MTAA CEO addresses most pressing issues impacting MedTech sector

MedTech News: At the recent ARCS conference 2021, Ian Burgess, CEO of Medical Technology Association of Australia (MTAA), provided insights on the recent Budget announcements, Prostheses List (PL) reforms, industry policy issues and the Zimmerman parliamentary inquiry which are impacting the MedTech sector.

Mr Burgess said “MTAA led the process of engaging with governments around securing the supply of essential medical devices and equipment during COVID-19. It was an outstanding process in terms of the collaboration within industry and between industry, governments and other key stakeholders. It really was inspiring to be a part of that.”

Mr Burgess noted that to encourage greater sovereign manufacturing capability, it is essential that the government focuses on what needs to be achieved from a global competitiveness perspective and policy frameworks including a fit-for-purpose reimbursement and regulatory access. It is about having the right policy initiatives in ensuring Australia can compete at the global level.

The recent Budget announcement included updates to the Patent Box and PL reforms.

“On the Patent Box, we started collaborating with AusBiotech in 2015, so it has been a long time coming. The devil is in the detail in terms of ensuring that the development of the details and its implementation actually achieves what it’s intended to achieve,” Mr Burgess said.

The announcement to retain the PL was in itself a win for the sector, given that the Department of Health and private insurers were seeking for it to be abolished. There will be a consultation process and a benefit review mechanism that aims to compare PL benefits to public pricing. There will be phased price reductiosn that will takes place and there will be consolidation of group structure in the PL.

Despite the campaign of falsehoods led by corporate health insurers, the MedTech industry has repeatedly delivered savings to ensure the sustainability of the private healthcare system. It has been MedTech innovators that have been the sole financial contributor to keeping private health insurance premium increases to their lowest level in 20 years and on track to deliver savings of $1.2 billion.

“The latest Australian Prudential Regulatory Authority (APRA) data shows that the PL expenditure fell by 5% in the year to March, including general miscellaneous which fell by 10%.

“General miscellaneous has been a particular area of focus by private health insurers who have been misrepresenting increased utilisation as either a systemic failure or inappropriate behaviour by clinicians, hospitals and MedTech companies.

“The data also showed that the average PL benefits are now 14% less than four years ago, and the PL represents just over 9% of total private health insurance benefit payments. This highlights that the total spend is falling, the average pricing is falling and the proportion it represents of total private health insurance expenditure is falling,” he said.

Mr Burgess continued “Medical technology is the only part of the private health sector that has incurred revenue reductions for the specific purpose to directly benefit private health insurers. This is a key issue of the reform of private health insurance. There is an over reliance placed on the PL and the savings that it can achieve. There is also too much emphasis being placed on further medical device pricing cuts when the metrics show that’s not the solution for private health insurance.”

The PL reforms aim to reduce the medical devices price gaps between the public and private sectors. It must be recognised that there are differences between the private and public markets in terms of costs of supplying and servicing in the private market as it can be more expensive.

“There is a good reason as to why there should be a differential in the pricing between the private and public markets and we can’t simply move to parity between the two levels,” stated Mr Burgess.

On the other hand, the Australian Private Hospitals Association (APHA) said recently that it was concerning to see no reduction in the so-called “Deferred Claims Liability” (DCL) in the last three months, with health insurers still sitting on $1.8 billion – essentially money insurers collected as premiums but did not pay out as claims due to COVID-19 restrictions.

Mr Burgess added “At the same time, we have increasing concerns regarding the private insures’ push for managed care. This is happening in the area of short stay arthroplasty. The Australian Orthopaedic Association (AOA) is very concerned around financial incentives that insurers are seeking to put in place that impacts on clinical decision making.”

This is occurring in areas such as buying groups and in terms of vertical integration where private health insurers are buying hospitals. It ultimately would result in reduced surgeon choice and patient access to technology.

At the Zimmerman parliamentary inquiry, MTAA championed patient access and improvements for the Australian MedTech sector. According to Mr Burgess there are a large portion of novel medical devices that will continue to come through global supply chains, however there is significant space in the market for Australia to further invest in a strong, competitive local industry.

The MTAA indicated that despite some progress with novel technology priority reviews and considerations of other regulatory approvals, the system requires further resourcing and more flexible approaches to efficiently assess new and innovative technologies for reimbursement using post-market real world evidence for timely access.