2021 LS&HC Horizons - Flipbook - Page 69
Life Sciences and Health Care Horizons 2021
69
Speeding medical device approval and reimbursement
The Food and Drug Administration (FDA)
Breakthrough Devices Program, finalized
in 2018, continues to gain traction, with the
numbers of requests and devices granted this
designation steadily increasing. While the
benefits for the FDA clearance/approval process
are attractive, the primary driver seems to be the
reimbursement benefits, which are of substantial
interest to investors driving innovation.
The program is intended to speed development
and review of devices which provide for more
effective treatment/diagnosis of life-threatening
or irreversibly debilitating diseases or conditions.
Features of the program include increased
interaction with FDA, including mechanisms
for quicker interaction like Sprint Discussions,
and prioritization of the submission in the
review queue.
However, it is becoming apparent that FDA
cannot grant breakthrough status to all devices
which may be eligible, especially in review
groups where most devices would qualify (e.g.,
cardiovascular). Given the increased competition
to obtain breakthrough status, it is critical
that companies present their strongest case in
their application. Key considerations include
the timing of the breakthrough request in the
development program, and justification for
meeting the eligibility factors, especially showing
the device is reasonably expected to be “more
effective” than the standard of care.
Obtaining breakthrough device designation
has tangible benefits from a Medicare coverage
and payment perspective, and perhaps for
other payers. Under a recently issued Centers
for Medicare & Medicaid Services (CMS)
final rule, an FDA designated breakthrough
device is eligible for four years of national
Medicare coverage from the date of FDA
marketing authorization.
From a Medicare payment perspective, having
breakthrough designation makes it easier to
qualify for special, additional reimbursement.
Under Medicare’s inpatient hospital payment
system, hospitals may receive extra payment
for technologies that qualify for new technology
add-on payments (NTAP). An FDA designated
breakthrough device is deemed to meet the
most difficult two of the three criteria to qualify.
Similar, under the Medicare hospital outpatient
payment system, devices are eligible for separate
payment if they qualify for pass-through status.
Breakthrough designation means that the device
automatically meets the difficult “substantial
clinical improvement” criterion. Thus,
breakthrough designation facilitates the ability to
obtain these special additional payments.
Given these reimbursement benefits, we only
expect competition to increase for breakthrough
status in the coming years. For devices which
do not qualify for this program, there may
be an opportunity to qualify for FDA’s Safer
Technologies Program (SteP), which was
finalized in January 2021, for devices targeting
non-life-threatening conditions; however, there
are no similar reimbursement benefits for this
program.
Kristin Zielinski Duggan
Partner, Washington, D.C.
kristin.duggan@hoganlovells.com
Stuart Langbein
Partner, Washington, D.C.
stuart.langbein@hoganlovells.com
