Spreading the Risk

by James Cavuoto, editor

Neurotechnology researchers and manufacturers are well aware that clinical trials and the collection of evidence supporting a new therapy are important elements of the commercialization process. No one in this field would argue that advanced medical products, particularly implantable devices with sophisticated electronic components should be marketed without some degree of testing to ensure that the products are safe and do what they’re supposed to do.

The problem is that the testing process is not standard; different regulatory bodies in different locations have different rules for what procedures to follow and what standard of evidence is required. And once a new product is approved for sale, manufacturers often have to begin the testing process all over again to satisfy one or more payment organizations.

As we report in this issue, there have been several efforts to address the issue of redundant or conflicting approval processes from regulators and payers. These include the parallel review program between the FDA and CMS in the U.S., the ill-fated MCIT program, which would have guaranteed a national coverage determination for breakthrough devices once they got approved, and the current TCET idea being floated by CMS in its wake.

But even if these efforts prove successful, neurotech vendors will still face a plethora of different standards from various agencies and insurers. A case in point is the state of Washington, which stands out from the other 49 states by refusing to cover pain neuromodulation systems in its workers comp or Medicaid policies. What’s worse is that the state’s Health Care Authority appears to have no interest in engaging with clinicians or investigators with a different point of view or the or with any of the professional pain and rehabilitation societies that banded together to request relief.

Differences of opinion are becoming more commonplace in this country so it should not come as a surprise when two different experts or two different organizations looking at the same data reach dramatically different conclusions. Moreover, even if everyone agreed that a new neurotech product was safe and effective and also reasonable and necessary—the two somewhat arbitrary standards used by the FDA and CMS respectively—that doesn’t mean that there’s enough money in the system to reimburse clinicians and vendors who use the device.

An idea we’ve floated before is for the government to ask private insurers to step in and underwrite financial “trials” of a new therapy. If the new device or procedure ends up saving the insurer money over the long term when trialled with a subset of their ratepayers, then they could take their results to CMS so that the agency could roll it out on a national basis and thus save U.S. taxpayers a bundle. In return, the private payer would receive a spiff from the government in the form of a percentage—say 5 to 10%—of the actual cost savings the government realizes as a result of implementing the new therapy of procedure.

This would not only offer startups a source of revenue in the early stages of their commercialization, it would also alleviate the pressure on CMS to reflexively delay or disallow coverage for expensive new technology since they will already have assurance that the new therapy is not only reasonable and necessary, but cost-effective too.