Introduction 

Recent positive changes at the Food and Drug Administration (FDA) have resulted in timely regulatory approvals of Medical Devices in the United States (U.S.). Significant improvements in the predictability of regulatory timelines have in recent years made the U.S. when compared with Europe, the destination of choice to launch new and novel medical devices. Combined with the massive U.S. population of 334 million, it’s now a no-brainer. 

Previously, many U.S. companies started their clinical work outside the United States (OUS), specifically in Europe, particularly, for high-risk devices as the regulatory requirements were less onerous than the FDA Premarket approval (PMA) process. The European process was seen as faster and more straightforward from a regulatory perspective, thus providing significant benefits for MedTech innovators with limited time and investment to prove their innovations and show their value to stakeholders, including providers, patients, and investors. 

The European Union (EU) in 2017 introduced new regulations for medical devices: Regulation (EU) 2017/745 (MDR) and Regulation (EU 2017/746 (IVDR). These two regulations have significantly raised the level of scrutiny on medical devices and subsequently have turned this region into a less desirable place to go to gain fast regulatory approval. The new legislation has caused significant delays and created uncertainties in the market, resulting in less innovation in the near term and delaying the adoption of meaningful technologies. In the long term, these regulations will extend the time it takes for patients to see the benefits of novel technologies. 

Although the U.S. regulatory processes and commercial opportunities allow significant opportunities for MedTech innovators, one of the most prominent hurdles is navigating the complex reimbursement landscape. Developing a successful reimbursement strategy is critical for European medical device companies to achieve market access and success in the US healthcare market. This white paper explores the importance of reimbursement strategies for European medical device companies when entering the U.S. healthcare market. It will also consider those same companies for entering the UK Market. 

The U.S. Healthcare Market and Reimbursement Landscape 

The U.S. healthcare market is the largest in the world, with healthcare spending accounting for more than 17% of its gross domestic product (GDP) in 2019. However, the healthcare ecosystem in the U.S. is highly fragmented, with multiple payers and reimbursement systems. Medicare, Medicaid, and private, commercial health insurance are the three primary sources of healthcare reimbursement for providers in the U.S. 

Dissimilar to the EU, the reimbursement landscape in the U.S. is complex, with multiple agencies and organizations involved in the process. The Centers for Medicare and Medicaid Services (CMS) is responsible for setting base reimbursement rates for Medicare and Medicaid, while private, commercial health insurance companies set their reimbursement rates. There are multiple medical code sets, overseen by various organizations and based on product type and care setting. 

MedTech innovators entering the U.S. must plan early and understand their commercial strategy, inclusive of a robust reimbursement strategy, and understand how their technology will be used and paid for. This is critical for European medical device companies to achieve market access and success in the U.S. healthcare market. Here are some reasons why: 

1. Market Access: In the U.S. healthcare market, reimbursement is a critical factor in determining whether a medical device will be paid for and covered (determined to be medically necessary or reasonable and necessary) by Medicare, Medicaid, and private, commercial health insurance companies. Without adequate reimbursement, European medical device companies may struggle to gain market access and achieve commercial success. 
2. Pricing Strategy: Developing an appropriate pricing strategy is an essential part of a successful reimbursement plan. European medical device companies must ensure that their pricing is competitive and representative of the technology’s value to the relevant stakeholders. Factors to consider are competitor pricing, pricing, and true costs, charges, and reimbursement for the current standard of care, perspectives and pressure tests with the buyer, reimbursement rates set by Medicare, Medicaid, and commercial, private health insurance companies. 
3. Regulatory Strategy: It’s important to understand the implications of the regulatory strategy and its impact on the reimbursement strategy. For example, if a MedTech innovator seeks and receives Breakthrough Device Designation for its device, there are certain reimbursement benefits that should be considered and which impact pricing assumptions and evidentiary requirements. 
4. Competitive Advantage: Developing a successful reimbursement strategy can provide European medical device companies with a competitive advantage. Companies that partner with PRIA Healthcare can navigate the reimbursement landscape and achieve adequate reimbursement, gaining a foothold in the U.S. healthcare market, which can be difficult for competitors to replicate. 
5. Long-Term Success: A successful reimbursement strategy is critical for both short and long-term success in the U.S. healthcare market. Executing a successful reimbursement strategy is an iterative process, subject to evolving payment and policy changes. PRIA’s mission is to accelerate the adoption of innovation by advocating for consistent and reliable reimbursement. PRIA has helped over 100 medical device companies and 30,000 patients gain access to new technologies – successfully monetizing innovative treatments agnostic to medical specialty. 

 

It’s not all doom and gloom in the EU, specifically in the UK. There are several good reasons to consider the UK at the top of the list for OUS international expansion. 

The UK Competent Authority, the Medicines, and Healthcare Products Regulatory Agency (MHRA) recently expressed a desire for a different regulatory model that will incorporate an expedited approval pathway for devices previously approved by trusted regulatory partners from other parts of the World, such as U.S., Europe, and Japan. 

Furthermore, in June 2023, the MHRA announced it is setting up a new regulatory pathway that will enable developers of innovative medical devices to receive integrated regulatory and market access input intended to bring technologies “to the forefront of the National Health Service.” 

Companies that use the Innovative Devices Access Pathway (IDAP) will receive “a multi-partner support service including targeted scientific advice” from MHRA, the National Institute for Health and Care Excellence, Health Technology Wales, and Scottish Health Technology Group, set out the goals of the pathway. “With the extra funding over the next two years, the MHRA will put in place the quickest, simplest regulatory approval in the world for companies seeking rapid market access.” (Source: UK Government 15th March 2023)

For startup companies, the UK remains an attractive destination for the following reasons: 

• Compared to the EU (MDR), Less regulatory scrutiny (MDD) 
• Compared to the EU, faster time to market, hence earlier start to revenue generation 
• Post Market Surveillance (PMS) data from the UK market could be leveraged for 
• regulatory submissions in other geographies e.g., EU, USA, Japan, etc. 

UK Reimbursement Considerations 

The UK has a single-payer system with the National Health Service (NHS), compared to multiple payers, which makes the UK a far simpler place to do business, especially when real-world data collected on each patient is collected and stored centrally for the benefit of researching patient pathways. Data exists where you can see the individual hospitals waiting lists across treatments, diagnoses, and specialties, as well as historical activity, allowing researchers to pinpoint exactly where opportunities are to make a positive difference. 

 

This in turn benefits MedTech innovators by establishing the value for the problem their technology solves, essentially proving the unmet need vs. the product features and benefits, resulting in operational gains for the hospitals.  The NHS rate of day cases (ambulatory, office-based, outpatient) has always been very high, and over the past few decades, minimally invasive treatments have been quickly adopted due to the extra financial backing of NHS England’s MedTech Funding Mandate scheme. 

 

From a pure reimbursement perspective, the NHS reimbursement system pays for treatments and procedures using a simple coding system using ICD-10 codes, procedure codes that lead to a payment code like other DRG systems. However, there are no specific product codes, so if your technology is described or used in the procedure then it’s typically already covered, unlike some countries where a specific product code may be required, such as in the U.S. or Australia. 

 

The other benefit of the UK is if your technology is positively evaluated by one of the world’s most recognized Health Technology Assessment (HTA) bodies- the National Institute for Health and Care Excellence (NICE). Positive assessments by NICE have led to has led to positive coverage in the U.S. for >250m covered lives with BCBS plans. 

 

Where can MedTech innovators go for reimbursement assistance in the U.S. or EU? 

The reimbursement process can be lengthy, with many steps involved, including regulatory approval, clinical trials, and coverage determinations. PRIA Healthcare, a vital and trusted partner to over 100 medical device companies, has a 10-year record of success supporting innovators in implementing market access and reimbursement strategy. www.PRIAHealthcare.com 

Our partner Device Access UK, based in England has been supporting USA MedTech companies for over 13 years and have managed to get over 50 of these technologies Nationally recommended by the Health Technology Assessment Body (NICE). Their team includes experts in Health Economics and Market Access with decades of experience. (www.deviceaccess.co.uk) 

Conclusion 

Developing a successful reimbursement strategy early is critical for European medical device companies to achieve market access and success in the U.S. The U.S. healthcare landscape is highly fragmented, with multiple payers and reimbursement methods, making the barrier of entry complex and challenging to navigate. European medical device companies must develop pricing strategies and gain a competitive advantage to achieve success in the U.S. healthcare market. 

Co-Authored By:

 Tonya Dowd, MPH – Executive Vice President, PRIA Healthcare

 Michael Branagan-Harris – Founder & Chief Executive Office, Device Access UK 

Marie Austin – Marketing Manager, PRIA Healthcare