Comparative Effectiveness Hits Medical Devices

Article preview from Medtech Insight- May, 2010

Converging provider, payor and regulatory forces are making comparative effectiveness and evidence of value top priority issues for device companies. This article was excerpted from the March 2010 issue of In Vivo.

Comparative Effectiveness Hits Medical Devices

Article preview from Medtech Insight- May, 2010

The global economic crisis and the ever rising share of global output spent on health care products and services have pushed governments and payors to critically examine the value they are receiving for their health care dollar. This trend has prominently played out for over a decade in pharmaceuticals, where the large global bill (>$600 billion) and the availability of low-cost alternatives (generic versions of highly effective blockbuster medications from the 1990s) provide national health systems and large payors with ample incentive to examine their medical spend. In its simplest form this has played out as generic substitution: the automatic replacement of a branded medication with a cheap, generic equivalent. In more complex forms this takes the form of comparative effectiveness calculations: quantifying the incremental benefit created by a branded drug vs another branded or generic drug, a device, or a procedure—whether in terms of efficacy (eg, reduced mortality), safety (eg, lower liver toxicity), convenience (eg, once-a-day dosing), or downstream cost savings (eg, reduced hospitalizations)—and then using this calculation to shape drug coverage and reimbursement policies.

Historically, medical device companies have largely escaped this scrutiny. The reasons are diverse: medical products represent a smaller share of the health care spend (~$200 billion); this spend is spread across a much broader and diverse range of products, with few individual products that can compare to blockbuster branded drugs; and product development cycle times are very rapid compared to pharma (18 vs 120 months), thus making it more difficult to study the comparative effectiveness of an individual product. Furthermore, device companies have historically enjoyed streamlined regulatory pathways in the US (through the 510(k) process) and Europe (by obtaining CE mark approval), whereby fairly sophisticated devices (eg, coated orthopedic implants, hemodialysis devices) can secure marketing approval with only rudimentary clinical evidence if they are able to claim material similarity to a predicate device. However, the situation for device companies is changing.

- John Lin, MD, Howard Horn and Jake Henry  

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