Australian Reimbursement

Transcription

1 Australian Reimbursement The true costs (and benefits) of market entry Hosted by Brandwood Biomedical 21 April [email protected] BRANDWOOD:BIOMEDICAL securing your compliance 1

2 BRANDWOOD:BIOMEDICAL securing your compliance 2

3 Australian Device Reimbursement: The true costs (and benefits) of Market Entry What you need to know 3

4 Australia and New Zealand 4

5 Australia Australia has a universal health coverage system known as Medicare Free public hospital system Subsidised pharmaceuticals Mixture of free and subsidised doctors visits 5

6 Public and Private Hospital Systems Almost half of all Australians have private health insurance More than half of all elective procedures are performed in private hospitals The Private Hospital system is a very important and lucrative market for medical device suppliers 6

7 Many Pathways Unlike regulatory approvals, medical device reimbursement does not follow a single pathway or deal with a single agency Medical device reimbursement can be extremely complex All agencies upping the ante in terms of clinical and economic evidence In some cases multiple strategies must be employed simultaneously 7

8 Three HTA Agencies Medical Services Advisory Committee (MSAC) Prostheses List Advisory Committee (PLAC) Pharmaceutical Benefits Advisory Committee (PBAC) 8

9 How to access the Private System Background The Australian Medicare system pays doctors to perform procedures in private hospitals Private Health Insurers pay both hospitals and doctors for procedures performed in private hospitals Insurers are only obliged to pay if the procedure is included on the Medical Benefits Schedule (MBS) 9

10 MSAC MSAC is the Medical Services Advisory Committee Advises the Minister of Health on the safety, effectiveness and cost effectiveness of new procedures MSAC recommends whether new procedures should be included on the MBS 10

11 Medical Benefits Schedule (MBS) A list of procedures for which Medicare will pay a benefit to Doctors or other health professionals Includes both in and out patient procedures Forms the basis of the Australian reimbursement system While the MBS has an uncapped budget, there is always a concerted effort by government to contain costs. 11

12 MSAC Applications An MSAC application is very complex and time consuming. Can take several years. Often are not successful Several stages Very bureaucratic and the final decision to fund a procedure can be very political 12

13 MSAC cont. MSAC makes a recommendations on safety, effectiveness and cost-effectiveness then the Department of Finance will determine whether the new procedure if affordable. Only then will a new procedure be included on the MBS 13

14 Evidence and Economic Requirements Evidence requirements have been adapted from the pharmaceutical world (PBS) often unrealistic in device world Preference is for meta-analysis of randomised controlled trials - often an impossible requirement in the real world A full economic model, that is completed to an extremely high standard A full budget impact analysis A submission will be subjected to an extremely rigorous critique 14

15 MSAC Application An MSAC application will require the services of a number of professionals, which may include a librarian, a statistician, and an economic modeler, and someone to represent your company to the Department of Health They are major undertakings that should not be entered into unless you are very confident of your clinical and economic evidence 15

16 New Procedures in the Private System Remember - Insurers are only obliged to pay if the procedure is included on the Medical Benefits Schedule (MBS) The MBS is how doctors get paid, but also underpins the AR-DRG system to some extent. If your device involves a new procedure than a new MBS number will be required. 16

17 Prostheses List List of medical devices used in surgical procedures for which health funds must pay a benefit in a private hospital Issued twice a year, February and August. Exhaustive and complex application and price setting procedure. Process is inherently biased towards health funds. Continuous downward pressure on benefits

18 Prostheses List Criteria Must have a ARTG number The procedure must happen in a hospital Must have an MBS item number for the procedure The product should: (a) be surgically implanted in the patient and be purposely designed in order to: (i) replace and anatomical part; or (ii) combat a pathological process; or (iii) modulate a physiological process 18

19 Is it a Prostheses? Prostheses Radio-active Beads Pacemakers and Implantable Defibrillators Stents Not a Prostheses Tissue markers for radio-therapy Cardiac ablation catheters Pressure Wires 19

20 Clinical & Economic Requirements Can claim substantial clinical equivalence with an already listed device fairly straight forward 2 years of clinical evidence for devices requiring durability, all high risk devices, mobile load bearing devices (arthroplasties) or new devices using novel technology or design If a device is considered novel or you would like a higher price must go through benefit validation. Information that is requested includes overseas pricing, cost of goods, public sector pricing, shipping costs Can also use conventional health economic analysis such as cost-minimisation, or cost utility/effectiveness 20

21 Assessment of Evidence Evidence is assessed by a panel of specialist physicians Very opaque process Inconsistent at best Often hard to get a straight answer as to why an application was rejected 21

22 Prostheses List cont. Inclusion on the Prostheses List is very valuable for medical device companies Guarantees a price for their device in private hospitals Doctors don t need to think about price when choosing a device. 22

23 Prostheses List cont. Prostheses List applications are very time constrained Should think about making a submission as soon as TGA submission is in Applications are more difficult if the device is novel or if a higher price is sought 23

24 Not a Prostheses? This can pose challenges for suppliers in the private sector Will depend upon the nature and the cost of the device Higher cost devices will have to demonstrate their economic and clinical benefits to the hospital Perverse economic incentives exist if competing with a Prostheses 24

25 Public System Devices can be sold into the public system as soon as they receive TGA registration However the public system is financed by Activity Based Funding (ABF) DRG funding This means that in order to be successful devices must be able to demonstrate their clinical and economic benefits Generally sell to public system by competitive tender Any device that is able to demonstrate improved clinical performance or a reduction in the use of resources should be able to be successful 25

26 New Technologies and Procedures No good system for accommodating new technology in Australia Some new technology grants in some states but competition is fierce AR-DRG system is clunky and takes about 6 years to release a new AR-DRG however no barrier to new technology in the public sector if you can get the hospital to pay for it. Catch 22 for new procedures - AR-DRG system is retrospective. Need evidence of use to create new AR-DRG 26

27 Cost Models Cost Models can be used by suppliers when no formal reimbursement is available Extremely useful for demonstrating value Very effective marketing tool Cost of developing the model can be recouped with minimal additional sales 27

28 Reimbursement Analysis and Strategy Advice It is always a good idea to get reimbursement advice before entering the market, particularly in Australia Sometimes your device may not be commercially feasible. A good deal of time and money can be saved by doing things correctly the first time. 28

29 THANK YOU 29