-based consulting firm Greenleaf Health. “I don’t think you will ever be able to start that trial.”

And Schultz, who said talk of cooperation between the agencies is not new, should know. Between 2004 and 2009, he was director of the Center for Devices and Radiological Health at the FDA.