Medical device startups must show product's economic value
In talking about the medical device industry’s role in the rapidly shifting healthcare industry, the president of Covidien’s Global Vascular Therapies business sounded a lot like Medtronic CEO Omar Ishrak.
“We have gotten away by not demonstrating the economic value of products,” said Stacy Enxing Seng, at a recent Women’s Leadership event organized in the Twin Cities by trade association LifeScience Alley.
Enxing Seng said the No. 1 concept that must be embraced by the medical device industry today is that all technologies must show not just clinical utility, but economic value.
At medical device giant Medtronic, Ishrak has been looking at the cost equation of all technologies very closely. Last October, at the Cleveland Clinic Medical Innovation Summit, Ishrak declared that “technology without a sense of the cost-effectiveness of that technology is not sustainable.”
He added that just the fact that a product is clinically more effective is “sometimes not enough.”
And that is a vitally important point that cannot be overemphasized. Often, early-stage medical device companies are so consumed with clinical studies in their quest to show clinical efficacy and win regulatory approval from the U.S. Food and Drug Administration that they forget an equally important master: the Centers for Medicare & Medicaid Services.
CMS is as big in determining the “fate of your technology,” said Enxing Seng.
“You must have reimbursement strategies in the concept stage of your product or technology,” she added.