October 27, 2014 at 6:11 am ET
If you’re in the medical device industry, you may have come away feeling down after the AdvaMed Convention in Chicago, IL earlier this month. Reimbursement and value-based payment trends are legitimate concerns for many manufacturers. And the Affordable Care Act-mandated 2.3% device excise tax is still on the books. See the bulleted list of trends at the end of this article – most of them do not bode well.
But perhaps the most impactful potential upcoming policy change could be positive for the industry. This is the “Breakthrough Pathway” for medical devices, an approach that would provide expedited FDA and CMS review for novel medical devices. Medical technology CEOs and the national trade group (AdvaMed) discussed a potential new breakthrough pathway, which could be included as part of the House of Representatives “21st Century Cures” initiative.
The biopharmaceutical industry has already seen success with its breakthrough pathway process (passed as a part of FDASIA of 2012, also known as the FDA user fee reauthorization). For example, Kalydeco, the first available drug that targets the defective protein responsible for cystic fibrosis, was approved last year after a lightning-quick three-month review for the 4% of people with cystic fibrosis who harbor a particular mutation in the G551D gene and are older than 6 years old.
The medical device industry is seeking to use pharma’s precedent with breakthrough pathway in order to improve the regulatory, coverage and reimbursement pathway specifically for life-saving and complicated medical devices. The key questions become: “How are life-saving devices defined?” and “Would CMS (Medicaid and Medicaid) reimbursement be automatic for devices approved through breakthrough pathway?”
While the details are in flux, here is a quick run-down of how breakthrough pathway could take shape.
Food and Drug Administration (FDA) breakthrough pathway could mean:
Center for Medicare and Medicaid Services (CMS) breakthrough pathway could mean:
The 21st Century Cures initiative would be the most obvious legislative vehicle for such a policy. Industry and other stakeholders are hopeful that the House and Senate can pass a life sciences-enhancing innovation package next year, but the 21st Century Cures ideas may bleed to 2016 or 2017, with 2017 being the deadline for Congress to approve the next FDA user fee reauthorization.
So why is a “win” on breakthrough pathway so important to the medical device industry right now? Let’s run down the list of major trends affecting the industry today:
In this age where payers, providers and the government are having to do more with less, all medical device manufacturers – large and small – have reason to be concerned. Without additional financial, approval and reimbursement incentives, medical technology innovation could be a thing of the past. So yes – the industry needs a “win” on breakthrough pathway.