REIMBURSEMENT Considerations for early stage Life Science Companies Jo-Ellen Slurzberg

1. Getting paid for your technology:
Reimbursement considerations for
early stage life sciences
companies
February 25, 2016
Jo Ellen Slurzberg
V.P. Global Health Policy
JR Associates
j.slurzberg@1jra.com

2. JR Associates Not Reproducible Without Permission 22016
Where products fit in the world of
“reimbursement”?
IT
Cloud
EHR
Telemedicine
Remote
Monitoring
Disease
Management
Payer driven
Provider driven
Medical
Devices
Drugs
Diagnostics

3. JR Associates Not Reproducible Without Permission 3
Defining Reimbursement
Reimbursement
Coverage:
The scope of
services for which
a payer will pay
Coding:
The language that
describes a medical
encounter
Payment:
Remuneration for
services and/or a
medical encounter
Health
Economics:
Science of
assessing costs and
benefits of medical
interventions and
the flow of money
through the health
care system
FDA clearance or approval is not a guarantee of achieving
reimbursement and evidence requirements may be different
2016

4. 4
Payers reimburse but Providers bear the financial risk
Payers are focused on
safety, clinical
outcomes,
accreditation of
facilities and physicians
Payers establish
coverage and payment
policies- shifting risk to
the provider
Payers use fixed-rate
prospective payment
systems to reimburse
hospitals for
procedures and
services; payment is
global based on
patient episode of
care, not itemized
Payers use fee
schedules to reimburse
physicians where
financial incentive is
volume; increasingly,
use risk contracts to
pay per member and
share savings and
encourage efficiency
JR Associates Not Reproducible Without Permission2016
Providers have new
technology committees that
conduct robust review of
new technology: clinical
evidence, outcomes,
efficiencies, safety, cost
relative to reimbursement
Invest in IT and capital
technologies that improve
business and create
efficiencies but are not
“reimbursed”

5. 52016
The “buzz” about perfect technologies….
My device is better than current
treatments and is cost effective….
… It is going to save the FILL IN THE
BLANK [payer/hospital/society] money
so we are going to price it at a
premium…
Good news… we think
there is a code…..
We are planning a small case
series trial after 510(k) clearance…
Do you have clinical evidence to support
superiority and cost effectiveness? Prove
it!
Hmm.. Based on what? Where there is a code
there is a payment- can you live with it? And
what about benefits and coverage?
Who is the purchaser? Do they save,
too? Who is entitled to the “savings”?
Even if FDA doesn’t require a trial, payers
and providers want to see validated
clinical evidence.
What you say…. What we hear….
JR Associates Not Reproducible Without Permission

6. The Product Development Cycle
Reimbursement takes time- do not expect to have reimbursement at
launch so forecast accordingly
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NDA, BLA, or PMA
FDA Approval &Post-
Market/Registry
Phase
III/Pivotal
Phase I/II or
PilotPreclinical/FHU
Post clearance
clinicals and
launch
Regulatory
clearance/ CE
mark
510(k)/CE
submission
Predicate
testing/pilot
study
• Collect
reimbursement data
in clinical studies
• Coverage for
clinical trial
• Presentations &
publications; KOL
development
• Coverage and code
plan for launch
• Reimbursement
implementation
• Develop
reimbursement
strategy and
integrate it into
development
timeline
• Publication plan
• KOL identification
Other Devices and Diagnostics/ 510(k) and CE Mark
2016
• Portfolio prioritization
• Assess global
reimbursement
environment and
price potential
• Business plan
including
reimbursement