Reimbursement of medical devices in Australia: incentives from elsewhere

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By Deborah Bell, Executive Director of Business Development Australia, Avania

Whether it’s to control costs or to recruit a larger population, medical device makers are looking beyond the US, EU and Asia to conduct clinical trials. When planning global studies and early commercialization, Australia is a highly regarded market. Access to innovative medical services as well as an established healthcare infrastructure dedicated to excellence make the region an attractive, but often unthinkable, location for clinical research.

While most manufacturers recognize the country’s market potential, its reimbursement process is rigorous and may seem multifactorial or complicated to the uninitiated. Here, we break down the opportunities available for conducting clinical trials and successful commercialization.

Why Australia?
Along with beautiful beaches and good wine, Australia has a strong clinical research sector and a government committed to its growth. Although the country’s public health insurance program – Medicare – does not offer reimbursement for clinical trials of medical devices, it is worth considering for early clinical research.

  • One of the best healthcare systems in the world. The Commonwealth Fund ranked Australia’s public-private system third in the world, with the highest scores for equity and health outcomes. Many of its physicians have studied or trained in the United States and the United Kingdom, and many of its clinical practices are similar to those in those countries.
  • Leading research facilities. Australia is internationally known for its skilled research teams and cutting-edge medical processes, procedures and equipment. The country adheres to Good Clinical Practice (GCP) standards, which means its data is accepted by most regulatory bodies, including the FDA. The GCP standards of the International Conference on Harmonization (ICH) and the International Organization for Standardization (ISO) are mandatory for all clinical trials conducted in Australia.
  • A fluid regulatory journey. Australia’s two-tier healthcare system allows for a smooth and fairly transparent process for proof of concept through clinical trials. The collaborative network of public and independent institutional ethics committees enables a streamlined and centralized review of clinical trials to speed up approval times and consolidate required documentation.
  • Important tax incentives. The Australian government offers a research and development tax incentive to companies that invest in R&D activities, including clinical trials. Businesses with annual revenues of less than A $ 20 million receive 45% tax compensation, while businesses with higher revenues receive 40% tax compensation. Medical device manufacturers based outside of Australia should consider setting up a business entity or subsidiary in Australia to take advantage of this advantage.
  • A potentially faster process. As regulatory processes tend to resemble those in Europe, clinical trials tend to proceed faster than in the United States. Study teams often block patients so that doctors can perform procedures on multiple patients per day, spread across multiple sites.

How to get started: name a sponsor

Companies planning to conduct a clinical trial in Australia must have an Australian sponsor. This sponsor can be a doctor, a health establishment or a CRO. Sponsors work directly with the Therapeutic Goods Administration (TGA) to gain approval to import an unapproved product via clinical trial notification (CTN), to gain regulatory approval, and to obtain commercial distribution. Local sponsors also work with clinical sites and ethics committees to gain ethical approval for the conduct of the study.

The Australian Government’s National Health and Medical Research Council (NHMRC) oversees clinical trials on medical devices. The organization provides funds for research, distributes health evidence and clinical research advice, and advises on health policy.

Reimbursement of implantable devices

Companies that market implantable devices in the Australian market can apply to be included in the Prostheses List, which is governed by the Prostheses List Advisory Committee (PLAC). Private health insurers pay a specific benefit for devices on this list. The list currently includes more than 11,000 joint replacement devices, implantable cardiac devices, stents, infusion pumps, catheters and remote cardiac monitoring systems.

Upon receipt of the application, a Clinical Advisory Group (CAG) and a Clinical Expert Group both assess the comparative clinical efficacy of the products based on the evidence submitted by the sponsors. The CAGs and the expert panel advise the PLAC on whether a product meets the listing criteria and suggest the grouping in which the product should be listed.

Once the PLAC recommends listing a product, the process passes to the government health minister who decides whether to accept or deny a request. The whole process takes about six months.

Algorithm of the application process courtesy of the Australian Department of Health, Office of Health Technology Assessment.

How to Increase Your Chances of Refund Approval

As with clinical trials in the United States, manufacturers should consider reimbursement early in the clinical trial planning process. When designing the protocol and determining what data to collect, consider the following:

  • Optimizing the design of clinical trials. Design your clinical trial so that it produces as much information as possible that is as valuable as possible to regulators and payers. This includes data on quality, outcomes and quality of life.
  • Focus less on price, more on value. Many US manufacturers want to charge a higher price for their products because they are superior in ease of use and / or efficiency compared to similar products. This may be true, but Australia prioritizes value. Demonstrate how your product reduces healthcare costs and consider these measures when planning clinical trials. The goal is to collect evidence in a single study that will help prove your reimbursement case.
  • Not plan to negotiate. The Australian payer system offers a fixed price for medical devices. Unlike the United States, it does not negotiate. Hospital systems have a set budget to work with, leaving little or no room for negotiation.

With its generous tax incentives, excellent healthcare system, and relatively smooth regulatory processes, it’s wise to keep Australia on the map when planning your next global trial.

Avania is a global, integrated, full-service CRO with specialized expertise in medical devices, new technologies and combination products. They advance products from feasibility to post-approval trials in the areas of analysis, clinical trials, advice, regulation, reimbursement, and more. To learn more, visit: avaniaclinical.com.

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