EU Market Overview Parson Q1 Dec 2010
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1 Overview of EU Medical Device Market Environment Bob Parson Vice President Pharmacoeconomics & Outcomes Research Alere, Inc. 2nd Annual European Medical Device Reimbursement Workshop
description
Overview of Medical Device Markets in EU and Reimbursement
Transcript of EU Market Overview Parson Q1 Dec 2010
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Overview of EU Medical Device Market Environment
Bob Parson
Vice President
Pharmacoeconomics & Outcomes Research
Alere, Inc.
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Agenda
Examine current status of the EU markets
Establishing main differences between US and EU markets
Anticipating changing landscape due to economic changes
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Major EU Markets
The five largest medical device markets in Western Europe:
Germany, France, UK, Italy, Spain
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Major EU Medical Device Markets
Like all other sectors, the medical device markets will continue to be impacted by the global economic recession in the short term.
Global economic changes will have a major impact on domestic manufacturing industries where the demand for exports are sizable.
The economic downturn has lead to a strain on government health spending as has increasing health costs, aging populations.
Widening gap between health care costs and funding causing regulation of prices and capping of budgets.
Forecasts indicate that beyond the current recession, Western Europe is expected to return to growth with leading markets averaging compounded annual growth rate (CAGR) of 5.4% to 2014
(Euromonitor International)
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Medical Devices Market: Forecast for Growth
Region 2009 2010 2011 2012 2013
Americas 102.4 107.1 112.1 117.4 122.8
Asia / Pacific 42.5 46.1 49.9 54.3 58.9
Central / E Europe 10.3 11.3 12.4 13.6 14.8
M East / Africa 5.7 6.0 6.3 6.7 7.0
Western Europe 62.3 66.7 71.6 76.9 82.5
Total 223.2 237.2 252.3 268.9 286.0
Source: Medical Market Fact Book 2008
In Billions USD
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EU Market Overview
Proving that a medical device is safe by conforming to the European Medical Devices Directive (93/42/EEC) and affixing the CE mark used to be the only pre-requisite to marketing in Europe.
Now, governments want to ensure that they are getting „value for their money‟ and are assessing the cost effectiveness of treatments before agreeing to pay for them. In some European countries, treatments are not even allowed on a private basis unless they have government approval.
This approval is obtained through some form of Health Technology Assessment (HTA). Increasingly, a medical device has to be associated with an approved treatment appearing on an official „reimbursement‟ list before it can be sold to healthcare providers in a particular country.
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Regulatory Approval Enables Market Access
US FDA-”Approval”
Relatively higher hurdles
(510k or PMA)
Reimbursement not
guaranteed, can be a very
lengthy process
Manufacturer can set a
target price upon approval
Post market studies may
be required
EU: CE Mark
CE Mark requires lower
hurdles
Country specific market
access and payment
Pricing variations are
common, but can be
controlled
Greater rewards for
innovation and early entry
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EU Market Overview
Medical devices need to be associated with a coded reimbursable medical procedure in each geographic market within the country.
In Italy and Spain, reimbursement lists are regional and for some medical devices, achieving reimbursement will require negotiations with individual hospitals.
In Germany, the situation is much less complex and the systems and procedures more advanced. However, this does not stop the process from taking years, on an average.
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French Market Access Pathway for Medical Device
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Source: ISPOR Website
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Reimbursement Process: France
French Pricing & Reimbursement (PR) process for medical devices
Source: ISPOR Website
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Reimbursement Process: France
Source: ISPOR Website
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Germany Health Care System
Insurance based Health Care System: statutory duty to insure all residents, e.g., “individual mandate”
90% are enrolled in public, non-profit health insurance funds (more than 250)
One standard list of benefits for all insured, also as statutory basic tariff in private health insurances
Free choice of
Health insurance
Tariffs (standard with free choice of provider; PPO, HMO, primary care)
Regulations to ensure quality and contain costs.
Source: Federal Ministry of Health
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Reimbursement Process: Germany
DECISION MAKERS AND DECISION-MAKING PROCESSES DIAGRAM
Source: ISPOR Website
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Markets within Markets
There has been a strong growth in imports across western Europe accounting for around 80% of the market. Trade between EU dominates the import market, and companies wanting to exploit the full potential of major European countries need to ensure an effective marketing and distribution network.
Critical factors affecting the market‟s growth potential are changes in the regulatory environment and governmental measures such as spending controls on medical devices.
The significant increase in an aging patient population,
along with an increasing chronic disease patients will keep the demand for medical devices and equipment maintained.
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Factors Affecting Medical Device Market Growth
The mature and high value medical device markets in Western
Europe are well established and capable to integrating new technology. There are increasing pressures on governmental regulators and private insurers attempting to contain health costs and a desire to remain at the forefront of technological innovation, hospitals will need to invest in new medical equipment and technologies to maintain this high standard of care.
In addition, healthcare services will need to become more efficient in order to cope with financial pressures and the needs of ageing populations. There will be an increased demand for efficiencies, for example, medical devices that facilitate minimally invasive surgery, which can increase the number of operations performed in day surgery and ensure a faster turnaround of patients. Despite recessionary pressures, market growth rates over the coming years will be positive.
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Overview on Provider Payment Methods
• Primary Health Care:
• Input-based line item budget
• Fee-for-Service
• Capitation adjusted by age
and gender
• Capitation-Fee-for-Service
mix
• Pay for Performance(P4P)
• Hospital Payment
• Product Price lists
• Hospital Day (per diem)
• DRG‟s
• Germany: G-DRGs
• France: Groups
Homogenes de Sejour
(GHS)
• UK: Healthcare Resource
Groups (HRG)
• Italy: US Medicare DRG
(v.24 Adapted)
• Country / Region annual
budgets + DRGs
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Reimbursement Process: Italy
Source: ISPOR Website
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Reimbursement Process: Italy
Source: ISPOR Website
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Tightening NHS budgets Impact Markets
Revenue streams, particularly in early launch, are less predictable and slower to develop
Market entry will require innovation; premium price will require proven value.
Population growth doesn‟t necessarily align with market potential
Product development, expectations, will need to reflect global realities
New challenges for integration of design, regulatory, clinical and marketing strategies
* Hull Associates presentation, Advamed Reimbursement Workshop, November 2010
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Trends in EU Reimbursement
• Greater opportunities for premium reimbursement
• Requires clinical studies, HTA and evidence based effectiveness
to support premium reimbursement
• Reward for innovation, particularly with efficiencies and lower
complications
• Cost effectiveness studies are not required to enter the EU
market but will become more important for reimbursement and
adoption
• Cost impact required for France, Germany, Italy, Belgium, Italy
and Spain
• Greater need for HTA with more networking and sharing of
economic evidence
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European Commission: Exploratory Process
Background:
An exploratory process on the future of
the medical devices sector has been put
in place over the second semester 2009
to map the existing public health and
industrial challenges in the sector and
investigate possible topics of reflection
at the European level.
This process has provided for industry, users, and consumers of medical devices with an opportunity to share existing challenges.
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European Commission: Exploratory Process
Objective
The objective of the exploratory process on the future
of the medical devices sector was to gather at the end
of the process:
an overview of existing public health and industrial
challenges,
to identify current dynamics of the industry and
highlight key topics of interest at the European
level which has resulted in a set of suggested
themes of potential further reflection adopted by
the members of the exploratory process.
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Exploratory Process on the Future of the
Medical Devices – Commission Membership
• EUCOMED : Trade association representing the medical technology industry
• EDMA : European Diagnostic Manufacturers Association
• COCIR : European Coordination Committee of the Radiological, Electromedical and Healthcare IT Industry
• EUROM I : European Optical Industry committee
• EUROM VI : European Industrial Federation committee on Medical Technology
• EHIMA : European Hearing Instrument Manufacturers Association
• EUROMCONTACT : European contact lens and lens care industry's association
• FIDE : The Federation of the European Dental Industry
• CPME : The Standing Committee of European Doctors
• EAHP: European Association of Hospital Pharmacists
• UEMS : European Union of Medical Specialists
• ESC : European Society of Cardiology
• EFORT : The European Federation of National Association of Orthopaedics and traumatology
• ESR : European Society of Radiology
• HOPE : The European Hospital and Healthcare Federation
• EPF : The European Patient's Forum
• BEUC : The European Consumers' Organization
• ESIP : The European Social Insurance Platform
• AIM : Association Internationale de la Mutualité
• PGEU : Pharmaceutical Group of the European Union
• EFCC : European Federation of Clinical Chemistry and Laboratory Medicine
• CED : Council of European Dentists
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European Commission – Exploratory Process
Final Report Published January 28 2010
Future challenges and opportunities for public health and medical technologies developments
Balance between the patients' needs and financial sustainability
Competitiveness and Innovation of the medical devices industry
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WHO Project on Priority Medical Devices
Designed to identify the gaps in the market for medical
devices and to focus on meeting health and health-care
needs and addressing critical conditions.
• put in place appropriate regulatory systems;
• harmonize the nomenclature and classification systems;
• ensure that devices have proven benefits to the patient before they enter the market;
• carry out systematic needs assessments to avoid under-use of medical devices;
• ensure that clinical guidelines describe a specific technology;
• ensure proper training to prevent damage;
• ensure the technology is used in the proper context;
• ensure human factor engineering and context appropriate design;
• be aware of the factors that play a role in diffusing a technology
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Thank You!!
Bob Parson
2nd Annual European Medical Device Reimbursement Workshop
