Common Mistakes Medical Device Manufacturers Make

Today’s economic healthcare environment has created overwhelming reimbursement challenges. The situation is frequently complex and the stakes are high. Companies need not wait for FDA approval before addressing reimbursement issues which they should begin early in the medical device’s development. Putting reimbursement on the back burner until after launch is way too late. Many companies develop unique medical devices with the expectation that issues such as coding, coverage and payment, the three pillars of reimbursement, will take care of themselves because their medical device has it all by offering life-changing benefits. This expectation often is the result of a company’s misconception that clinician and patient demands will force public and private payers to establish coverage for their medical device. Unfortunately, this almost never is the case.

It’s sad to say, but most medical device manufacturers who desire to bring their product to market quickly have no clue where to even begin obtaining reimbursement. Where a lot of companies go wrong, especially startups, is the belief they can do it themselves without the help of a reimbursement strategy consultant. While it will cost to engage outside help, adding this expertise to navigate the maze of insurance reimbursement may well be the difference between success and failure of your company. Remember, 85% of startups fail for this very reason.

Manufacturers must show clinical data on their own new medical device without using previously published studies conducted on a similar medical device. For approval, the FDA accepts showing safety and effectiveness using a placebo or sham procedure, but insurers want to see compelling clinical outcomes over and above what is currently considered the standard of care. That is why a prospective, multicenter, randomized controlled trial (RCT), preferably blinded, must be conducted to have the best chance of gaining coverage. Most times it is not the questionable results of outcomes data, but the trial design used to obtain the results is the reason for denial of coverage.

The most common mistake medical device manufacturers make is to conduct clinical trials they design themselves without a reimbursement consultant’s input. Such studies end up being totally inadequate to obtain coverage. Most other clinical study designs are usually not accepted by care providers and payers because, in their eyes, the results may be good, but the study design used to arrive at the results is significantly flawed by bias, making the results unreliable. It is a must to have an experienced bio-statistician very familiar with clinical trial structure and design perform a power analysis to determine the specific number of patients which should be enrolled to make the results statistically significant. While conducting clinical trials, it is important not only to generate the scientific evidence with unquestionable results, but also to gather economic data for a cost-effectiveness analysis.