A Financial Boost for Medtech Innovation

Advancements in medical technology should always be the goal line. Novel innovations have the potential to address many of healthcare’s concerns. From shortages of doctors and nurses to bringing treatment to remote regions to enabling more preventative measures rather than reactive ones, medtech can make a substantial difference in the future of medicine. However, in order for this to continue, there has to be financial security put into place to ensure funding and reimbursement. Fortunately, recent events are heading in this direction. 

In March, Congress passed legislation that reenabled the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. President Trump signed it into law the next month. Both programs had lapsed at the end of September last year. 

“The enactment of this legislation is great news for medtech small businesses and startups,” said Scott Whitaker, AdvaMed president and CEO. “The SBIR and STTR programs are invaluable to early-stage medtech companies. The competitive grants the programs offer advance U.S. innovation in healthcare, creating high-quality jobs, strengthening our nation’s leadership in medtech, and most importantly, serving patients by jump-starting the development of lifesaving, life-enhancing medtech. The certainty of these programs will promote the next era of transformational medtech at small businesses nationwide.”

The legislation is most beneficial to small and startup businesses, which comprise the membership of the AdvaMed Accel division. The organizations within this unit have annual U.S. revenue of less than $100 million; manufacture a medical device, diagnostic product, or medical information system for sale in the United States; and perform research and development in these areas, but are not yet manufacturing or earning revenue from the U.S. market. According to AdvaMed, a survey revealed 89% of Accel members applied for SBIR/STTR grants, with 31% successfully securing funding.

About a week later, FDA Commissioner Dr. Martin Makary and CMS Administrator Dr. Mehmet Oz expressed interest in closing the gap between FDA authorization of breakthrough medtech and Medicare coverage. Historically, this period can average almost six years. The Regulatory Alignment for Predictable and Immediate Device (RAPID) coverage pathway would provide “a new pathway designed to expedite access to certain FDA-designated Class II and Class III Breakthrough Devices for people with Medicare,” according to an agency press release. 

“The American people deserve timely access to meaningful treatments without red tape or high costs,” said Dr. Makary, “In this administration, FDA and CMS are functioning as a single team to deliver life-saving Breakthrough Devices to American patients as soon as we know they work.”

While the goal seems like a lofty endeavor, considering the delays in coverage of the past, RAPID aims to have CMS issue a proposed NCD the same day an eligible device participating in this pathway receives FDA market authorization. The level of communication between agencies for this type of collaboration may be unprecedented (which, unfortunately, adds a degree of skepticism). 

It seems I’m not the only one questioning the potential success of this program. Whitaker also seemed to have some concern. “While we appreciate this first step toward improving coverage, it is critical that the implementation of such a proposal is effective. Without meaningful timelines, accountability, and effective management of this program, patients are unlikely to see the full benefits of new technologies. We look forward to continuing our work with CMS to ensure Medicare beneficiaries have full, timely access to all the lifesaving, life-changing benefits breakthrough medtech offers—as soon as possible after FDA clearance.”

The Medical Device Manufacturers Association’s (MDMA) President and CEO Mark Leahey was a bit less cynical in his comments. “The RAPID coverage pathway holds significant promise to alleviate the problem of delayed access for Medicare beneficiaries to the newest medical devices and diagnostic tests, and to strengthen the United States’ position as the global leader in medical technology. MDMA thanks the Trump Administration for its commitment to ensuring that Medicare beneficiaries are among the first patients to benefit from American innovations.”

Hopefully, RAPID is more successful and agreeable to CMS than the New Technology Add-on Payments (NTAP) program, which the agency recently proposed for repeal as it had concerns with the evaluation process. 

Regardless of what is established, it’s critical we have a program in place that properly finances the development of new and innovative medical technology. 

Sean Fenske, Editor-in-Chief
[email protected]