Pulse of the industry
Creating a framework for future medtech innovation
An interview with Nadim Yared, Chairman of AdvaMed and President and Chief Executive Officer of CVRx.
EY: How are shifting definitions of value changing medtech’s approach to developing evidence?
Yared: Health care systems in the US and worldwide are undergoing tremendous change, driven primarily by the twin imperatives to keep costs down while providing more and better quality care for patients.
The challenge for the medical technology industry is that there are numerous health care stakeholders — patients, providers, payers, innovators, etc. — demanding value, but there is no consensus definition of what value is.
Determining how value is assessed and what evidence is needed to support a value claim will be a critical issue in the near term. If we don’t get this right, medical innovation — and the patient and societal benefits it generates — could be jeopardized.
AdvaMed has attempted to address this challenge by developing our Value Frameworks. These frameworks, one for medical devices and one for diagnostics, are designed to provide stakeholders across the health care spectrum with an approach to objectively determine the value of a medical technology or diagnostic test and the evidence needed to support its use.
The frameworks provide a comprehensive approach for assessing value based on four key “value drivers”: clinical impact, non-clinical patient impact, care delivery revenue and cost impact, and patient/population impact.
These frameworks encourage each stakeholder to view the value of medical technologies and diagnostic tests from a broad perspective. They are also intended to be a guide to the kinds of evidence that medtech developers should consider generating to demonstrate the benefit of a technology to other stakeholders.
The important thing is that the frameworks are not designed as a “one-size-fits-all” formula. They are intended to be flexible, promoting the understanding that technologies will offer value in different ways under the frameworks’ value drivers.
EY: How will these value frameworks reduce uncertainty and promote medtech innovation?
Yared: The constant, iterative approach to innovation and its reliance on evolving physician skills and experience raise some challenging issues when trying to assess value. Both factors require adjustments to evidence development approaches and, often, smaller studies.
Value analyses, especially as providers and payers move into more risk-based payment models, must allow for appropriate types of evidence development and be flexible enough to adjust for different time frames and iterative changes in technologies.
The vast range of what we refer to as medical technology is also a factor. Frameworks need to be flexible enough to account for that range. For example, diagnostic technologies, which may or may not directly influence a patient outcome, are distinct from other technologies. This is why AdvaMed developed a separate diagnostic value framework that takes into account specific considerations based on the test being evaluated. They are blueprints that will help guide companies’ data collection and funding strategies. The frameworks can be used from the very beginning of the development process to guide the value proposition, drive evidence needs and ultimately provide a path for delivering value across multiple stakeholders.
EY: How is this changing definition of value affecting medtech business models?
Yared: Medical technology companies are being challenged to do more and more. Previously, it was sufficient to produce an innovative technology and get it to a physician or hospital. Now medtech companies are looking to be partners with providers and payers to help them manage patients across the continuum of care.
Many companies in our space are stepping up to this challenge, providing services and expertise that complement and enhance their technology offerings. This speaks to the dynamic, innovative nature of our industry and how we are uniquely positioned to partner with stakeholders for greater efficiencies and improved outcomes.
In addition to dedicated medical, clinical and quality specialists, companies have health care economists, reimbursement specialists, data analysts and others who can also help physicians and health systems deliver better patient care.
For such partnerships to work, however, all stakeholders must be willing to look beyond their traditional roles and collaborate in new ways. Government watchdogs will also need to rethink traditional anti-kickback rules that limit how medtech companies can partner with health care providers.
We need to define innovation more broadly to include how medtech companies partner with all stakeholders to develop solutions that enhance care and benefit the overall health care system.
EY: What is AdvaMed’s response to new, non-traditional companies developing medical technologies?
Yared: We created AdvaMed Digital last year as an essential resource for digital health companies and traditional medtechs. It is also a key stakeholder in shaping the policy environment for this emerging area of health care.
Digital technologies will only achieve their potential for patients and health care systems if public policies are in place that promote innovation along with patient safety. At the same time, these digital companies, many of which have never before marketed health care products, will only succeed if they understand the various regulatory and reimbursement requirements — many of which are still being developed.
Of course, it is not only new or non-traditional companies that are part of the digital health revolution. Companies such as Medtronic, Boston Scientific and Johnson & Johnson are all very active in this space, and they benefit from being part of AdvaMed Digital as well.
There are so many challenging issues in this space. By bringing together the new entrants and the more traditional players, both groups benefit from hearing different perspectives and can help craft policy positions that foster innovation, not inhibit it.