Kuo Tong and Raj Stewart in Med Device Online
Many medical technology companies rely on securing payer coverage as a critical component toward achieving their revenue goals and realizing a return on investment on new products. Yet, few medtechs fully understand how to navigate the payer-coverage process, or how to fulfill its mercurial demands.
In the past 30 years, the only constant for medtechs seeking payer coverage has been the need for strong clinical evidence that a product does what the company says it will do, and provides a clinical benefit to the intended patient population. As a result, the only real control a medtech has rests in its own ability to articulate and prove the technology’s market value, while anticipating the myriad variations in coverage requirements.
In this no-guarantees payer-coverage industry, virtually everything — from stakeholders to priorities to standards for evidence — is subject to change. Medtechs must plan to be proactive and deploy layered strategies to shift the coverage odds in their favor.
Unlike one-payer system countries, such as Germany and Japan, the United States’ system is fragmented, which adds significant complexity to seeking and attaining coverage. In the U.S., each payer has individual and differential policies, processes, and personnel to evaluate products; and, each payer can opt to grant full, intermediate, or no coverage for the same or similar therapy options across different systems and regions. Even “me-too” and improved versions of existing products might not be awarded the same coverage as their predecessors. Insurance corporations might make different territory-by-territory decisions — for example, for the same treatment option, residents in one state might have different coverage than residents in another state.
Furthermore, with mergers, consolidations, contractors, and staff turnovers, the conversations medtech companies had with payer representatives as little as a year ago may no longer be relevant. Case in point: the Medicare administrative contractor for parts of the southeastern United States changed from Cahaba GBA to Palmetto GBA in early 2018, so medtech companies seeking coverage in that area now must work with a completely different stakeholder.
Considering all these factors, companies that conduct an objective assessment — especially one performed by a detached third party — tend to be best-positioned to seek and attain payer coverage.
The assessment should include a comprehensive evaluation of the product profile, provable market value, and potential barriers to gaining payer coverage, so strategies can be put in place to resolve any issues and seek appropriate coverage. The most common coverage barriers tend to be information gaps that also hinder market adoption, including:
Several other critical factors — all of which revolve around proving the safety, efficacy, and economic justification for a therapy option — can inhibit a technology’s market value and payer coverage opportunities. An objective assessment will provide insight into the probable outcomes of each potential strategy against commercial goals, including projected payer coverage profiles, opportunities to strengthen the product offering and its positioning, and secondary strategies (should an unexpected need to shift course arise).