Expert’s View: Trends in Trans-Atlantic Life Science Technology
June 7th, 2011
Posted by Caroline Popper, M.D., M.P.H.
In my May 17 blog post, I introduced Dr. Andreas Muehler as one of Popper and Co.’s new strategic advisors. Dr. Muehler brings broad perspectives and business insights, owing in part to his close relationships with established industry leaders in the joint development and commercialization of medical products worldwide. Building upon our last discussion, where I was caught by his enthusiasm as we talked about his past role as CEO for a struggling medical device firm and his experiences positioning products in the global marketplace, I recently talked with Dr. Muehler again to further explore his impressions on the differences between the E.U. and U.S. markets for new life science technologies.
CP: You’ve served within or supported the pharmaceutical and medical device industries in both Europe and the U.S. What do you see as some of the differences?
AM: There are differences in the health care system itself – mainly how you pay for health care delivery, what gets reimbursed, and what control in decision making a physician has in terms of technologies used. For example, the U.S. has good reimbursement for breast biopsies using MRI. In Europe, it’s mainly done with ultrasound because MRI isn’t paid for at all. So in the U.S., technologies are being used when insurance will reimburse for testing and therefore provide a financial benefit to the hospital or physician. In Europe, however, clinical data around a technology is very important in terms of benefit for patient or patient outcome. In Europe, there’s a higher likelihood that good technology, which is backed by good clinical data, will be used when all ducks line up, and the financial benefits to physicians may be less of an overriding issue.
CP: When it comes to launching a new technology, can you tell us more about some of the pros and cons for each geographic locale?
AM: The advantage of Europe for marketing a new technology is that physicians are free (in particular in the hospital setting) to choose their technology if they believe it has a benefit. In Germany, for example, there is a general pricing reimbursement system in hospitals through which the hospitals receive a lump sum payment for a patient with a certain diagnosis but are basically free to use any products and technologies as they see fit. The hurdle to get into market is less as long as you have good clinical data. In the U.S., however, physicians are more open to trying new technology even without clinical data, which can be good for companies. Physicians in the U.S. are also very open to use of electronic patient records (EPR); whereas in Europe, physicians are not as convinced that EPR makes a difference and have more concerns around patient privacy.
CP: What’s different today than five years ago in terms of health technology adoption?
AM: On both sides of the Atlantic, there’s an increase in need for good clinical data for adoption of new devices, in part because of financial pressures on the systems themselves. To successfully market your device, the importance of large-scale clinical data has grown if you want market penetration of your product. In the past, a small clinical observation was sometimes enough to get adoption of your device. Now physicians ask for clinical outcome data and payers and hospitals ask for pharmaco-economic data.
CP: What will be different five years in the future?
AM: The pendulum swings back and forth. The U.S. will realize that a lot of innovation in medical devices will go to Europe because of current restrictions within the FDA’s 510K process. If good examples of important medical breakthrough technologies emerge in Europe that America doesn’t have access to, I believe some new processes will evolve that will allow medical technologies to get approved quicker in the U.S. One such example is hearing implants. Countries like Austria and Germany had in the past instituted mandatory routine hearing tests for babies, and, if needed, paid routinely for hearing implants while the children were still quite young. As a result, most educational facilities for children with hearing disabilities in Austria and Germany actually closed since implanted children undergo an almost normal linguistic development. In the U.S., hearing implants aren’t yet available as widely because they are seen as expensive for the healthcare system and by payers, even if they save more than their share of costs down the road by removing special educational requirements. If this continues, the industry should lobby to politicians and changes may occur in the regulatory process. Then, hearing implants will likely be made more widely available. By the way, the European policy for early hearing tests and hearing implants produced a market leader in hearing implants that is located in Austria.
There are important insights here, especially the need to track the level of clinical research attached to a product as it’s introduced to the E.U. market. It’s also important to note how receptive the European medical community is to new technologies introduced from the U.S. We’ll continue to focus on this important topic, and to share additional insights from Dr. Muehler and our second advisor, Dr. Mills.
We welcome your thoughts on the importance of clinical data in selling medical technologies and how the pendulum of restrictions continues to swing. Where do you think we are now in the U.S. as far as restrictions and our ability to sell in the E.U.? Share your thoughts below.
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