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Applied Health Economics and Health Policy

, Volume 17, Issue 4, pp 421–431 | Cite as

Why is There Discordance between the Reimbursement of High-Cost ‘Life-Extending’ Pharmaceuticals and Medical Devices? The Funding of Ventricular Assist Devices in Australia

  • Sopany SaingEmail author
  • Naomi van der Linden
  • Christopher Hayward
  • Stephen Goodall
Current Opinion

Abstract

New health technologies often yield health benefits, but often at a high cost. In Australia, the processes for public reimbursement of high-cost pharmaceuticals and medical devices are different, potentially resulting in inequity in support for new therapies. We explore how reimbursement is different for medical devices compared with pharmaceuticals, including whether higher cost-effectiveness thresholds are accepted for pharmaceuticals. A literature review identified the challenges of economic evaluations for medical devices compared with pharmaceuticals. We used the ventricular assist device as a case study to highlight specific features of medical device funding in Australia. We used existing guidelines to evaluate whether ventricular assist devices would fulfil the requirements for the “Life-Saving Drugs Program”, which is usually reserved for expensive life–extending pharmaceutical treatments of serious and rare medical conditions. The challenges in conducting economic evaluations of medical devices include limited data to support effectiveness, device-operator interaction (surgical experience) and incremental innovations (miniaturisation). However, whilst high-cost pharmaceuticals may be funded by a single source (federal government), the funding of high-cost devices is complex and may be funded via a combination of federal, state and private health insurance. Based on the Life-Saving Drugs Program criteria, we found that ventricular assist devices could be funded by a similar mechanism to that which funds high-cost life-extending pharmaceuticals. This article highlights the complexities of medical device reimbursement. Whilst differences in available evidence affect the evaluation process, differences in funding methods contribute to inequitable reimbursement decisions between medical devices and pharmaceuticals.

Notes

Author Contributions

SS, NvDL and SG designed and wrote the manuscript; CH reviewed the manuscript and provided clinical input. All authors read and approved the final manuscript.

Compliance with Ethical Standards

Funding

This research is supported by an Australian Government Research Training Program Scholarship.

Conflict of interest

Sopany Saing and Stephen Goodall have no conflicts of interest that are directly relevant to the content of this article. Naomi van der Linden is employed by AstraZeneca Netherlands. Christopher Hayward has received honoraria and grants from Medtronic LLC unrelated to the current article. Christopher Hayward has received travel support to attend meetings and speak at meetings sponsored by Novartis AG and Medtronic LLC, unrelated to the current article. St Vincent’s Hospital owns patents licensed to Medtronic LLC unrelated to the current article.

Data Availability

Data sharing is not applicable to this article as no datasets were generated or analysed during the current study.

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Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  1. 1.Centre for Health Economics Research and Evaluation (CHERE)University of Technology SydneySydneyAustralia
  2. 2.Erasmus School of Health Policy and ManagementErasmus University RotterdamRotterdamThe Netherlands
  3. 3.Heart Failure and Transplant UnitSt Vincent’s HospitalSydneyAustralia
  4. 4.Victor Chang Cardiac Research InstituteSydneyAustralia

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