Originally Published MDT March/April 2009
MARKET PLACE
Tools for Assessing the Value of Medical Devices
A series of tools has been developed that will help manufacturers demonstrate the value of their products to purchasers.
Evidence based purchasing
The Multidisciplinary Assessment of Technology Centre for Healthcare (MATCH) has created four tools to assist those developing medical devices to assess the value of their new products. The MATCH team, which comprises clinicians, engineers, social scientists and health economists, believes that evidence based purchasing will become more prevalent. This creates an environment in which manufacturers of a variety of devices must demonstrate their value to purchasers/ reimbursers, in addition to overcoming regulatory requirements. The four tools are described below.
User requirement guide
The user requirement guide provides advice to medical device developers on how to effectively involve users in the various stages of product development. It details how to plan a user requirements study, including sampling issues, applying for ethical approval and the role of user data in medical device standards. A number of good practice case studies are described. It presents generic advice that can be customised for a specific development project.
Experience curve calculator
The selling price of devices changes over time, usually downwards, and being able to predict this rate of change has strategic importance for manufacturers and purchasers. Cross-industry research has shown that prices generally decline by a fixed percentage with each doubling of product volume. MATCH research on a number of products found that medical devices, in general, do the same. Prices are affected by factors such as patent expiry and the entry of market competitors. The experience curve calculator allows manufacturers to assess price erosion and thereby helps in new product development (NPD) decisions. The tool can also be used by purchasers in price negotiations.
Headroom analysis
Assuming a device under development worked as well as it possibly could, what would be the reimbursable benefit over the existing treatment? The headroom analysis tool examines the differences (referred to as the “headroom”) between the current treatment and the new product to determine whether these are large enough to support a commercially viable product. The employed method assesses the potential benefit of the new technology over the existing treatment in quality adjusted life years (QALYs). It uses a willingness to pay threshold such as £30000 per QALY (approximately €4000), which is the United Kingdom’s (UK) National Institute for Clinical Excellence’s (www.nice.org.uk) guideline for determining the maximum potential selling price of a device.
Health economic evaluator
MATCH has developed a Microsoft Excel based software tool for assessing the value of a health care product, which is to be used by nonspecialists. The aim is to allow manufacturers to form a reliable view of a device’s cost effectiveness early in NPD. The analysis can be refined as more information becomes available, for example, with the results of clinical trials data. The tool is useful for training in concepts such as QALYs and utilities; it illustrates areas where more information is required, provides pricing strategies and allows manufacturers to demonstrate cost effectiveness to purchasers.
Help with how to use the tools
The Health Technologies Knowledge Transfer Network (www.healthtechktn.com) is assisting MATCH in disseminating information on how to use these tools at regional workshops across the UK; at the time of writing the dates for 2009 have not been confirmed.
MATCH was founded in 2003 and is an academic–industry–governmental collaboration with research teams at the UK Universities of Brunel, Birmingham, Nottingham and Ulster. It recently secured funding from the Engineering and Physical Sciences Research Council (www.epsrc.ac.uk) for the next five years. The Centre benefits from partnerships with approximately 30 UK and Irish medical device manufacturers and has funding and collaborative partnerships with the UK Purchasing and Supplies Agency (www.pasa.nhs.uk), the Department of Health (www.dh.gov.uk), the National Patient Safety Agency (www.npsa.nhs.uk) and regional development agencies.
For more information on the workshops, the tools or how to partner with MATCH for project work, contact Tom Pinto, Health Technologies KTN, tel. +44 1223 899 000, e-mail: tom.pinto@twi.co.uk, www.healthtechktn.com
Copyright ©2009 Medical Device Technology
