Regulatory and Reimbursement Landscape for Mechanical Circulatory Support

Introduction

A regulatory/reimbursement product plan should be created simultaneously, early in the product development cycle, with the concept of developing ongoing evidence to support appropriate device use. If each is treated separately and implemented linearly rather than collectively, significant market access delays and restrictions can be anticipated. Outlining clinical study protocols with regulatory agencies and payers is necessary to demonstrate whether the product is not only safe and effective but also reasonable and necessary, providing value to the health care system. An evidence development strategy sensitive to the needs of regulators, payers, and providers—when successfully implemented—allows patients faster access to life-saving technologies. This chapter provides global historical content impacting our current regulatory/reimbursement environment and defines the necessary course to patient access. The case study of mechanical circulatory support provides many elements of a successful regulatory/reimbursement evidence-based strategy.

History of medical device regulations

Within the realm of US Medical Device Regulation and Reimbursement, medical devices went largely uncontrolled from a regulatory standpoint until the late 1930s, when Congress enacted the Federal Food, Drug, and Cosmetic Act of 1938. This established the Food and Drug Administration (FDA) as a separate law enforcement agency to regulate mainly drugs but also medical devices and required they be proven safe before they could be marketed. Until 1938, medical devices were developed and marketed in an unregulated way, including eyeglasses (1752), the stethoscope (1815), the x-ray machine (1895), the electrocardiogram device (1903), and the world’s first cardiac pacemaker (1936). In the early 1950s came the first use of a mechanical heart manufactured by General Motors, and by the late 1960s, the world saw its first heart-lung bypass machine and mechanical artificial heart. Developments in medical devices and surgical procedures led to the first heart transplant (1967), performed by a South African surgeon Dr. Christiaan Barnard. The patient, a 53-year-old man, died 18 days later, but this event started what is now regarded as one of greatest medical achievements of our time, made possible by the advancement of medical devices.

In 1966, another regulatory milestone was established under the authority of the US FDA called the Fair Packaging and Labeling Act. This act required all US foods, drugs, cosmetics, and medical devices in interstate commerce to be honestly and informatively labeled. Furthering the regulation of medical devices, the US Legislature passed the Medical Device Amendments Act of 1976 to establish a classification and control process to ensure the safety and effectiveness of medical devices. The amendments also required manufacturers of medical devices to register with the FDA, follow quality control procedures, and established premarket-approval (PMA) requirements for certain types of medical devices. It was not until the early 1990s when the next milestone relative to regulation of medical devices occurred. The US Legislature passed the Safe Medical Device Act of 1990, requiring nursing homes, hospitals, and other facilities that use medical devices to report to the FDA incidents that suggested that a medical device probably caused or contributed to the death or serious injury of a patient. The Act also required manufacturers to conduct postmarket surveillance on permanently implanted medical devices whose failure might cause serious harm or death and to establish methods for tracing and locating patients depending on such devices. It also authorized the FDA to order medical device product recalls and other actions.

In 1997, after complaints of a slow medical device approval process from medical device manufacturers, the Legislative branch enacted the Food and Drug Modernization Act to accelerate review of medical devices. The Modernization Act exempted premarket regulatory requirements for all Class I medical devices (low risk) that are not intended for critical human health. In 2002, the Legislature passed the Medical Device User Fee and Modernization Act, which mandated fees to medical device companies for evaluation or approval of medical devices. Provisions were also established for medical device manufacturing inspections by accredited third parties and new requirements emerged for single-use medical devices. Then, in 2005, the Medical Device User Fee and Stabilization Act was passed, which amended the original Medical Device User Fee and Modernization Act of 2002. This allowed the FDA to change how it uses the user fees and requires development of better regulatory systems to support effective and timely product reviews and also allowed it to enact new regulatory reforms, all aimed at bringing safe and effective devices to market sooner.

Finally, there are two additional pieces of legislation aimed at aiding in the FDA’s goals to protect and promote public health while providing timely access to safe and effective medical devices; the FDA Amendments Act of 2007 and the FDA Safety and Innovation Act of 2012. Both these legislative acts reauthorized user fees to provide resources to the FDA, aimed at timely review and approval of medical devices. These include improvements in the approval submission review process, codification of the use of interactive reviews to speed the review process, better FDA guidance development, and authorized FDA resources for improvements in reviewer training and review performance tracking.

Fig. 21.1 is a timeline of regulatory milestones from the inception of regulation through the current day.

Global reimbursement

At this point in time, there is no global reimbursement pathway. Each country establishes medical coverage, creates adequate codes, and assigns a payment group for devices. However, there are country clusters with similar mechanisms in establishing reimbursement. Table 21.1 attempts to unify a noncentralized approach by country groupings.

Regulatory pathways for mechanical circulatory support devices

Today’s mechanical circulatory support (MCS) include devices for acute temporary support, short-term support or bridge to transplant (BTT), long-term support or destination therapy (DT), and total artificial heart (TAH). For the purpose of illustrating the total product life cycle for MCS devices, we have chosen to focus on BTT and DT support devices as these are highly complex and used worldwide. The regulatory pathway to commercial approval for a MCS device is dependent largely on its intended use. Today, there are two primary intended uses for MCS devices, although this is evolving and may someday be reduced to a single intended use for advanced heart failure patients with hemodynamic compromise requiring MCS. The first is short-term MCS for advanced heart failure patients who are refractory to medical treatment and in need of hemodynamic stabilization either as BTT or for myocardial recovery, and the second is for DT where the patient’s options for either recovery or heart transplant are unlikely due to age, malignancy, or morbidity.

In the United States, MCS devices are considered Class III devices (regulatory classification) and require a PMA application from the FDA before commercialization can be granted. In the EU, MCS devices are also considered Class III medical devices and require approval of a Design Dossier from an EU Member State–appointed Notified Body before the MCS device can be commercially approved and placed onto the market. Significant preclinical design verification and validation (V&V) testing, animal testing, and data from prospective controlled human clinical evaluations are required to support the safe and effective use determination made by these regulatory bodies to gain commercial approval.

In major global markets, regulatory systems are used to establish medical device classification (Class I, II, or III) based on their function and intended use. Less critical medical devices (Class I) such as syringes, tongue depressors, and wheelchairs may be exempt or have the least burdensome premarket regulatory requirements. More complex medical devices (Class II) such as catheters and ventilators may have standards or controls that must be met to ensure their safety and effectiveness prior to PMA. The highest regulatory classification for medical devices (Class III) is reserved for those that support or sustain human life, are of substantial importance in preventing impairment of health, or present a high risk of injury or illness to patients. Medical devices in this highest regulatory classification include breast implants, knee replacements, pacemakers and, of course, MCS devices. Because of the high-risk, life-sustaining nature of these devices, the regulatory pathway to market approval is also the most comprehensive and rigorous. Most medical devices in this category require valid scientific evidence to support that they are safe and effective for their intended use. Usually, this comes from demonstrating that the medical device conforms to required standards and performing extensive, lengthy, and costly prospective controlled clinical trials.

Reimbursement pathways for mechanical circulatory support devices

Establishing reimbursement early in product development is essential for patient access. Although reimbursement is composed of coverage, coding, and payment, coverage—the conditions under which a product or service will be paid for—is the essential first step that drives ultimate access for patients and ideally is gained prior to the assignment of administrative codes or assignment into payment structures.

Before the launch of any MCS device, a comprehensive analysis of each of these reimbursement drivers is essential to market success. The primary path to payer coverage of a product, procedure, or service occurs when a product is deemed a “reasonable and necessary” medical treatment, but payers demand a further level of evidence to show effectiveness (does it work in the real world?) and efficiency (does it provide a better value?). The Advanced Medical Technology Association, an industry group representing medical technology manufacturers, has reported that CMS takes an average of 2 to 5 years to create coverage for a new product, with private insurers’ timeframes varying widely. The earlier the coverage process is initiated, the sooner reimbursement will be established. Perhaps most importantly, this 2- to 5-year anticipated timeframe for coverage can be reduced if a reimbursement plan is implemented early. When developing a reimbursement plan, the following questions should be asked and planned for accordingly:

• 1.

  Where will this product fit in the larger health care arena?

• 2.

  Will this product meet not only the US FDA “safe and effective” standards required for regulatory approval but also payers “reasonable and necessary” and likely “effective and efficient” requirements?

• 3.

  How can the reimbursement adequately cover the cost?