May 13, 2020 – The FDA created the Breakthrough Devices Program in 2017 to expedite product development and review for those devices which have the greatest potential impact on patient care. The FDA uses the following criteria in deciding if a device should receive breakthrough designation:
- The device provides for more effective treatment or diagnosis of life-threatening or irreversibly debilitating human disease or conditions.
- The device meets at least one of the following:
1. Represents breakthrough technology.
2. No approved or cleared alternatives exist.
3. Offers significant advantages over existing Approved or Cleared alternatives.
4. Device availability is in the best interests of patients.
Importantly, the Breakthrough designation can be used for devices on any FDA pathway: 510(k), De Novo or PMA. Companies wishing to be considered for Breakthrough designation need to submit an application for their product to the FDA. The FDA will respond within 30 days. Of the first 100 Breakthrough Device applications submitted to the FDA, 71 received Breakthrough status. There may soon be a more significant benefit to the Breakthrough designation: mandated insurance coverage for 3-4 years. Today, it is a long process to obtain a Current Procedural Terminology (CPT®) or other reimbursement code for a new medical device that does not fall under an existing code. Once a new product without a code receives FDA Clearance, physicians and hospitals will submit claims under “unassigned” codes that insurers will almost always deny. Device manufactures can present the rationale for coverage of their devices to insurers, but success requires very strong published clinical data. For this reason, physicians and hospitals are reluctant to purchase new devices that don’t yet have specific codes, and insurers and medical societies are reluctant to create new codes for devices and procedures that have not gained widespread adoption. Even if the strength of published data supports the creation of a new code, the process of gaining the support of relevant medical societies and the American Medical Association frequently takes 3-4 years. This long and expensive road to reimbursement may soon change for Breakthrough devices. The Office of Management & Budget (OMB), which is part of the Office of the President, is considering adoption of a policy requiring Medicare and other insurers to provide insurance coverage for 3-4 years for medical devices receiving the Breakthrough designation. This 3-4 year period would be for evidence development that would support permanent insurance coverage.
TCG Partner Nat Bowditch attended a private presentation by Mark Leahy, the President of the Medical Device Manufacturer’s Association (MDMA) regarding this breakthrough designation.The MDMA believes President Trump will enact this reimbursement requirement in September or October (i.e. ahead of the general election) to be able to cite it as an example of things the administration has done to speed access to the latest medical technology. If the OMB policy is adopted, it will place a much greater premium on having the Breakthrough designation. For this reason, once the rule is implemented, the FDA may become more stringent is awarding the Breakthrough designation. TCG assists medical technology companies to determine whether use of its new medical device will fall under an existing code(s) or if a new code may be required. Contact us today to learn more about how TCG can help determine if your product qualifies for a Breakthrough designation which may soon be a fast track to reimbursement.
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Advising Life Science Companies for Growth
Founded in 1998, TCG is an international business consulting firm serving medical device, imaging, diagnostic, digital health and health IT companies from its offices in the USA (Research Triangle Park, North Carolina, San Francisco and San Diego, California) and Europe (Heidelberg, Germany). TCG assists its clients to accelerate their journey to success by providing strategic advisory services across many critical needs: market entry, key opinion leader engagement, product launch, business development, reimbursement and regulatory pathway assessment, distribution channel development, and improving organizational effectiveness. We expand our clients’ reach and company resources by finding new partners and financing sources. We help build new organizations and teams to execute on new opportunities. Our goal is to power our clients’ growth and long-term success.