Health Economics

Health Economics

MedTech Roadmap: gaining reimbursement in a changed market


With governments and health insurers cutting costs across Europe, it’s not an easy task for medical device manufacturers to gain reimbursement in their target markets. How they adapt to the current reality, to this changed market, will ultimately determine whether they succeed or fail


A reimbursement strategy should be one of the first steps a manufacturer makes in determining how to successfully market their device. Having a comprehensive reimbursement strategy early in the device’s development will likely mean that the device is not just available for use but is actually used, and used by patients who can most benefit from it.

However, these are challenging times for medical device manufacturers. As governments and health insurers try to cut costs, public hospitals are working with smaller budgets, while private ones are receiving lower reimbursements. This drive to save money is transforming the purchasing process, and how medical devices are bought and valued, and will ultimately determine reimbursement strategy, and how you go about getting payment.

As decision makers become more cost conscious and competition intensifies, there is greater demand than ever to deliver devices that are either low in cost and/or will significantly offset associated healthcare costs. As Michelle Jenks, Project Director at York Health Economics Consortium, explains, this new reality is especially true at a regional level.

‘It’s not just the cost of the device that the payers are concerned with, but its associated cost as well. At a local level, payers will be more interested in devices that can offset associated costs quickly. They’re not as likely to be as interested in devices that may prevent something in 10 or 20 years, because they’re not interested in saving money in the long term. They’re responsible for this year’s budget, and the year after, so they want to save money this year.’

There’s a huge onus on manufacturers to ensure that their devices are not only achieving regulatory approval, but that they’re both effective and value for money. More so now than ever, manufacturers need to prove their products value over competitors. In order to so, they need to provide evidence, both before and after approval. In Jenk’s opinion, manufacturers need to be able to demonstrate the efficacy of their device as soon as possible.

‘The threshold for regulatory approval is really, really low. All a manufacturer has to do is to show is that their device is safe. That doesn’t say much about how effective the device is. Gathering data and providing evidence, both before and after approval, is essential to demonstrate the efficacy of the device.’

The value of conducting clinical studies, of gathering data, of providing evidence cannot be underestimated. It’s not just about efficacy, it’s about demonstrating worth, as Jenks explains..

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‘A manufacturer needs to conduct a clinical study in order to compare their device to the competition, so that they can demonstrate their device’s additional benefits to decision makers. They need to provide evidence to support their claim- just taking their word for it isn’t enough. Using that evidence, they can undertake a cost analysis to demonstrate the added value that their device would bring.’

What’s more, a manufacturer is able to use such studies and cost analyses as leverage to get a better price for their device.

‘(cost analysis) can allow manufacturers to charge a higher price as the clinical evidence shows that the use of their device can offset costs. For example, one device might cost more than what’s already there, but it may significantly reduce an issue such as infections, and all the associated costs that come with it. They can use that as leverage to get a higher price.’

While the development of cutting-edge medical devices is of the utmost importance to public health, manufacturers need to be pragmatic. Governments will not likely cease their cost-cutting measures anytime soon, and healthcare authorities and insurers will continue to seek as much value for their money as possible. If a medical device manufacturer wants to survive, let alone thrive, they will need to develop an advanced reimbursement strategy that shows that their device, above all others, is the one that’s best both for the patient and the budget.


About the author

MedTech Engine’s Digital Content Editor, Chris previously wrote for several national newspapers, as well as some of the world’s largest brands. He also has a Master’s Degree in Philosophy and Political Science from Trinity College Dublin.

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