As originally asked by Giovanni Lauricella.

Reimbursement is not a new concept, but certainly one that is coming up more and more in conversations when it comes to bringing a new technology to market. The financial crunch did not help anyone be able to come out of pocket for expensive “necessary” surgeries. So, when a startup company has a concept they would like to bring to market (especially if it is an expensive device), they better hope they can get it reimbursed.

My question is, “How early should a reimbursement plan be defined for a medical product in a startup company’s life span?”

John Douglas
“If the bee disappeared off the face of our Earth, man would only have four years left to live” Albert Einstein.
I agree with Lola that a new startup needs a cost benefit outcome component in the overall strategy and any clinical trial strategy. The Australian Government will not pay for, or set health fund reimbursement policies for new medical technologies with ONLY lifestyle benefits.

Lola Yoshinaga
Marketing and Clinical Professional
All the more reason to ensure clinical studies are designed to not only determine patient safety and effectiveness, but include information needed to pursue desired reimbursement objective.

Todd Staples, MBA
Account Representative, GYN at Medtronic
Excellent point Bruce, one of the dangers of bringing premium value add competitors in through the 510K process where reimbursement is already established for the early entrants.

Bruce Gibbins
Owner at Bruce Gibbins Consulting
Reimbursement strategy is now a key question that VC’s and sophisticated investors are asking up front. It is often tempting to “wing” the answers. However the strategy is so key to success and so easily mis-managed that it pays to bring in consultants before there is any introduction of the product to the market and also before there is any clearance sought to go to market. The antimicrobial wound dressing market will be a reimbursement “study” as it is a supreme example of how reimbursement can be screwed up. Manufacturers sought clearance to market by claiming substantial equivalence to non-antimicrobial dressings. With approval gained the dressings were taken to market with outstanding success but with reimbursement only equivalent to non-antimicrobial dressings. When manufactures realized the wide spread acceptance of their new products sought an up-charge via a new code CMS turned them down, reasoning that clearance was gained by showing the dressings were the same as predicates and that manufacturers were apparently making money selling them under existing codes. The lesson learned: Understand your product; determine if it’s already coded or needs a new code; don’t sell at one code if you think you want a stand alone code eventually.

Todd Staples, MBA
Account Representative, GYN at Medtronic
I think it depends on the product actually. If you are creating a new technology for surgical headlights, there will never be a reimbursement code for that so it won’t matter. If you make reusable stainless steel retractors, same thing. If you make a unique new sterilization technology for the hospital OR, no reimbursement will ever exist. The only products that really apply are disposable single use products, implantable, and perhaps a few others that I am missing. The more important question is around value proposition from the early stages. If you can’t show a potential customer how you will provide a better outcome or result at a lower cost or workload, then it will be a difficult sale. A good reimbursement strategy (if applicable) contributes greatly in the value proposition formation, which I agree should be developed early on.

Jean Bigoney, RAC, CQE
Regulatory Affairs Specialist.
Agree with all three previous comments. Too many start-ups without accompanying regulatory affairs advice tend to see FDA clearance as THE hurdle to being able to sell their device. Depending on whether the device depends on Medicare reimbursement, private payers or is intended to be marketed directly to consumers can have a bearing on the regulatory strategy towards the FDA. Reimbursement strategy cannot be considered early enough!

Michael Zagorski
Medical Device Quality and Regulatory Expert, RAC, CQE, CQA
I agree with both comments. The company should have at least a preliminary strategy as part of their financial projections in their business plan. The complete strategy and plan should be developed no later than the beginning of clinical studies.

Ze’ev Weinfeld
Seasoned Executive, Consultant and Entrepreneur
Absolutely from the beginning. A reimbursement plan and a regulatory plan that will go along with it are a must in order to define an R&D plan. All of that is intertwined with the IP strategy not to mention the business strategy of the company. In short, even a startup needs to think like the big guys if it wants to play in the major league.

Eric Denton
Regional Business Manager
From the beginning! Without a sustainable reimbursement pathway, CPT code & ICD-9 codes you will not be able to move your surgical device/technology forward. No matter how bad the surgeon or clinician wants to use it in the OR or in their respective offices.