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TRANSCRIPT
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March 28, 2007
Medical Device Regulatory, Reimbursementand Compliance Congress
Steve UblPresident and CEOAdvaMed
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• About AdvaMed
• The Public Policy Environment
• AdvaMed’s Priorities for 2007
Overview of Remarks
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About AdvaMed
• World’s largest medical technology association
• 1,300+ member companies and subsidiaries
• Members produce 90% of sales in domestic market,50% of sales in global market
• 70%+ of member companies have less than$30 million in annual revenue
• 70 staff with global expertise, bi-partisan backgrounds
• 45 member Board of Directors (BD, Siemens, Philips,Medtronic, Johnson & Johnson, GE, Boston Scientific,Roche, etc.)
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AdvaMed’s Daily Focus
Appropriate Regulation
+
Adequate Reimbursement
+
Access to Global Markets
=
Patient Access to Benefits of Medical Technology
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Defining AdvaMed’s Role
Design Clinical Review
Idea through FDA: 2-6 yrs
Coverage Payment
Coding
Cov & Paymt: 0-6
JapanCanada
UKKoreaGermany
MexicoChina
IndiaFrance
Think Tanks
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Policy Environment
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Policy Environment
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Policy Environment, cont’d
The Legislative Front
• More industry oversight
• Critically important legislation pending― Federal budget proposal with deep Medicare cuts― SCHIP― Physician Fee Fix
― Consideration of MDUFMA, PDUFA, drugsafety, others will mean major FDA bill
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Priorities for 2007
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Regulatory Policy
MDUFMA Reauthorization
Issues with MDUFMA I• Unpredictable and unexpectedly high fee increases from year-
to-year
• “Clock-stopping” behavior due to cycle goals
• FDA focused on goals rather than interacting with applicants
Outlook for MDUFMA II• Agreement in principle reached with FDA
• Reduced fees across the board for applications
• Sets forth a user fee structure that instills more predictability in to the year-to-year increases in fees
• Provides important performance goals to significantly reduce application review times while ensuring safety and efficacy
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Regulatory Policy, continued
• Post Market Regulation– Inappropriate comparison between drugs and devices
– AdvaMed working to• Assist FDA in streamlining and “connecting the dots” with
adverse event reports
• Establish clearer criteria for communicating risk– Limit use of “recall” to appropriate situations
• Develop flexible approach to Unique Device Identifiers (UDI)
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Key Payment Rules
• Inpatient Round II― Severity weighted diagnosis related groups (DRGs)
― Hospital-specific relative values (HSRVs)
― Charge compression adjustment possible
• Competitive Bidding― Potential for cheapest is best approach to technology
― Inappropriately group different technologies together forbidding purposes
― Could deny patients access to best care
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Value-based Purchasing
• Legislative initiatives likely – demonstrations ongoing― advocated by key health policy makers / analysts
• If done correctly― Improves quality
― Enhances diffusion of innovative technologies
― Rewards quality and efficiency
• If done incorrectly― “Efficiency” can become code for “cheapest is best”
― Freezes technology in place
Value = Price + Quality
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Key Legislation
• Remote Monitoring― Prime example of payment policy not keeping pace
with technology
― Offers physicians real-time, remotely accessedpatient information
― Provides homebound and rural patients 24/7 link to health care
― Legislation would eliminate disincentives in current Medicare rules that only provide payment for face-to-facemeetings between patients and their doctors.
Patient using an ECG/Rhythm strip recorder, a blood pressure cuff and a TeleStation that sends data via modem from the telestation to a server, then on to the care manager. Courtesy: Philips
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Key Legislation, cont’d
• Diagnostics― Lab tests account for >70% of treatment decisions, but are less
than 2% of Medicare costs
― Horse and buggy payment policy in the age of molecular medicine
― Legislation establishes new payment mechanism for moleculardiagnostic tests based on resource use and value
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Health Reform Principles
• Expand health coverage to all, so that every American can have access to the best medicine has to offer
• Improve the efficiency and quality of health care– Quality of care highest priority– Control cost the right way: lift the burden of
disease and improve efficiency• Prevention• Quality• Efficiency• Medical innovation
Shaping the future instead of being shaped by it.Shaping the future instead of being shaped by it.
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International Top Line
• Nascent health care economies: China, India
• Japan: Foreign reference pricing
• EU: DRGs and procurement policies
– Europeans have followed US model for hospital payment based DRGs (France, Germany, UK, Italy)
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Partnership Development
•Enhance partnerships with patient, physician, and hospital groups to enhance advocacy efforts
Industry Reputation
Compliance and Code of Ethics
• Increase outreach and education
• Firmly establish logo license as compliance icon
• Develop other tools / programs to help ensure appropriate HCP relationships
Value of Technology
•Increase volume and frequency to solidly embed core messages
•Broaden channels through partnerships
•Post market reg.
•Value of FDA risk-based approach
Integrity of FDA
Build Industry Reputation
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Telling our story
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March 28, 2007
Medical Device Regulatory, Reimbursementand Compliance Congress
Steve UblPresident and CEOAdvaMed