Comparative Effectiveness Hits Medical Devices
Converging provider, payor and regulatory forces are making comparative effectiveness and evidence of value top priority issues for device companies.
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This February, Medtronic. announced it was canceling five cardiovascular and orthopedic contracts-reported to be worth $2 billion a year-with GPO Novation, which negotiates deals on behalf of more than 1,600 hospitals. The action has the potential to change how product contracts with hospitals are negotiated, but at this point, it is hard to say if it represents a burgeoning trend that others will follow or just another mêlée in the long history of turbulent device manufacturer/GPO relations.
A decade ago, the treatment of vertebral compression fractures (VCF) represented one of the fastest - and most innovative - segments of a spine industry that was set to explode. The two principal procedures - vertebroplasty and its distant cousin kyphoplasty - presented surgeons and interventionalists with a minimally invasive option to stop pain and, in the case of kyphoplasty, restore the shape and form to a broken vertebra. Now, two studies published in The New England Journal of Medicine suggesting that vertebroplasty procedures were no more effective in relieving pain than a placebo treatment have put pressure on VCF companies and doctors, who are facing pushback on reimbursement and some skepticism from even their own specialists.
In many US hospitals, materials, purchasing, and supply chain executives often have the clout to influence thumbs-up or thumbs-down decisions on most new products that enter the building. That is one major reason why medical device manufacturers are waking up to the fact that so-called "me-too" items and minor upgrades to existing products aren’t as acceptable to hospitals as they once were. But in the evolving market in materials office supplies, smart manufacturers with a clear path to working alongside materials executives offer products that keep costs down, add to patient safety, and enhance patient care.