Differences in Drugs and Devices and Implications for Reimbursement in Australia

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In Australia, the implantable medical device market has had some tough times over the past couple of years. However, most of the uncertainty regarding pricing has been largely resolved with the signing of the Prostheses List Agreement between the Medical Technology Association of Australia (MTAA) and the Australian Government. This gives some certainty to suppliers of implantable devices in Australia for a few years and Australia remains a desirable market for medical device manufacturers. The only risk to this certainty is a change of government at the next Federal election. The election must be held before May 18, 2019.

While stability is certainly desirable, there continues to be a lack of recognition of the realities of selling and supporting a medical device. Despite many years of industry efforts to educate payers, government and consumers, institutions within Australia have failed to truly acknowledge that researching, developing, distributing and selling a medical device is fundamentally different to performing the same functions for a pharmaceutical.

To those in the medical device industry, the differences between drugs and devices are well known.

  • A pharmaceutical is either injected, infused or swallowed in most cases. This does not usually require specific training for each drug. Devices must be surgically, implanted, applied, inserted into the body via catheters or else deployed by other means. Unlike drugs, there is a learning curve, skills must be acquired specific to the device and the performance in many cases is dependent on the skill of the health professional who is using the device.
  • Use of a drug does not require the support of a pharmaceutical technician, engineer or other representatives to deliver the drug. In many cases, devices cannot be used without technical support from the manufacturer. The MTAA has released an excellent video that demonstrates the complexity of support required for pacemakers and defibrillators, not just at implantation, but through the life of the device.
  • While pharmaceutical companies certainly provide training, many device companies must train each and every user of a device so that they can ensure that the device is used safely.

The main Health Technology Assessment (HTA) agency for new technologies is the Medical Services Advisory Committee (MSAC). While MSAC acknowledges differences in devices, the guidelines for assessment are almost indistinguishable from those for pharmaceuticals. The Prostheses List Advisory Committee also acknowledges that there are additional costs in distributing a device, however, their opaque health economic assessment processes make it impossible to know if these are truly taken into account.

The Prostheses List arrangements are under review and it is anticipated that there will be improvement in transparency through reforms in the next few years. MSAC, however shows little sign of truly implementing more pragmatic assessment of medical technologies, however the process is relatively transparent.

Help button-Quick Call-Brandwood BiomedicalNeed to get paid? Of course you do!  We are expert in preparing Prostheses List applications and other reimbursement submissions both in Australia and internationally. Don’t delay –  Contact us for a free, no obligation discussion.
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