5 Tips for the US MedTech Market Entry. #26 - 27

#26: Your validation plans and/or clinical trials need to include and validate all the attributes (Outcomes, Cost and Access) that you intend to claim.

#27: You might not have the customer intimacy and the experience (e.g. FDA and CMS) to make the relevant decision and trade-offs early in the product development cycle. Allocating extra budgets early in the design process to in-source or outsource this effort will give you a competitive edge when executing your U.S. market entry.

5 Tips for the US MedTech Market Entry. #21 to 25

#21: For new products and products under development, it is important to ensure that there is a good alignment between the “intent of use” declared in the label of the product and the 510(k) application and the description of the CPT code.

#22: Searching CMS’s Medical Coverage Database is the most relevant “next step” to perform to understand the relevance of a CPT or DME code of interest.

#23: The Medical Policies of large private payors are very useful resources to understand the reimbursement landscape for a specific disease condition.

#24: If a Technical Component is included in a CPT Physician fee, there is an opportunity to build an economic case to fund Medical Equipment.

#25: Choosing a segment of physicians to optimize the price of a technology must take into account the type of relationship that his/her practice might have with insurance companies (HMO/PPO/EPO and mix with Medicare).

5 Tips for the US MedTech Market Entry #16 to 20

#16: It is a best practice to initiate a constructive dialogue with FDA experts early in the process, and incorporate their advice and questions in the building of the submission. Pre-Submission meetings are ideal opportunities to discuss prospective regulatory plans.

#17: Timely and effective communications will help execute a successful submission.

#18: The focus of HIPAA-HITECH is to protect PHI “Protected Health Information”. There are 18 PHI identifiers.

#19: There are six steps to gain HIPAA-HITECH compliance:

- Perform a security Risk Assessment

- Establish a Quality Process and Procedures

- Establish a Software Development Process

- Deploy HIPAA-HITECH training

- Craft your own Business Associate Agreement

#20: The largest 125 U.S. health Insurers (out of a total of 12,000 players) collected $744 Billion in premiums, or 50% more than the global MedTech market forecasted for 2020. This is a huge industry. Do not assume you can deal with it without significant planning and effort.

Market Access for Health Technologies in the United States

 

By Mathieu Petitjean, Ph.D. [1] and Joe Camaratta, MBA [2]

The market for health technologies has been estimated at $336B (billion) in 2008. Il correspond au sens large à l'ensemble des technologies utilisées pour le diagnostique, les soins (équipement hospitalier et consommables) et l'instrumentation médicale ou biomédicale utilisées en milieu clinique (en recherche pharmaceutique ou en laboratoire par exemple). It corresponds broadly to all technologies used for diagnosis, care (hospital equipment and consumables) and the medical or biomedical instrumentation used in research settings (research pharmaceutical and diagnostic laboratories for example). Dans un contexte économique mondial difficile, certains segments de ce marché offrent des perspective de croissance extraordinaires, comme par exemple l'orthopédie ($13B à 13% 2 ), la neurostimulation ($2B à 18%) ou l'instrumentation et les prothèses cardiovasculaires  ($22M à 7%), les techniques d'imagerie fonctionnelle et de visualisation 3D ou l'informatique d'hôpital et la gestion de dossiers médicaux pour n'en citer que quelques uns. In a difficult global economic environment, some segments of this market offering extraordinary growth prospects, including: orthopedics ($13B with 13% annual growth) neurostimulation ($2B with 18% annual growth) and cardiovascular instrumentation and prostheses ($22B with 7% annual growth), functional imaging techniques and 3D visualization, and electronic medical records and healthcare IT[1].

This market is dominated by U.S. companies (14 of the top 25 medical technology companies are U.S. headquartered[2]), which alone generate more than 72% of the total, worldwide revenues in this industry. Therefore, it is important for European medical technology companies to develop a U.S. market strategy to achieve rapid revenue growth, and develop technology and commercial partnerships.

As with any local market, the U.S. has regulatory and reimbursement issues that must be proactively addressed in order to develop a profitable business.  It is strongly advised to develop a clear plan address these challenges before formally entering the market.  A successful plan will adequately address the following topics:

Clinical Value Proposition. The need for a strong clinical value proposition is often underestimated when positioning medical technology designed in Europe in the United States. En effet, et pour simplifier, on ne pratique pas la médecine aux Etats Unis de la même manière qu'en Europe. Nous laisserons aux spécialistes de soin de débattre ce fait. Since medicine is practiced differently in the United States than in Europe, U.S.-based Key Opinion Leaders (KOL’s) are required to validate the technology for clinical practice. En tant qu'entrepreneur, il est indispensable de valider la proposition de valeur d'une technologie « made in Europe » avec des spécialistes américains. Appropriate KOL’s should be identified at the beginning of the market entry process, and engaged through formal interview to develop the criteria for clinical and economic acceptance. These interviews also provide an opportunity to discuss plans for clinical assessment, FDA submission, and market penetration. Many European entrepreneur are surprised to learn that these clinical experts are also "business men" well-versed in the economic implications of a new technology. Ces KOLs peuvent être facilement identifiés grâce aux sociétés médicales aux Etats-Unis 4 . Appropriate KOL’s can be easily identified through medical societies in the United States[3]. A clinical assessment protocol to demonstrate the proposed clinical value proposition must be developed, and sites selected to execute the protocol and report results.

Regulatory Strategy. The Center for Devices and Radiological Health[4] (CDRH) is the part of the Food & Drug Administration (FDA) responsible to regulate access to the medical technology market (both hardware and software) in the U.S. Medical device companies are required to obtain either a Pre Market Notification 510(k) or Pre Market Approval (PMA) in order to market and sell their devices in the U.S. A detailed discussion of device classifications (class I, II or III) is beyond the scope of this article, however successful regulatory strategy will contain the following steps:

  • Establish a quality system that that includes key documents to be included in the submission file.[5]

  • Search for equivalent products already approved for sale in the U.S. to act as a “predicate” device for the new products. 

  • Develop and submit a clinical assessment protocol of new products simultaneously in the U.S. (pre-IDE) and Europe in order to incorporate U.S. regulatory requirements into the study protocol.

  • Explore the use of STED[6] (Summary of Technical Document) to harmonize the market entry process in the U.S. and European Union.

Economic Value Proposition / Reimbursement Strategy. The need for a strong economic value proposition is a fast-growing requirement for innovative medical technologies in the U.S.  When developing a successful economic value proposition, 2 factors must be considered: 1) reimbursement and 2) cost effectiveness studies.   Reimbursement is governed by CPT codes[7], and the identification and interpretation of these codes is required to establish a pricing policy. When no reimbursement is available, the economic value proposition must convince potential customers (physicians and administrators) that the new technology helps to improve patient outcomes and / or reduce costs.  Economic criteria (e.g. length of stay, procedure time, etc.) can be included in the clinical assessment protocol, or a separate cost effectiveness study can be developed.

Market Segmentation and Introduction Strategy. The healthcare market in the United States is very diverse consisting of hospitals, integrated delivery networks, free-standing surgery and imaging centers and physician offices. Clinical and economic value propositions must be tested against specific market segments, to determine the desirability on the technology for a specific customer group.  This approach will help focus efforts and resources, identify candidates for the Medical Advisory Board and potential clinical evaluation sites, and support the development of clinical and economic arguments to be used by the sales force. Also, a decision must be made on the optimal distribution channel: direct sales, distributors, or strategic partners (or a combination of the three). The introductory phase could last 12 to 24 months and must develop leaders to evangelize the adoption of the new technology by the medical community.

Even given the recent difficult economic conditions in the United States, medical technology (“MedTech”) remains an attractive industry. Beyond the usual obstacles that an European entrepreneur faces in building a business in the U.S., the introduction of medical technology must include a “calibration phase” that defines clinical and economic value propositions, and a comprehensive regulatory strategy including existing equivalent products (“predicates”). The calibration must also identify target market segments, Key Opinion Leaders and clinical evaluation sites in those segments, and a distribution strategy to reach those customers.  The market introduction strategy should recognize that the evangelization and adoption of new technology can take several years, and define actions to support this adoption. Entrepreneurs and investors that can develop a successful strategy to demonstrate superior clinical performance and cost effectiveness, will be rewarded with a quicker return on investment in the technology.


References

[1] Frost & Sullivan, 2008

[2] In order:  Johnson & Johnson (U.S.), General Electric (U.S.), Siemens (Germany), Medtronic (U.S.), Baxter International (U.S.), Covidien (Ireland), Philips (the Netherlands),  Roche (Switzerland), Becton Dickenson (U.S.), Abbott Labs (U.S.), Stryker (U.S.), Cardinal Health (U.S.), Olympus (Japan), 3M Healthcare (U.S.), Zimmer (U.S.), St. Jude Medical (U.S.), Smith & Nephew (U.S.), Beckman Coulter (U.S.), Synthes (U.S.)

[3] A list of U.S. medical societies can be found at: www.americanhospitals.com/resources/medicalassns.htm

[4] See www.fda.gov/cdrh for further information.

[5] FDA, Center for Devices and Radiological Health, Design Control Guidance for Medical Device Manufacturers.

[6] For further information: http://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/HowtoMarketYourDevice/PremarketSubmissions/SummaryTechnicalDocumentSTEDPilotProgram/

[7] See https://catalog.ama-assn.org/Catalog/cpt/cpt_search.jsp?_requestid=583573

About the Authors

[1] Mathieu Petitjean, ESPCI Engineer and Doctor of Science, is Advisor for the Foreign Trade Office of France, specializing  in health technologies. In the United States for over ten years, he has had several roles at executive roles at General Electric Healthcare in several international markets. He now leads MedNest, LLC (www.mednest.com), which he founded in 2007. Contact: mathieu.petitjean@mednest.com

[2] Joe Camaratta has extensive international experience in medical imaging and healthcare IT. He held several executive roles for Siemens Healthcare (both in the U.S. and Germany) and most recently was a Senior Vice President for a firm that develops and manufactures innovative surgical instruments. Contact: joe.camaratta@mednest.com  


What are IND-Enabling Technologies and the related market opportunities?

About Enabling Technologies.

In general terms, an enabling technology is an invention or innovation, that can be applied to drive radical change in the capabilities of a user or culture. Enabling technologies are characterized by rapid development of subsequent derivative technologies, often in diverse fields.

In the field of Drug discovery and Pharmaceutical Development enabling technologies are poised to accelerate the discovery of new therapeutic compounds and significantly reduce time to market and safety profiles.

Why Focus on IND?

The United States Food and Drug Administration's Investigational New Drug (IND) program is the means by which a pharmaceutical company obtains permission to ship an experimental drug across state lines (usually to clinical investigators) before a marketing application for the drug has been approved. The FDA reviews the IND application for safety to assure that research subjects will not be subjected to unreasonable risk. If the application is cleared, the candidate drug usually enters a Phase 1 clinical trial.

In short, IND is the key milestone prior to testing drug candidates on humans.

 

The IND application to FDA must contain information in three broad areas:

Animal Pharmacology and Toxicology Studies - Preclinical data to permit an assessment as to whether the product is reasonably safe for initial testing in humans. Also included are any previous experience with the drug in humans (often foreign use).

Chemistry and Manufacturing Information - Information pertaining to the chemical composition, manufacturing methods, stability, and controls used for manufacturing the drug substance and the drug product. The chemical stability and activity of the product must also have been tested. This information is assessed to ensure that the company can adequately produce and supply consistent and active batches of the drug.

Clinical Protocols and Investigator Information - Detailed protocols for proposed clinical studies to assess whether the initial-phase trials will expose subjects to unnecessary risks. Information on the qualifications of clinical investigatorsprofessionals (generally physicians) who oversee the administration of the experimental compoundto assess whether they are qualified to fulfill their clinical trial duties. Finally, commitments to obtain informed consent from the research subjects, to obtain review of the study by an institutional review board (IRB), and to adhere to the investigational new drug regulations.

An IND must also include an Investigator's Brochure which is a document intended to educate the trial investigators of the significant facts about the trial drug they need to know to conduct their clinical trial with the least hazard to the subjects or patients who will be enrolled.

How will technologies transform the current paradigm?

Innovative technologies and services have the potential to redefine the workflows, quality and cost structure of the efforts dedicated by pharmaceutical companies and biotechnology companies to more Drug candidates from a leadconcept to an IND by disrupting conventional and generally accepted process to:

  • Perform Animal Pharmacology and Toxicology Studies,

  • Develop Compound Chemistry Technologies and Manufacturing processes

  • Develop Clinical Protocols, with increased Investigator and Patient participation

  • Create innovative ways to execute clinical trials while increasing the protection of the subject involved.

There is an increasing amount of innovative technologies around the world that have the potential to enable major improvements in the way these macro-processes are planned and executed. But these technologies are often captive of their local ecosystems and markets and are the victim of slow adoption. In addition, large distances and cultural gaps slow down their adoption, even is the world of technology is become more and more transparent.

Most often, the lack of availability of relevant leadership teams, at the right time, is the key reason why promising technologies do not harvest the success that they deserve. Pertinent and creative business model may be as well one of the manor root causes of failure.

Some examples of IND-Enabling Technologies

As an illustration, here is a selection of IND-Enabling technologies developed/supported by MedNest for the US markets:

Fluofarma: Bioengineering, BioScreening, BioComputing Services

Creapharm: Formulation, packaging, clinical trial supplies of Cytotoxic compounds

Disposable Lab: Single-Use BioManufacturing of High Potency Compounds

GemacBio: Custom Molecular Engineering Services for Small Molecule Antibodies

LLTECH: Non Destructive 2D-3D Digital Pathology Imaging for Tissue and Stem Cells

Atoxigen: substitute technologies for ADME Tox on Zebra Fish and propritary Imaging

ITEC Services: Full service CRO specialized in respiratory studies

MARS-CT: a multispectrum Spectroscopic CE scanner for small Animals

How will MedNest change the game

We believe that the demand for IND-enabling technologies and services (with unique IP) is just emerging and we  want to embrace this change and contribute to the acceleration of their adoption in the US. Headquartered in Princeton, NJ, in the heart of the biggest Pharmaceutical and Biotechnology ecosystem in the word, we are in the front row of this transformation.

Last, our team offer a unique combination of highly experienced scientists and commercial leaders. We understand the needs of the industry, of their technical buyers and procurement leaders. Whereas the technologies that we are taking to market will be used in-house or as-a-serviceby pharmaceutical users, PharmaNest will offer a very consultative and scientific sales processfocused on the development of relevant applications and value creation.

We are eager to be a new player in the industry and are looking forward to sharing growth with our clients and partners.

Mathieu Petitjean, Ph.D, President, MedNest

5 Tips for the US MedTech Market Entry #11 to #15

#11: When possible, the technological characteristics of your product must be designed to optimize the FDA “Substantial Equivalence” definition to support a 501(k) application.

#12: Software is becoming an important element of every medical device. Do not forget to discuss the Level of Concern of your software and related validation and 510k documentation requirements very early in the design process.

#13: Under CLIA, laboratories performing only waived tests are subject to minimal regulation. Laboratories performing moderate or high complexity tests are subject to specific laboratory standards governing certification, personnel, proficiency testing, patient test management, quality assurance, quality control, and inspections.

#14: FDA registration fees need to be paid annually, for a September-to-September period. Foreign Small Businesses can apply for an FDA’s Small Business Certification that yields to significant (50% to 70%) “Discounts” for user fees (e.g. 510Kk) fees

#15: FDA “agents” should not be confused with “commercial agents” or Custom/export brokers. An FDA Agent is an operational liaison to FDA and can be appointed in the U.S. or retained as part of dedicated services providers for $50 to $150 per month.

Part 3: Readiness of Medical Technologies for the U.S. Markets: Designing for CMS.

US market entry plans must include a proven and documented value proposition that address the new needs of the U.S. Healthcare market – improvement of clinical and workflow related outcomes, reduction of cost, and the improvement of access to care – while optimizing the regulatory pathways (FDA ) and reimbursement plans (CMS coding,  payer’s coverage and payment), which is discussed in this Part 3.

5 Tips for the US MedTech Market Entry #6 to #10

#6: The shift to capitated reimbursement with performance incentives is inevitable. A substantiating and true economic rationale for your medical technology will be a competitive differentiator.

#7: The continuum of care between acute care and independent care is highly complex: every market segment is characterized by a specific business model and unmet needs. Do to target them all at the same time.

#8: The delivery of care for aging citizens will happen in multiple set-ups. Each of them could possibly represent multi-million opportunities for your products or services, as long as you gain an intimate knowledge of each individual segment and tailor effective go-to-market channels for each of them. Strategic Segmentation is crucial to success.

#9: Digital Health is easy. Digital Medicine is the next revolution. It will be regulated, complex and an environment ripe for breakthroughs: do not confuse them.

#10: 21CFR is the 21st chapter of the Code of Federal Regulations. It describes the rules of the Food and Drug Administration, and is in fact the perfect reference handbook. Sub-Chapter H (Part 800 to 898) deals with medical devices in several therapeutic areas (Cardiovascular, hematology and Pathology, neurological, etc...) It is updated once a year

Part 2: Readiness of Medical Technologies for the U.S. Markets: Designing for FDA

US market entry plans must include a proven and documented value proposition that address the new needs of the U.S. Healthcare market – improvement of clinical and workflow related outcomes, reduction of cost, and the improvement of access to care – while optimizing the regulatory pathways (FDA only is discussed in part 2) and reimbursement plans (CMS coding,  payer’s coverage and payment - see part 3). Because all these dimensions are interconnected, a sequential approach is often counterproductive: all need to be addressed and optimized at the same time.

What Is Clinical Utility and Why Should We Care?

Broadly speaking, utility is a measure of the personal benefit that someone has from an intervention, outcome, product, or process. “Clinical utility” is a term that is widely used in medicine to describe the relevance and usefulness of an intervention in patient care .

Who Cares? and Why ? are probably the most fundamental questions that MedNest asks to its clients from oversees, … often perceived as disturbing questions! Simply said, stakeholders in healthcare want to know the benefits offered by a novel medical technology are valid and useful in the context of the U.S. Healthcare practice.

The question of evidence generation to support clinical utility is key, as the clinical utility of a medical device or a medical software solution (for instance) is often context-dependent.

When it comes to diagnostics, “Clinical utility refers to… the value of information to the person being tested. If a test has utility, it means that the results provide information that is of the value to the person, because he or she can use the information to seek an effective treatment or preventive strategy. Even if no intervention are available to treat or prevent a disease, there may be benefits associated with knowledge of a results” [1].

There is an obvious link between clinical utility and intended use, which ties the “value proposition” with the FDA regulatory pathways. This important relationship is often misunderstood by foreign MedTech companies resulting in significant mistakes in the definition of product concepts and their related regulatory pathways. MedNest’s programs address these important questions to reduce the risk and cost of a U.S. Market entry plan.

Reference

[1] What Is Clinical Utility and Why Should We Care?Larry Lesko, I Zineh, S-M Huang December 2010 Clinical Pharmacology & Therapeutics 88(6):729-33 DOI:  10.1038/clpt.2010.229 - Weblink / ResearchGate

U.S. Reimbursement Exploration: Essential activities

Understanding Coding, Coverage and Payment options for your Medical Device is an essential activity to prepare the U.S. Market entry of Medical Technologies. We believe it is also critical at very early stages of product development.

MedNest offers a affordable “Reimbursement Exploration” program to educate companies on the U.S. Reimbursement and Payment Models and establish their optimized options for Reimbursement Coding, Payment and related product Pricing. Workflow Economic benefits will be discussed if relevant.

The program generally includes the following:

1. Audit the Company’s product and solutions, and existing pricing rationales

2. Deliver a personalized U.S. REIMBURSEMENT and PAYMENT consultation to address specific needs of each companies, with topics including

  • Present a tailored overview of the U.S. Healthcare Payer-Provider system (e.g.. what is relevant to the product at hand only)

  • Present and discuss the different insurance and payer models and segments, including HMO, PPO, POS…

  • Present and explain the MEDICARE and other federal programs

  • Discuss, if relevant, the emergence of ACOs

  • Discuss the fundamentals of reimbursement codes ( DRGs, PACs, ICD-10 Diag and Procedures, CPT, DME…)

  • Explain the coverage decision by insurance companies, and / or MEDICAIRE

  • Payment values, and how they vary from state, insurer, and federal program

  • About Economic outcomes research and trials

3. Research of most relevant codes applicable to the company‘s products

4. Research of payment values related to the selected codes (MEDICAIRE, and possibly other payers)

5. Work with Company to establish a pricing model based on reimbursement.

5. Preliminary exploration on additional economic benefits/outcomes (Workflow, Material, Labor..)

6. Preliminary recommendations on how to demonstrate/prove the additional economic benefits

7. Final report and proposed preliminary reimbursement, payment and economic value strategy.

  • Summary of most relevant reimbursement codes

  • Summary of payment values for such codes (how much $)

  • Preliminary product pricing model waterfall

  • About marketing reimbursement codes to end user

  • Recommendation on additional economic outcomes

  • Need (and preliminary recommendation if applicable) of economic studies/trials

 

Timing? A typical exploration project takes 2 months

Budgets? The typical budget of the exploration ranges from $5,000 to $10,000. Developing a comprehensive economic model / reimbursement plan can be scope after the exploration program

Tips for the US MedTech Market Entry #1 to 5

#1: To be successful in the U.S., your medical technology needs to address all three major pain points of the U.S. healthcare system: reduce cost of care, improve outcomes while reducing their variance, and increase access to care.

#2: If you can’t prove them, don’t talk about them (i.e. your product’s benefits)!

#3: Incorporate Value-Based Care Specifications into your new product concept proposals or upcoming product revisions.

#4: If you are a “New Entrant”, beef up your team with experts in your target healthcare segments, including physicians and experts from the payor systems.

#5: The U.S. represents 41% of European Medical Technology Exports, more than Japan, China, Russia, Canada, Brazil combined. Stay focused.

Part 1: Readiness of Medical Technologies for the U.S. Markets: Designing for the Markets

Garnering the attention of U.S. policy makers, investors and innovators, is the U.S. Medical Device market reached $160 billions in 2018 growing ~6.4% annually since 2015[i]. It represents a small fraction of the total U.S. Healthcare spend of $2.8 trillion and, as a result, is directly impacted by the evolving forces and regulations that aim to curb the cost of Healthcare in the U.S. To be relevant and competitive in this evolving market, and in order to optimize the return on capital[ii] of “MedTech” ventures or new product introductions, leadership teams need to approach the U.S. market with plans that are more targeted and comprehensive than in the past.