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Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
How to navigate the Canadian medical device reimbursement system to meet your compensation targets
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
• Canadian reimbursement opportunities
• Healthcare system and coverage • Provincial plan and other payers • Health Technology Assessments
• Procurement rules and regulations
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
Challenges in Canadian Healthcare Today 1. Defining Effective Health Interventions 2. Financing Healthcare 3. Providing Cost Effective Care /Interventions
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
Market Access Hurdles in Canada
Traditional Hurdles
Safety Efficacy Quality
Economic Hurdles
Cost-effectiveness Affordability
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
Market Access Hurdles, cont’d.
Technology adoption economic hurdles
•Canada Health Act •Competition for budgets
•Higher product expenses/costs •“Siloed” funding mechanisms
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
• 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 deficit
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
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 people
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
1MM
1.2 MM 13 MM
8 MM
.752 M
1 M
.516 M
.138 M 4.2MM 3.2 MM
•Population: 34 mil.
•10 provinces, 3 territories
•530 hospitals nationwide
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
Healthcare is funded primarily by the Canadian government through a public insurance program, provided through
public and private services.
Source: various articles, and government publications
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
Source: various articles, and government publications
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.
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
• 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 publications
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
Source; various articles, and government publications
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.
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
Source; various articles, and government publications
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.
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
•Administration of healthcare is primarily a provincial responsibility.
•Provincial health ministries are responsible for administration, management and delivery of healthcare services.
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
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 billing
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
The following barriers to reimbursement often challenge medical device manufacturers in the Canadian market:
• Highly fragmented reimbursement system across Canada • In spite of high healthcare spending, access to medical devices
and technology in Canada ranks below other OECD countries*
* Source: Conference board of Canada, An International comparison of health care system, 2007
•Highly fragmented reimbursement system across Canada
•In spite of high healthcare spending, access to medical devices and technology in Canada ranks below other OECD countries*
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
Hospitals and GPOs
70% of market
Regional healthcare authorities
Third party payers
Medical device reimbursement segment
Patients
Business is awarded through RFP and tender
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
In most cases the principal payers are the provincial and territorial public insurance groups that influences the purchasing decision through their
reimbursement policies.
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
Source; various articles, and government publications
Federal Government: Regulator
Provincial Government: Administrator
•Professional Fee •Technical Fee
•Coverage •Payment to Physician
•Hospital Budget •Drug Plan
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
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?
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
• 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
technology
Source: Health Technology Assessment in Canada and the G-7 Countries: A Comparative Analysis of the Role of HTA Agencies in the Decision-Making Process
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
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 Care
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
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.
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
• 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 - Hospitals
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
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
•Expertise
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
• 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 reimbursement
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
• 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.
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
New and innovative technologies
Commoditized equipment and supplies
Patients
Public tender/ procurement rules
MoH/ Regional Health authorities/Hospitals
Medical device Manufacturer
Economic rationale program and/or HTA
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
Hospital Economic Rationale Clinical outcome / clinical utility
Value
Demonstrate operational and financial impact
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
Economic Rationale
Government relations
Policy makers
Medical associations
Healthcare networks
Government agencies
Stakeholder relations
Advocacy group partnerships
PR campaign
Media story
Story / Briefing Hospitals MoHLTC and Agencies Patients
Sales & marketing Early adopters, KoL’s and centres of excellence….
Hospital & Regional health
authorities
Materials management
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
• 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 reimbursement
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
Provincial Initiatives
Federal Initiatives •Canadian Agency for Drugs and Technologies in Health (CADTH)
•Ontario: Ontario Health Technology Advisory Committee (OHTAC)
•Quebec: L’Institut national d’excellence en santé et en services sociaux (INESS)
Hospital Initiatives
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
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 reimbursement
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
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?
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
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 Drugs
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
•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 covered
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
• 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.
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
• 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 devices
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
• 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.
Provincial Regulations
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
• RFP/Tender mostly for commodity products or accepted
procedures and devices: – Stents, Catheters, scopes, gloves, wound closure
• Criteria:
– Clinically acceptable – Value – Budget impact
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
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 RFP
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
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 fragmented
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
• 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.
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
Thank you for your time. Additional resources
Emergo Group webinar on Canada’s medical device registration process: http://www.emergogroup.com/resources/videos-canada-approval
Regulatory chart outlining the Canadian medical device approval process: http://www.emergogroup.com/literature
Link to major Canadian medical device regulations: http://www.emergogroup.com/resources/regulations-canada
Stephane Taillefer Senior Consultant Emergo Group Canada Consulting, Inc. [email protected] Canada office: +1.604.909.1265
Medical Device Reimbursement in Canada
ASIA | EUROPE | NORTH AMERICA | SOUTH AMERICA EmergoGroup.com
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.