Medical Device Reimbursement in Canada

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  • 1. Medical Device Reimbursement in Canada Medical Device Reimbursement in Canada How to navigate the Canadian medical device reimbursement system to meet your compensation targetsASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 2. Medical Device Reimbursement in Canada • Canadian reimbursement opportunities • Healthcare system and coverage • Provincial plan and other payers • Health Technology Assessments • Procurement rules and regulationsASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 3. Medical Device Reimbursement in Canada Challenges in Canadian Healthcare Today 1. Defining Effective Health Interventions 2. Financing Healthcare 3. Providing Cost Effective Care /InterventionsASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 4. Medical Device Reimbursement in Canada Market Access Hurdles in Canada Traditional Hurdles Economic Hurdles Safety Cost-effectiveness Efficacy Affordability QualityASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 5. Medical Device Reimbursement in Canada Market Access Hurdles, cont’d. Technology adoption economic hurdles •Canada Health Act •Competition for budgets •Higher product expenses/costs •“Siloed” funding mechanismsASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 6. Medical Device Reimbursement in Canada • Universal access to healthcare: All Canadians covered • Aging population: Increased rates of “lifestyle” diseases • Key challenges : • Extended wait times leading to limited access to services • Financing deficitASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 7. Medical Device Reimbursement in Canada Canada’s Medical device sector market generated over $6 billion in sales in 2009 and has experienced a sustained growth of CAGR 4.9% since 2005 Canada is the 9th largest healthcare market in the world The medical device sector consists of approximately 1,500 firms: manufacturers, global companies and local distributors, and employs over 35,000 peopleASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 8. Medical Device Reimbursement in Canada •Population: 34 mil. •10 provinces, 3 territories .516 M •530 hospitals nationwide 4.2MM .138 M 3.2 MM 1MM 8 MM 1.2 MM 13 MM 1M .752 MASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 9. Medical Device Reimbursement in Canada Healthcare is funded primarily by the Canadian government through a public insurance program, provided through public and private services. Source: various articles, and government publicationsASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 10. Medical Device Reimbursement in Canada Publicly Insured Services (aka Medicare) •Hospitals •Physician services •Access to other institutions •Limited number of other healthcare providers in certain circumstances Provision of these services is mandated by the Canada Health Act. Source: various articles, and government publicationsASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 11. Medical Device Reimbursement in Canada • The Canada Health Act is federal legislation applicable across the country. • The law is overseen by Health Canada and is enforced by the federal government through its power to reduce or withhold fiscal transfers to non-complying provinces. Source; various articles, and government publicationsASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 12. Medical Device Reimbursement in Canada Canada’s national health insurance program is designed to ensure that all residents have reasonable access to medically necessary hospital and physician services on a prepaid basis. Source; various articles, and government publicationsASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 13. Medical Device Reimbursement in Canada Canada has a national program composed of 13 interlocking provincial and territorial health insurance plans, with certain common features and basic standards of coverage, stipulated through the Canada Health Act. Source; various articles, and government publicationsASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 14. Medical Device Reimbursement in Canada •Administration of healthcare is primarily a provincial responsibility. •Provincial health ministries are responsible for administration, management and delivery of healthcare services.ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 15. Medical Device Reimbursement in Canada Provincial/Territorial insurance programs must fulfill five principals: 1. Public Administration: operating on a non-profit basis as a public authority 2. Comprehensiveness: program must cover all insured health services provided by hospitals, physicians or dentists 3. Universality: all insured residents must be equally covered 4. Portability: residents can keep their coverage if they emigrate/travel outside their home provinces 5. Accessibility: residents have the right to reasonable access to medically necessary services unimpeded by fees or extra billingASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 16. Medical Device Reimbursement in Canada The following barriers to reimbursement often challenge medical device manufacturers in the Canadian market: • Highly fragmented reimbursement system across Canada •Highly fragmented reimbursement system across Canada • •In spite of of high healthcare spending,to medical devices anddevices In spite high healthcare spending, access access to medical technology in Canada ranks below other OECD countries* and technology in Canada ranks below other OECD countries** Source: Conference board of Canada, An International comparison of health care system, 2007ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 17. Medical Device Reimbursement in Canada Medical device reimbursement segment Hospitals and GPOs 70% of market Regional healthcare Third party authorities payers Patients Business is awarded through RFP and tenderASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 18. Medical Device Reimbursement in Canada In most cases the principal payers are the provincial and territorial public insurance groups that influences the purchasing decision through their reimbursement policies.ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 19. Medical Device Reimbursement in Canada Federal Government: Regulator Provincial Government: Administrator •Professional Fee •Technical Fee •Coverage •Payment to Physician •Hospital Budget •Drug Plan Source; various articles, and government publicationsASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 20. Medical Device Reimbursement in Canada What’s Next ? So, you have an amazing technology, robust clinical data and peer-reviewed papers. You have your licenses, understand the healthcare system and have a presence in Canada. Then what?ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 21. Medical Device Reimbursement in Canada • Adoption and diffusion of technologies are controlled by budgetary caps (federal, provincial and/or regional) • Provincial governments directly or indirectly influence: – who can purchase the medical technology – where it can be installed – how many healthcare professionals will be accessible to operate the technologySource: Health Technology Assessment in Canada and the G-7 Countries: A Comparative Analysis of the Role of HTA Agencies in the Decision-Making ProcessASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 22. Medical Device Reimbursement in Canada Important: Provinces are not obligated to provide services not listed in the Canada Health Act, and such services are affected by provincial policies: •Physiotherapy •Dental Coverage •Prescription Medicines •Vision CareASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 23. Medical Device Reimbursement in Canada If you are a medical device manufacturer and the device that you sell is not covered through the regional reimbursement plan, your chance of selling to hospitals and other end users is significantly diminished.ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 24. Medical Device Reimbursement in Canada • Hospitals are autonomous institutions, usually non-profit organizations that are generally governed by local health authorities • Most hospitals are governed by a board of directors that has legal and management responsibility for the hospital and is accountable to the provincial health ministry for the use of provincial funding • The system is publicly funded but delivered by private actors - HospitalsASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 25. Medical Device Reimbursement in Canada Budgets Hospitals receive an annual global operating budget as a lump sum from the government based on factors such as: •Past allocations •Characteristics and size of population served •Priorities •ExpertiseASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 26. Medical Device Reimbursement in Canada • Special program funding may be available for new or expanded programs, and for specialized high cost services and treatments • Hospital Research Fund: possible source of funding within the hospital as well as Hospital foundation, mainly for capital equipment These budgets will be used by early adopters to have access to new technology and drive uptake, which will help get full coverage and reimbursementASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 27. Medical Device Reimbursement in Canada • Most hospitals are now part of large purchasing groups and firms that represent close to 35% of healthcare facilities. • Physicians still have significant influence in the adoption of new and innovative technologies, but are not involved as much in the purchasing decisions for commoditized equipment and supplies.ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 28. Medical Device Reimbursement in Canada Medical device Manufacturer Commoditized equipment and supplies New and innovative technologies Economic rationale program and/or HTA Public tender/ procurement rules MoH/ Regional Health authorities/Hospitals PatientsASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 29. Medical Device Reimbursement in Canada Hospital Economic Rationale Clinical outcome / clinical utility Value Demonstrate operational and financial impactASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 30. Medical Device Reimbursement in Canada Economic Rationale Story / Briefing Hospitals MoHLTC and Agencies Patients Sales & marketing Government relations Stakeholder relations Early adopters, KoL’s and Policy makers Advocacy group centres of excellence…. partnerships Medical associations Hospital & Regional health PR campaign authorities Healthcare networks Media story Materials management Government agenciesASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 31. Medical Device Reimbursement in Canada • Health Technology Assessments (HTA) are conducted by many agencies across Canada • Assessment can vary across jurisdictions due to needs: – Different provincial/regional priorities – Data requirements • (e.g., clinical, cost effectiveness and societal outcomes) – Timeliness – rate of innovation/obsolescence – Clinical champion initiates process for product reimbursementASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 32. Medical Device Reimbursement in Canada Federal Initiatives •Canadian Agency for Drugs and Technologies in Health (CADTH) Provincial Initiatives •Ontario: Ontario Health Technology Advisory Committee (OHTAC) •Quebec: L’Institut national d’excellence en santé et en services sociaux (INESS) Hospital InitiativesASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 33. Medical Device Reimbursement in Canada New products/procedures need to be justified clinically and economically. •Government/hospital/health authorities may request HTA reviews •Early adopters or clinical champions may also initiate the HTA process •Positive HTA reviews can increase the chances for successful reimbursementASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 34. Medical Device Reimbursement in Canada What happens after the assessment – how do technologies get adopted? HTAs need specific information to help answer critical questions about performance benefits at the institutional level: • How will this innovation help to improve patient care in my hospital? • Reduce costs? • Decrease waiting lists? • Improve efficiency?ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 35. Medical Device Reimbursement in Canada About 65% of Canada’s population is covered by third-party health plans. These plans cover and pay for services such as: •Dental •Physiotherapy •Chiropractic •Vision Care •Long-term Care •Prescription DrugsASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 36. Medical Device Reimbursement in Canada •Some private insurers will reimburse select medical devices •Insurers will require lots of information from physicians and manufacturers •If device needs to be used within an acute care facility, it most likely will not be coveredASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 37. Medical Device Reimbursement in Canada • Whether or not manufacturers may charge patients directly for devices (such as implanted devices) depends on whether the costs of the devices themselves are covered by provincial health programs • In the past, many device costs were paid by hospitals out of their global budgets.ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 38. Medical Device Reimbursement in Canada • Hospitals are now stocking only certain devices, and provincial governments are in some cases stating that patients may not pay privately for more expensive alternative devices • In addition, in some provinces there are programs that subsidize the cost of certain patient devicesASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 39. Medical Device Reimbursement in Canada Provincial Regulations • Rules cover the purchase of goods and services using public funds and are aimed at ensuring fair, open and competitive procurement practices in the broader public sector • Apply to GPOs, Hospitals and to the broader public sector.ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 40. Medical Device Reimbursement in Canada • RFP/Tender mostly for commodity products or accepted procedures and devices: – Stents, Catheters, scopes, gloves, wound closure • Criteria: – Clinically acceptable – Value – Budget impactASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 41. Medical Device Reimbursement in Canada Large Group Purchasing Organizations (GPO) can purchase up to 35% of devices sold in Canada. •Contract opportunities are posted on a fee-based public procurement website or electronic bulletin board •Registration is required with electronic bulletin boards and GPOs •Provide response to RFPASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 42. Medical Device Reimbursement in Canada Summary •Technology alone does not sell—it is the manufacturer’s responsibility to provide and promote adequate data to decision-makers •Cash is KING •Be patient •Reimbursement generates revenue •The faster you can move your products through regulatory and reimbursement approval, the longer you generate profit •The Canadian reimbursement market is fragmentedASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 43. Medical Device Reimbursement in Canada • A good thorough analysis of your position and complex strategies are required. • Manufacturer may have to develop different strategies for the same product in each jurisdiction. • The ultimate consumer of a medial device is the healthcare facility and the payer is the Government. • Product strategies should demonstrate benefits to helping hospitals address government priorities.ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 44. Medical Device Reimbursement in Canada Thank you for your time. Additional resources Emergo Group webinar on Canada’s medical device Stephane Taillefer registration process: Senior Consultant http://www.emergogroup.com/resources/videos-canada-approval Emergo Group Canada Consulting, Inc. Regulatory chart outlining the Canadian medical device approval process: staileffer@emergogroup.com http://www.emergogroup.com/literature Canada office: Link to major Canadian medical device regulations: +1.604.909.1265 http://www.emergogroup.com/resources/regulations-canadaASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
  • 45. Medical Device Reimbursement in Canada Canada Venture Caputal Association (CVCA). (n.d.). Industry Statistics. Retrieved December 21, 2010, from http://www.cvca.ca/resources/statistics/ Canadian Health care Association. (2009). Home Care in Canada: From the Margins to the Mainstream. Canadian Institute for Health Information (CIHI). (2007). Medical Imaging in Canada. Canadian Institute for Health Information (CIHI). (2009). Health Care in Canada: A Decade Review. Canadian Institute, for Health Information. Canadian Institute for Health Information (CIHI). (2009). National Health Expenditure Trends, 1975 to 2010. Canadian Institute, for Health Information Centre for Health Economics and Policy Analysis (CHEPA). (2008). Private Health Insurance In Canada. Centre for Health Economics and Policy Analysis Dibert, S. (2007, June). A complicated Calculus in Canada: An exploration of the Canadian climate for reimbursement and funding of medical devices. Medical Product Outsourcing. Esmail, N. (2008, November). Retrieved December 10, 2010, from Fraser Alert: http://www. fraseramerica.org/researchandpublications/publications/6818.aspx Madore, A. (2005). Private Health Care Funding and Delivery under Canada Health Act. Parliamentary Information and Research Service.earchandpublications/publications/6818.aspx Health Canada. (2007-2008). Canada Health Act.ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com