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August 17, 2021updated 09 Aug 2021 4:31pm

Will CMS reimburse the cost of innovation in medical devices?

A new programme will allow breakthrough-designated devices in the US to receive reimbursement immediately after approval.

By Abi Millar

Medical device regulation can often be a delicate balancing act. On one hand, you need to be absolutely scrupulous if you want to ensure that devices are safe for patients to use. If the approval process is rushed, you may endanger the very people the devices are designed to help.  

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On the other hand, unnecessarily tight controls, or protracted approval timelines, can be dangerous in their own right. Through holding up approval, you may be depriving patients of a life-changing – or life-saving – innovation. 

It’s a common story and one that has come to the fore yet again with the decision to delay the new Medicare Coverage of Innovative Technologies (MCIT) rule. This rule, originally slated to come into effect in March 2021, was subsequently postponed till May and again till December – a decision some have compared to ‘kicking the can down the road’. 

The rule would have enabled Medicare beneficiaries to use ‘breakthrough’ medical devices – i.e., innovative new technologies that have been authorised through the FDA’s Breakthrough Devices Program. Critics have expressed concerns about these devices’ suitability for Medicare patients, who are often over 65 and living with disabilities. 

“Guaranteeing coverage for all breakthrough devices receiving market-authorization for any Medicare patient—with possibly minimal or no evidence on the Medicare population and no requirement to develop evidence on the Medicare population—could be problematic in ensuring these devices are demonstrating value and do not have additional risks for Medicare beneficiaries,” said officials from Health and Human Services (HHS). 

Others, however, have expressed deep frustration about the delay and have argued that MCIT could help alleviate health inequalities.

“I believe that MCIT has the potential to impact the lives of many patients, particularly those living in rural areas,” said one cardiologist in the public comments. “The promise of MCIT is the promise that emerging technologies built on strong evidence can suture our healthcare fabric together.” 

What the rule is meant to achieve

To give some context to the debate: when getting a new medical device to market, manufacturers have to jump through a number of regulatory hoops. For those who wish to market their devices in the US, the first and most important is FDA approval. 

While this is typically quite a byzantine process, the FDA launched its Breakthrough Devices Program in 2016, with a view to speeding up approvals in certain cases. It can be used where the device meets an urgent need, and patients lack an equally good alternative. 

As of March this year, manufacturers can also now apply for the FDA Safer Technology Program (STeP). This speeds up patient access to devices targeting less serious conditions. 

Although US manufacturers have welcomed these initiatives, they remain keenly aware that FDA approval is only one piece of the regulatory puzzle. Getting their device on the market is all well and good, but if the manufacturers want the whole patient population to benefit, they also need to obtain reimbursement approval from the Centers for Medicare & Medicaid Services (CMS). This will ensure the 44 million Medicare beneficiaries (15% of the US population) have access. 

The new MCIT rule, which was proposed by CMS last year and finalised in January, would mean breakthrough device makers could receive CMS reimbursement on the same day they received FDA market authorisation. 

Medicare would cover its use nationally for four years. If at that point, the device makers had generated enough clinical data, they would be able to apply for permanent coverage. 

Patient safety group ECRI has warned that MCIT will remove the incentive for manufacturers to conduct further safety trials. However, the four-year time limit is meant to provide exactly such an incentive.

“Generally, the MCIT pathway is intended to provide national, rather than local, Medicare coverage for eligible medical devices,” explains Thomas Miller, life science lead at Nixon Gwilt Law. “The pathway is greatly meant to smooth over the existing New Technology Add-on Payment (NTAP) programme, which is lengthy and can lead to long coverage delays and adoption of innovative technology.” 

Innovation versus regulation

The issue, explains Miller, is that clearance through the FDA’s breakthrough device process doesn’t specifically mean the device is safe or effective for Medicare patients. Whereas the existing NTAP rule gives CMS its own opportunity to analyse the evidence, the MCIT rule does not provide that level of flexibility. 

“This is a problem that could harm patients and cost the Medicare program untold amounts of money on potentially ineffective – albeit innovative – products,” he points out. 

On the other hand, the FDA’s own review process is undoubtedly rigorous. What’s more, physicians are under no obligation to use a breakthrough device, even if Medicare reimburses it – it simply gives them additional options. 

Writing in the public comments solicited by CMS, dozens of patients and doctors lent their support to the rule, arguing that physicians should be empowered to analyse the evidence and make decisions for use based on patient needs. 

“It’s disheartening that I have to temper my expectations with regard to any new, life-changing technologies because it’s usually a decade before I can get Medicare to pay for these products if I’m ever able to get coverage for them,” wrote one 68-year-old man living with multiple health conditions.

Miller believes that the current administration was right to delay the rule, giving it time to work through some of the potential impacts. That said, he thinks we will see it revived with a bit more clarity and some additional safeguards. 

“I do not think that delaying the rule serves the public, and eventually innovators, more than pushing the current program forward,” he says.

In the meantime, he remarks that the number of technologies impacted is actually rather small. Fewer than 400 devices have been granted FDA breakthrough status to date, with smaller numbers receiving the designation every year. The device in question also needs to fall into an existing Medicare coverage category, which many of these technologies do not.

“While the opportunities created by this reimbursement program are exciting for manufacturers looking to get strong market share at launch, the programme is only designed to provide access to products on the cutting edge of innovation,” says Miller.

It remains to be seen whether the rule will indeed come into effect in December, or whether there will be further delays. With strong views on either side, the MCIT delay is a classic example of the age-old tussle between innovation and regulation. 

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Medical Device Industry Landscape In Asia-Pacific

GlobalData's APAC Medical Devices Industry Landscape – 2022 free study breaks down the APAC medical devices market by segment and region and includes insights on local and global competitors, pipeline product developments, clinical trials studies, and significant deals in the industry. The APAC medical device industry witnessed significant developments, launches, implementations, and adoption of new medical device technologies in the past decade, however the high cost of devices, regulatory hurdles, reimbursement pressure, and healthcare budget constraints have challenged market expansion across various territories and segments. APAC is the fastest growing regional market for medical device clinical trials, with China and Japan emerging as major clinical trial hotspots. The growth in medical device clinical trials in the APAC region is attributed to an increase in research partnerships between biopharma companies and clinical research organizations (CROs). This report also provides an in-depth analysis of the medical device market's opportunities and challenges, the influence of COVID-19 on the market, and government activities aimed to develop the APAC medical device market.
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