The medical technology industry plays a pivotal role in improving the lives of people and communities across the world. Medtech companies employ thousands of researchers on the frontlines of medical discovery, researchers who draw on astounding knowledge and creativity to tackle every health challenge imaginable, including the ongoing COVID-19 pandemic. Their health care breakthroughs have delivered so many of the medical advances we enjoy today, and they’re delivering the promising technologies of the future. Nevertheless, unequal access to such technologies and, more broadly, health care services continues to persist – often disproportionately impacting the lives of racial and ethnic minorities.
AdvaMed has developed several principles to guide of our health equity work. Among them is a principle advancing access to technologies that improve patient lives. AdvaMed is committed to advocating to ensure all patients are aware of the utility and availability of devices that best address their medical conditions.
In order to learn more about how medtech companies can help promote equitable access to medical technology and associated care, we reached out to Joseph Metro (Joe), a partner in Reed Smith’s Life Sciences Health Industry Group in Washington, D.C. He gave us a better understanding of how medtech manufacturers can form company-specific patient assistance programs (“PAPs”). And on October 27, 2020, AdvaMed hosted a webinar on the topic to help educate our members. Listen to the recording.
Below is a preview of our discussion with Joe in the week leading up to the webinar:
Chris & DeChane: The pharmaceutical sector has a robust history of sponsoring PAPs that promote equitable access to medications. Why are PAPs that promote equitable access to medical technology less prevalent in the device sector?
Joseph Metro: The pharma sector has indeed been active in PAPs for several decades, with the earliest OIG advisory opinions being issued in the early 2000s. The prevalence of activity in the pharma sector is likely due to its relative simplicity compared to the device sector. Distribution pathways, claims processing systems, third party benefit designs, and cost sharing structures are relatively uniform for pharmaceuticals, and payment methods are often tied to widely available data metrics such as average wholesale price or wholesale acquisition cost. By contrast, devices are distributed through non-uniform channels (ranging from direct-to-consumer to inpatient hospital), sometimes they are diagnostic rather than therapeutic, and payment and cost sharing methods vary widely (including per claim reimbursement to bundled capital and operating payment methods). So, while there is something of a “PAP playbook” within the pharma sector, device solutions almost necessarily will involve customization in light of the nature of the product in question.
Chris & DeChane: When designing a company-sponsored PAP, what are the top three considerations a medtech manufacturer should take into account?
Joseph Metro: First, it is important to consider structure and governance in light of how the PAP will “fit” within a company’s overall goals – should it be managed as part of existing corporate charitable activities, or part of a separate organization? Second, of course, are the actual eligibility criteria and benefits to be made available in light of the nature of the product. Finally, it is critical to take into account health care regulatory compliance issues such as antikickback and beneficiary inducement laws, and there is a robust history of OIG guidance on that front.
Chris & DeChane: What unique challenges are likely to present themselves when considering benefit design for the device sector?
Joseph Metro: Of course, the device sector will share some of the same challenges that are faced by the pharma sector, such as whether and how programs to provide patient cost sharing assistance to federal program patients can be designed. (The key factor there may be rigorous adherence to charitable principles in the design, communication, and operation of such programs). But beyond that, the unique challenges often arise from the devices themselves. For example, while a pharma program might provide a free drug to a financially needy individual, a manufacturer of capital medical equipment or of surgical implants cannot simply provide those items to a patient. Thus, PAP solutions for devices are likely to require both creative thinking regarding how to make the benefits of a product available for a patient (for example, perhaps providing benefits through health fairs or a voucher for a procedure in which the device is used) as well as solid operational execution in relationships with health care providers whose participation may be necessary to delivery of the benefit (such as ensuring that the program does not result in an windfall duplicate payment to the provider which could be construed as a kickback).
Chris & DeChane: What are some of the PAP models that have been adopted by the pharmaceutical sector? Can any of these PAP models, with minor adjustments, be adopted by the device sector?
Joseph Metro: The pharma sector has a wide variety of programs designed to do different things, sometimes for very specific populations – so many that I’ve had to develop my own taxonomy to try to ensure that there is a consistent understanding of what is contemplated by clients. Pharma programs may be charitable or non-charitable, and include free products to indigent or uninsured patients, both product-specific and disease state patient cost-sharing support programs; “bridge” programs to try to expedite access to critical therapies and maintain continuity of therapy in the event a patient’s insurance status changes, and direct-to-patient low-priced sales programs. There are some types of programs (indigent free goods) that may be adapted relatively easily for certain types of products, and there are others that may be more complicated. But even for this latter group, the OIG’s prior guidance provides some useful principles that can assist in design.
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