Startups, Devices & Diagnostics

FDA launches pilot payer program to help mitigate coverage woes for medtech startups

To help medtech startups that often get FDA approval but have to wait eternally to win reimbursement, FDA has launched a pilot program with private payers that will give entrepreneurs early feedback on what payers need for coverage.

 

In the last few years, the ongoing complaint from players in the medical device industry – be they investors, startups or consultants – is that even if a novel product gets approved by the Food and Drug Administration, it may not automatically win insurance coverage.

So you jump over the regulatory hoop only to falter on the other “r” on your road to commercialization: reimbursement. However, with an announcement Wednesday, involving payers, the FDA is hoping to make the road a bit easier for entrepreneurs with innovative medtech products.

In a speech in Washington, D.C., Commissioner Scott Gottlieb revealed that a new, pilot Private Payor Program has launched with the likes of UnitedHealthcare whose goal is to provide medtech startups get early feedback from insurance companies about what data they need to win coverage. Gottlieb was speaking  at the annual public forum of the Medical Device Innovation Consortium and the text of the speech was posted to the agency’s website.

From FDA’s perspective it’s all about patient access to novel products, and it sees this new Private Payor Program as a conduit to expedite the commercialization of those medical devices. It’s also a sign that FDA — which used to be the bane of many device companies’ existence as they navigated the regulatory process and has since evolved to a valued partner of the industry — is continuing to take steps to listen to challenges the industry faces. And fulfill its role as the steward of public health.

Other than UnitedHealth, seven other private insurers and tech assessment groups have joined the pilot program — CareFirst BlueCross BlueShield, the BlueCross BlueShield Association, Duke Evidence Synthesis Group, the ECRI Institute, Humana, Kaiser Permanente, and the National Institute for Health and Care Excellence in the U.K.

Here’s an edited portion of how Gottlieb described the rationale for why the agency launched the pilot program:

As we modernize the medtech development process, and our tools for regulatory decision making, we’re seeing that more of the barriers to access and innovation are shifting from the pre-market process to the need for efficient coverage decisions.

I’m concerned about patients not having timely access to the latest advances in medical devices because of the complexity of getting coverage in place, and the cost of paying for new innovations…

Patients can face challenges while they wait for private insurers to make coverage and reimbursement decisions. That process can sometimes take months, or years.

These delays can reduce incentives to innovate. This is especially true when it comes to small, innovative medtech companies that can be idea rich, but cash poor. They’re not able to float themselves while they wait for long periods to gain market entry.

Now insurers have every right to demand good data to support their coverage decisions. And they have an obligation to be good stewards of the healthcare needs of their beneficiaries. Insurers should be careful how they cover new technology to make sure they’re getting the most healthcare bang for the premium money that their beneficiaries entrust them with.

But if there are steps that the FDA can take to make that coverage process more efficient, and to make sure payers have the data they need to enable efficient access to beneficial new technologies, we want to do our part to make these opportunities available. Access is a matter of public health. And by taking measure of these challenges, we believe there are ways that the FDA can better align our own regulatory processes to meet more of the needs of the broader marketplace.

So to help address these opportunities, the FDA has launched a Private Payor Program pilot as a voluntary opportunity for manufacturers to receive feedback from the FDA and other non-governmental health technology assessors and payors. The idea is to enable manufacturers to develop a more efficient evidence generation strategy during the FDA’s pre-submission meetings.

The announcement from FDA was well received by a Minnesota-based healthcare advocacy group with a large medical device membership base.

“We continue to be encouraged by Commissioner Gottlieb’s efforts to address the issue of increased access for healthcare consumers to the products and services they need,” said Shaye Mandle, President & CEO, the Medical Alley Association, in an email. “By including more opportunities for innovators to get early information on reimbursement options, we build stronger value models. We are moving closer to accomplishing a more comprehensive achievement of the triple aim.”

Photo: atibodyphoto/ Getty Images

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