The high hurdle to new reimbursement will, and is meant to, discourage all but the most confident in the value of their novel therapy or diagnostic.
By Amy Siegel, S2N Health
Many new medical technologies, particularly the low- or mid-tech ones, fit more or less neatly into an existing reimbursement code. For the companies developing such devices, de-risking involves demonstrating 1) it works and won’t kill anyone, 2) the path through FDA is efficient, 3) the company can manufacture it at attractive margins, and 4) enough people will want to buy to imagine profitability.
For most “disruptive” medical technologies, however, it is the market adoption risk that often generates the most worry starting around Series B and escalating to a fever pitch in the quarters leading up to launch. Providers generally want to get paid more for using expensive new technology, and additional reimbursement typically lags years behind product approval if it ever happens at all. Compared to the payers of the world, the medical device regulatory bodies are virtual pussycats. You did one study for FDA? We need three. You studied patients out 6 months? We want two years. And we still might not pay extra for your devices, no guarantees.