The Medical Device Manufacturers Association

FOR IMMEDIATE RELEASE

Policy Director, MDMA
202.496.7150

MDMA Responds To Health Affairs Article On The Costs Of New Technology

WASHINGTON, November 10, 2003 – MDMA supports coverage and payment policies that improve patient access to improved technologies. Our membership, comprised of the innovative sector of the device industry, is responsible for developing breakthrough technologies that improve patient care, provide better outcomes, enhance quality of life, and, in the long term, save money for the federal health care system. MDMA is concerned that having too narrow a focus on reducing short-term medical costs could reduce the incentives to invest in the costly research and development process for new products. On November 5, 2003, Health Affairs published a study on the use of medical technology and its effect on costs. While the study concludes that, in general, increases in the availability of new medical technology result in higher spending, there are some important caveats to note:

This study is limited to specific technologies - diagnostic imaging, cardiac care, cancer care, and newborn care - and its results cannot be directly extrapolated to the entire device industry. The study's authors emphasize that different technologies have different impacts on costs. While the study finds that increased availability of diagnostic imaging can increase costs, the same does not hold for cancer and neonatal care. Thus, generalizations across technologies are not appropriate based on these results.
Cost savings evaluated in the study are, of necessity, short term. The authors admit the limitations of the current data infrastructure, which does not link cost effectiveness data with clinical use and outcomes data. This disconnect prevents researchers from evaluating the complete picture of a technology's cost effectiveness. The study cannot account for long term savings resulting from avoiding complications, comorbidities, and other additional costs (such as lost productivity) that could be avoided with using a new technology in treatment. As the study warns: "Any attempts to address the issue of technology availability and rising costs could end up badly misguided if implications for quality were not considered."
CMS and AHRQ have called for an evidence-based approach to clinical research and a move to "practical clinical trials," but there are concerns about who should shoulder the cost of these substantially more expensive approaches to research. Furthermore, a lack of clear coverage criteria makes the clinical research process a moving target for manufacturers, especially as cost effectiveness becomes a larger part of the agency's determinations.
CMS also should ensure that patients have access to the most cost-effective technologies currently on the market. For example, some group purchasing organizations - which allow manufacturers to pay large administrative fees to gain near exclusive access to hospital markets - drive up the overall cost of innovative medical devices without any added value. Certain GPOs' anti-competitive practices regularly block innovative, cost-saving, and cheaper products made by smaller manufacturers out of the hospital market in favor of incumbent suppliers' products, even when cheaper and/or more effective products are available.

The full text of the article can be viewed at: http://content.healthaffairs.org/content/vol22/issue6/index.shtml

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The Medical Device Manufacturers Association (MDMA) is the voice of the research-based, entrepreneurial sector of the medical technology industry. Based in Washington, D.C., MDMA advocates on behalf of our members’ collective interests before the United States Congress, the Food and Drug Administration (FDA), the Centers for Medicare and Medicaid Services (CMS) and other federal agencies that develop or implement policies that affect our industry.