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Why tech is failing to reach patients

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Michael Branagan-Harris, CEO, Device Access UK writes.

It has been said that it takes an average of 4.6 years and millions of pounds to get a technology through R&D, regulatory, manufacturing, and clinical research to launch.

That’s a very long lead time and thousands of hours of hard work too. The global regulatory approvals landscape has always had its changes and challenges for all countries. But far too many medtech companies believe that compliance is enough to pitch to hospitals and clinicians to get their medtech products paid for and adopted.

NICE was originally set up as a filter between the manufacturers of medical devices and the NHS, as a screening process to ensure that devices were safe for patients, effective and value for money. Like most healthcare systems, there exists a very strong directive to look at pricing and cost effectiveness.

So why are so many manufacturers using archaic and failed methods to reach a justifiable sales price for a new technology, when it has impacts for patients, providers of care and payers of care?

Most device companies work on the same principles that are used in the world of fast-moving consumer goods, based on the manufacturing cost price plus a healthy margin. Some go to lengths of finding out what they could sell their devices for by conducting interviews with clinicians - but are clinicians really qualified in understanding the value and benefit of a great new technology beyond their part in using or implanting them? And how do they justify the investment up the line to their managers for purchasing?

This traditional mechanism of pricing often leads to disappointing results. It can result in adoption failure, as the benefit of a given technology to patients, providers and payers has not been researched and therefore cannot be communicated scientifically.

This approach will have an effect on the selling price, which should be optimised for the benefit of the device manufacturer, so the technology reaches the largest, most needy and most appropriate patient cohort. 

So, is there something to learn here from the pharmaceutical industry? Can you imagine the pharma industry using these interview and guess-selling price principles? No. The investment cost of a new drug taking years to invent, test, manufacture, and get approved needs to be fully justified, and for that they work backwards and understand scientific pricing before they start the process – let alone to get funding and investment to do so.

But what is the right approach, and when is the right time to consider value when inventing a new technology?

For that, let’s take a look at the most common principles used by the medtech industry. These are often the principles of marketing, a process designed back in the 1960s.

Marketing decisions tend to fall into four categories: product, place, price, and promotion. They are referred to as four ‘controllable’ categories. They are ‘controllable’ because manufacturers’ efforts affect them or their outcomes.

Policies, rules and regulations on the other hand, are ‘uncontrollable’ categories. Manufacturers’ need to learn to influence them, and understand this as early as possible in the process.

It’s not just about regulatory approval, either. Manufacturers must also focus on the value proposition scientifically, and to engage with organisations, like NICE, to assist them in a national strategy for adoption.

In my experience over the last nine years of engaging with hundreds of manufacturers of medical devices, the term ‘market access’ is often used. But what is market access, and what does it mean?

For this we describe the ‘four principles of market access’ to help manufacturers think differently, scientifically and strategically to bring great technologies so patients ultimately get them sooner:

Benefits to patients

First and foremost, and quite rightly, new products are focussed on improving patient’s lives and outcomes. Less invasive, less pain, faster recovery and return to normal life with minimal risk to life. This has a far wider cost effect on welfare and if the existing treatment fails, this has an effect on the patient’s life and their dependence on the provider of care.

The patient voice around existing therapies and excitement around the new techniques are today very strong due to social media, and form part of the very important feedback required.

Benefits to providers of care

Many manufacturers here default to the fast-moving consumer goods principles, the most common (and hardly scientific) conversation being “it’s cheaper” and “it’s better”. Other words that now have little effect are “innovative”, which doesn’t really help hospital decision makers. If what they are buying is not going to help deal with the big issues in a hospital, then it’s often easier by default to use the same old existing proven technology with predictable outcomes, which the clinicians are used to.

The very worst outcome here is that the conversation between the salesperson selling a new device ends up with a hospital procurement manager becoming the ultimate decision maker.

It’s no wonder these conversations often end with downward pricing negotiations, and profit/value erosion, often when the salesperson has failed to demonstrate the value and benefit to the right people higher up in the hospital organisation. But are the medtech salespeople of today equipped with the science and the knowledge to do so?

So, this is where understanding the bigger picture is so valuable. Let’s take the NHS again, where up to 45% of inpatient admissions and 25% of outpatient referrals are now, due to a growing and ageing population, and where demand for elective and cancer treatments is growing year on year.

Despite increased funding, patients are being let down by the NHS’ failure to meet deadlines for waiting times. The percentage of patients treated within waiting times standards continues to get worse for both elective (non-urgent care) and cancer treatment.

Less than half of NHS hospitals meet the 18-week waiting times standard for elective treatment, and only 38% meet the 62-day standard from referral to treatment for cancer patients. NHS Hospitals now routinely operate with a bed occupancy rate of more than 90%.

This of course affects elective patient care as patients may have their treatment postponed because beds are needed for emergency admissions, resulting in delays to treatment and poorer patients.

This all due to bottlenecks in the hospital system, and is precisely the area where technology can help save valuable bed days with less invasive treatments and improving care pathways.

But without the sales persons knowledge of what really is happening, and how the technology can help solve the hospital issue around productivity, the default language of “cheaper and innovative” is really not helping.

Benefits to payers of care

The payers of care hold the money to fund the providers of care – the hospitals for the care episodes, and funding the treatments and medical technology.

The pharmaceutical industry, particularly in the UK, has had the privilege and benefit of knowing very detailed information on the prescriptive use of drugs and subsequent disease states down to the pharmacy provider, by post code accuracy. This makes it relatively easy for the clinical commissioning group spend and activity.

This information on usage really helps pharma to have far better value and benefit conversations with the payers.

The UK medtech industry often does not even engage with the payers, and if they managed to, they would need to really raise their game in terms of understanding the populations they treat. The ultimate benefit communication should be around getting the right treatment for the right patients, and real justification for adoption. The payer doesn’t like treatments that fail or result in costly unelected emergency readmission.

Benefits to the manufacturer of products

This is where manufacturers can really optimise their sales price and design devices around a more scientific budget and price.

Starting with understanding the economics of the patient pathway, the outcomes and benefits for providers of care and payers, they can truly start to understand how to optimise their product price and not use the old 1960s principles of marketing and margin for their technology.

For the UK, despite growing needs and demands for the population, NHS England treated 400,000 more elective patients last year, and 362,000 more emergency patients too.

So the market and need for great transformative medical technology is growing globally, the patients are better informed and want it, the providers need it to deliver great care and get paid, and the payers want value for money and better outcomes.

If the medtech industry engaged at a higher level as consultative and collaborative problem solvers, instead of being afraid to use organisations like NICE to validate and support their story, products would reach patients faster, providers and payers would benefit, and ultimately the medtech industry would be more sustainable and profitable.

Since 2010, Device Access UK has supported over 30 medtech companies through NICE processes and approvals. It holds access to NHS England’s patient episode database and is able to understand patient care and treatment pathways, outcomes and costs.

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