Medtech firms warn Australian patients may miss out on new innovations due to an overhaul of the nation’s medical device pricing system, but health funds insist a review is crucial to keep a lid on insurance premiums.
The government is considering changes to Australia’s Prostheses List, a database of more than 11,000 medical devices that dictates what health insurers have to fork out if a member receives a treatment such as a joint replacement, pacemaker or stent.
The system’s effectiveness has long been a point of contention, with health funds arguing many devices on the list cost more than their equivalents in the public hospital system or overseas. Device manufacturers argue they have been working to reduce costs, and that an overhaul of the system could end up hurting patient care.
These tensions look to come to a head this year, with the Department of Health releasing a consultation paper on possible ways to reform pricing. This includes a complete overhaul of the system, setting new pricing approaches, removing many items from the list and tougher reviews on devices and their pricing.
Chair of the Medical Technology Association of Australia Ian Burgess warned that some of the changes on the table could have “disastrous” unintended consequences for patients by removing funding certainty for global medtechs in Australia and making it harder for emerging technologies to get coverage.
“Patients won’t have access to new technologies and this is where it has an impact in terms of the broader macro sense of innovation,” he said.
Vice president of Australia and New Zealand for $US158 billion medical device maker Medtronic, Liz Carnabuci, said the company accepts a review of the list is necessary, but warned it must not result in a system where the cheapest option is selected for patients rather than the best fit.
“The key consideration for us is keeping access top of mind.”
The company provides a range of important materials to the Australian market, including listed items for bariatric surgeries. Any changes to pricing must also ensure new products can be funded to come to market, she said. “The key thing from Medtronic’s point of view is this system allows access to key technology and innovation.”
However, private health insurers reject the idea that overhauling the system will block access to innovative products. In 2019-20, 3.1 million medical devices were delivered to Australian patients at a cost of $2.1 billion to insurers, representing 14 per cent of hospital benefits paid out annually. Listed insurers argue the pricing of many items puts further pressure on premiums.
Medibank Private group executive in healthcare and strategy, Andrew Wilson, said the fund supports any changes that “eliminate the higher expenditure on medical devices in the private system compared to the public hospital system and comparable international markets”.
“The attractiveness of Australia for R&D and fairer prices for Australian consumers should not be mutually exclusive. Further, the reforms we are seeking would have no impact on the choice of medical devices available to either clinicians or patients,” he said.
Managing director of ASX-listed fund Nib, Mark Fitzgibbon, said the argument that reforms to pricing could reduce patient choice is “misinformation”.
“Australians are simply paying way over the odds within the private system and it has an enormous inflationary pressure upon premiums,” he said.
“Doctors will continue to make decisions about the care for their patients, will naturally demand the best devices and technology, and Australia is a very attractive market.”
The nation’s biotechnology lobby group, AusBiotech, warned on Tuesday that tightening of the prostheses pricing system could also end up impacting small businesses in Australia who are developing devices not yet listed for use.
“While the prostheses list is often thought to be applicable only to multinational companies, AusBiotech members are typically SMEs locally developing new technologies, many of which will be destined for inclusion on the list,” the group said in a briefing to members.
Insurers and companies have until Monday 15th to weigh in on the government’s consultation on the system.
Start the day with major stories, exclusive coverage and expert opinion from our leading business journalists delivered to your inbox. Sign up here.
Source: Thanks smh.com