It is widely recognised that there are a number of characteristics specific to the MedTech industry, such as limited clinical evidence, device-user interaction (or learning curve), incremental innovation, dynamic pricing and organisational impact, that make the economic evaluation of these technologies complex.1 These challenges, combined with less well-defined HTA processes and access pathways compared with pharmaceuticals, and the fact that economic evidence isn’t routinely required for reimbursement, result in fewer robust economic analyses for MedTech products, or analyses conducted late in the product lifecycle.
Budget impact models are one of the most commonly developed model types in MedTech and are a valuable tool when approaching local decision makers. Solely focusing on costs, they estimate the economic impact of introducing a new product into a care pathway in the short-term (typically up to 5 years), which is a particularly important consideration given the financial constraints on many healthcare systems globally.
Cost consequence analyses are also useful in demonstrating the breadth of value of a technology, thinking beyond the direct health benefits experienced by patients. This is particularly valuable in the MedTech space, where technologies often transform patient pathways offer efficiency savings such as reductions in healthcare resource use enable shifts from secondary to primary care, or improve working practices/user-experience for healthcare professionals. Demonstrating these aspects of value is becoming increasingly important in light of the growing pressure on healthcare systems to improve productivity, move care to the community setting and reduce waiting times, all of which are key policy focuses outlined in the UK NHS 10-year plan and other European healthcare system reforms, such as Germany.2, 3
The need to demonstrate the range of advantages a MedTech product offers may be a key reason why cost-effectiveness analyses, specifically cost-utility models, are not as commonly developed for MedTech as for pharmaceuticals. The quality-adjusted life year (QALY), considering both length and quality of life, is commonly used in cost-effectiveness models to measure the benefit to patients receiving treatment with the intervention. However, it is often not possible to distil wider merits of MedTech products, such as those listed above, into this single output. There is, therefore, a common conception that cost-effectiveness models aren’t required or particularly useful for MedTech market access, exacerbated by the frequent challenges associated with sourcing robust clinical data to inform these models. Taking a UK perspective, one of the key changes from the NICE HealthTech Programme consultation earlier this year was a shift towards cost-effectiveness evaluations (discussed previously here) and, more recently, the NICE Health Technology Evaluations Manual was updated to include more specific reference to ’HealthTech’ (encompassing medical devices, diagnostics and digital technologies). It is therefore anticipated that cost-effectiveness analyses may start to play a more prominent role in decision making for medical devices going forwards, at least in the UK market.4, 5
In MedTech, economic models have not historically been required for reimbursement. As a result, economic modelling typically sits late in the product lifecycle and market access process, and may even be viewed as an impediment, potentially delaying reimbursement. However, positioning economic evaluation earlier in the product lifecycle can act as a positive contributor to product development as opposed to a barrier, offering several potential benefits such as:
In summary, despite challenges associated with conducting economic analyses for MedTech products, in particular early models, these can be a valuable tool for informing future evidence generation requirements and refining value messaging. By adopting a forward-thinking approach and integrating economic modelling early in the product lifecycle, companies may also be better positioned navigate the evolving global reimbursement landscape as healthcare decision-makers increasingly prioritise cost-effectiveness analyses.
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If you would like any further information on the themes presented above, please get in touch, or visit our MedTech page to learn how our expertise can benefit you. Ben McNally (Head of MedTech) and Emily Procter (Senior Health Economist) created this article on behalf of Costello Medical. The views/opinions expressed are their own and do not necessarily reflect those of Costello Medical’s clients or affiliated partners.
