A Division of William A Cook Australia Pty Ltd ABN 79 005 526 723
12 Electronics Street, Brisbane Technology Park
Eight Mile Plains, Queensland 4113 AUSTRALIA
Phone: +61 7 3841 1188
Free Call (Aust): 1 800 777 222
Fax: +61 7 3841 1288
31 October 2011
Department of Health and Ageing
GPO BOX 9848
Canberra ACT 2601
To whom it may concern,
Please find attached to this letter COOK Australia’s submission relating to the Department of Health and Ageing – Health
Technology Review Discussion Paper.
COOK Australia supports the government’s decision to review Health Technology Assessment and anticipates a more
efficient, transparent and fair system in the future.
Dr A R Wilkinson
Medical Science Officer
HTA Review – COOK Australia
HEALTH TECHNOLOGY ASSESSMENT REVIEW
The Federal Government’s ‘Review of Health Technology Assessment’ in Australia framed
the following terms of reference for comment:
1. Simplification and better co-ordination between the Commonwealth HTA processes (as
identified in the Review scope), which includes:
a. consideration of a single entry point and tracking system for applications for
market registration and funding;
b. making time to affordable access as short as possible for new technologies while
maintaining or improving the rigour of evaluation processes;
c. examination of the feasibility of conducting concurrent assessments for market
registration and funding and coverage purposes, noting current work in this area.
2. Improving role clarity and addressing duplication between processes, where it exists,
including consideration of consolidating functions with the Australian HTA system.
3. Reviewing post marketing surveillance mechanisms to ensure the ongoing safety, and
efficacy of medical devices.
4. Strengthening transparency and procedural fairness in the assessment, decision making
and fee negotiation arrangements for processes (as outlined in the Review scope) through
improved communication with stakeholders about process, methodologies, outcomes and
performance against key indicators.
5. Enhanced arrangements for assessment of co-dependent and hybrid technologies.
The terms of reference suitably cover the required scope for a review of HTA in Australia. As
an Australian manufacturer, COOK Medical has experienced the inequitable system
underpinned by the Therapeutic Goods Act and Regulations. Once through the regulatory
maze, COOK is then forced to negotiate a non-transparent and seemingly random pathway to
reimbursement. This process might otherwise be described as arbitrary price fixing rather than
true appropriate benefit negotiation. The current sequential application process is the greatest
barrier to timely registration and reimbursement of medical devices. Re-review of efficacy
and safety data that has already been reviewed by the regulatory body is wasteful and
unnecessary. The time delay equates to an inequity between public and private patients, with
the latter unnecessarily prevented from reimbursed/funded access to new technologies
immediately post registration. For this reason, the review of the HTA systems currently
operating in Australia is both welcomed and applauded.
COOK Australia is an active member of the Medical Technology Association of Australia
(MTAA), the peak industry body for device and IVD sponsors. COOK has had the
opportunity to review the MTAA submission for HTA review and endorses the contents of
their report. In particular, COOK supports the recommendation that the TGA remain the sole
regulatory body for product registration in Australia (within the context of ongoing
discussions surrounding Third Party Review), COOK also supports the establishment of a
single independent body for HTA review. Despite the separate bodies, there is a requirement
that both processes be accessed through a single application system and simultaneous entry
point. Furthermore, COOK supports the suggestion that all agencies be required to operate
HTA Review – COOK Australia
under transparent guidelines with a reasonable process available for appeal, including appeal
based on merit (e.g. Administrative Appeals Tribunal). The MTAA document, by necessity, is
a broad based overview that represents the spectrum of its members. As a result, there are
certain elements unique to COOK that are not covered by the MTAA HTA document and for
which we provide comment below:
1. Custom Made Devices
For the past decade, COOK Medical has manufactured minimally invasive devices for the
endovascular repair of aortic aneurysms. COOK offers a range of standard endovascular
devices that have been fully evaluated and approved for marketing by the Therapeutic Goods
Administration (TGA). These devices are sold under the Zenith Endovascular Graft brand
name. However, the randomness of the human body creates anatomical anomalies in certain
patients that preclude treatment with standard endovascular devices. In these circumstances,
the Therapeutic Goods Act 1989 (Cth) allows the treating physician to prescribe a custom-
made device that has not been reviewed and approved by the regulator.
The nature of custom-made devices (i.e. devices designed and made under clinician
prescription for an individual patient's peculiar anatomy and disease) make them exempt from
TGA approval, as they are not standard devices. Under the current reimbursement regime,
custom made devices cannot be listed on the Prosthesis List and subsequently reimbursed by
private health funds as they do not comply with the threshold requirements. Most importantly
they do not have an ARTG number. The issue for private patients is that there exists only one
possible reimbursement mechanism available, i.e. an application to the patient's Health
Insurance provider for an ex-gratia payment approval for this intervention. The only other
option is full payment by the patient.
This creates an inequitable position between public and private patients, and also an inequity
between private patients with standard anatomy and private patients with anomalous anatomy.
Furthermore, the requirement to request an ex-gratia payment from the Health fund is
problematic for all parties. As the manufacturer, COOK must design and build a device
within a time frame that does not adversely impact on the patient clinically; as every day
without treatment increases the risk of aneurysm rupture. However, to meet this necessarily
tight time constraint, the device is often well along the design and manufacturing pathway
before we are assured that the Health Fund will reimburse the device. In addition, the surgeon
and patient cannot confirm treatment options until the payment status is known.
A further issue not addressed by the current assessment system is that Health Funds demand
an equivalent Prostheses List Billing Code be quoted by the manufacturer in order to assess
and approve ex-gratia payments. The design and manufacture of CMDs is often significantly
more complex than standard off the shelf devices and involves sophisticated imaging software
to create an anatomically conforming device. The manufacture of these hand-made device(s)
therefore demands significantly higher levels of planning; increased use of resources; and
more time, than standard devices. As a consequence, aligning ex-gratia reimbursement with
the reimbursement level of a similar standard device listed on the Prosthesis List results in an
appreciable underpayment to COOK Medical for these life-saving products.
Custom made devices are a required element of modern medical care. These CMDs provide
the physician with the ability to treat the most difficult of patients who are not otherwise
amenable to care with standard off the shelf technologies. However, the ability to provide
HTA Review – COOK Australia
these technologies requires significant resource allocation by the company. It would be
anticipated that any new HTA system would have the flexibility to address the current
reimbursement issues of custom made devices. Within this context, COOK sees a suitable
way forward to be that custom made devices be listed on any reimbursement lists as a
suffixed component of the standard device (e.g. standard = TFLE, custom = TFLE-C). This
provides a recognition that the CMD is based upon safe and effective technology, albeit
purpose built for a single individual. In addition, the HTA scheme requires an ability to set a
price for these custom made devices that recognises the additional time, effort and money that
is rolled into the cost of these devices.
2. Post Market Surveillance
The requirement for post market follow-up of medical devices continues to be an ongoing
discussion point within the global medical device industry. The efforts to harmonise medical
device regulatory requirements around the world has led to the emergence of expanded post
market surveillance of medical products. There is some expectation that the interest in post
market reviews will equate to more formalised approaches from regulatory bodies. The
current changes to the MDD in the EU requiring this formalised post market can only benefit
HTA. We would propose that appropriate post market review of medical devices be
incorporated into the structure of any proposed HTA body.
The benefit to the industry of post market surveillance is an item that would need in principal
support from the government body responsible for HTA. The benefits could be seen in
allowing product to market at one price on the basis that the company collect data on
effectiveness. These data could then be used for a renegotiation of the price once the data has
been analysed. This could potentially lead to improved pricing negotiations and allow for
increased (or decreased) benefits to be paid for products that out (or under) perform
comparators. The benefit to the public and the government of incorporating post market
vigilance into any HTA review is a reduced outlay for underperforming products and a greater
use of evidence based medicine to drive patient centred outcomes.
3. HTA Review – Setting Reimbursement Level
COOK Medical supports the MTAA submission recommendation that ARTG approval should
be the precursor to any HTA body review of cost-effectiveness (the CMD position is stated
above). The full HTA review should then address the cost-benefit analysis of the given
technology. As any cost argument will invariably be constructed around a price for the
technology, the information necessary to determine an appropriate reimbursement level will
be considered by the HTA body. On this point, COOK differs from the MTAA position that
the reimbursement phase follows the HTA body findings. COOK sees the cost being set at the
level of the HTA body. However, COOK wholly endorses the requirement that any body
setting a reimbursement benefit be truly independent of the major stakeholders in the
reimbursement process - Sponsor, Government, Health Fund.
COOK Medical supports the ongoing use of ARDRGs for the setting of
funding/reimbursement levels for the use of devices/prostheses in the public hospital setting.
However, under any new HTA assessment, there is a requirement these ARDRGs be
reviewed more often than every two years due to the pace of innovation in the medical device
HTA Review – COOK Australia
industry. One such method may be that the ARDRG aspect be considered by the HTA body
whenever a new medical device innovation has the potential to influence a current ARDRG.
An example of the limitation in the current system is highlighted by a patient that has both an
abdominal aortic aneurysm and a separate iliac aortic aneurysm. The endovascular treatment
of this patient requires that two separate stent grafts be delivered in the same procedure. The
current ARDRG for 'complex aortic repair or dissection' allows approximately $x per
individual repair procedure. However, for the patient case stated, the patient would require at
least 2 separate prostheses with an approximate cost of 1.5x. Therefore, to cover the total cost
of the devices, the hospital would need to perform 2 separate interventions to obtain funding
of $2x. This situation is not clinically rational due to increased patient morbidity and the
increased risk of mortality associated with two separate procedures performed a month apart
(to permit patient recovery). The clinical risk is primary, but in this scenario, the increased
adjunct hospital theatre, staff and recovery costs are prohibitive when the procedure is
performed twice. This situation could be addressed through the modification of the DRG to
incorporate more complex procedures. It clearly demonstrates the need to embrace rolling
change in ARDRGs and their attendant funding for devices when considering new/improved
devices in HTA.