The two “Rs” — regulatory and reimbursement — are critical elements of the environment in which a medical device product is developed. The design of innovative products in the highly regulated medical environment actually influence all stages of medical device development from the earliest stages of the development effort to its conclusion. Let’s first consider the regulatory impact on the product development process. While we’ll use the FDA as the example, virtually every other market in the world has some form of regulatory body that impacts the medical product development process. The FDA is responsible for protecting the public health by assuring the safety, efficacy and security of human biological products, medical devices, our nation’s food supply, cosmetics and products that emit radiation.
Medical devices are classified into three classes, increasing in regulatory control from Class I to Class III. Device classification depends upon the product’s intended use, indications for use, the risk to the patient. The FDA reviews device applications in one of two primary processes, the Premarket Notification 510(k) clearance and the Premarket Approval (PMA). In general, most Class I devices are exempt from the 510(k), while most Class II devices require 510(k) and most Class III devices require Premarket Approval (PMA). The 510(k) is a premarket submission to the FDA that the new device to be marketed in the U.S. is “substantially equivalent” to a predicate device already being legally marketed in the U.S.
Since Class III devices have a much higher risk, the FDA requires a PMA application to help assure the safety and effectiveness. A PMA requires significant support for device claims, typically requiring clinical trial data. In addition, manufacturers of the product must undergo a facility inspection by the FDA prior to the products’ clearance. While the impact of the regulatory process is felt throughout the development and manufacturing processes for the product, the immediate impact from a schedule perspective is that the targeted time to clearance for a 510(k) is approximately 90 days, while FDA regulations provide 180 days to review a PMA. The impact of any of these processes on your development effort needs to be considered at the beginning of the project as it ripples through everything.
The second of the two “Rs,” reimbursement, while having much less of an impact on the design and manufacturing processes is no less important to the overall success of your product introduction as it addresses a vital question: “Who pays for your product?” This requires data, discussion and negotiations by stakeholders, including the providers and payers. FDA approval, coding, coverage and payment are the four major components of the reimbursement process. Coverage is in the realm of the payers and describes the types of services and procedures which will be paid. These typically are those medical devices and procedures that are considered “medically reasonable and necessary.” Coverage can vary from plan to plan depending upon what each payer decides to cover.