New obstacles in the path of marketing new medical devices.

Abstract

Approval of a new medical device's safety and effectiveness by the Food and Drug Administration (FDA) is only one step in the typical device's passage into the marketplace. A review of 10 new Class II and III devices found an average of 62 months elapsing between the beginning of FDA-approved clinical trials and the device's final approval for general marketing. However, FDA marketing approval does not mean a new device can be sold because, for many new devices, the Health Care Financing Administration (HCFA) requests a technology assessment from the Office of Health Technology Assessment (OHTA) in order to determine whether the device's use is "reasonable and necessary" and thus appropriate for Medicare payment. The Medicare decision often guides other third parties. OHTA assessments of 93 devices and procedures required an average of 26 months to complete; of 16 FDA-approved Class III devices, OHTA reported to HCFA that insufficient data existed to recommend coverage for 12 (75 percent). Under the Medicare prospective payment system (PPS) for hospital care, a third step has been added to the process, consideration by the Prospective Payment Assessment Commission (ProPAC) and HCFA of the new device's impact on PPS payment rates. Further, under recent legislation, OHTA is mandated also to consider a device's cost effectiveness. Duplicative reviews of new devices should be eliminated, and until they are, medical equipment developers must recognize that delays and conflicting payment rulings may have serious impacts on the ability to market a new device.