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Conditional Medical Device Reimbursement in Germany.

Evidence based coverage for innovative devices outside of the hospital.

Over the last 10 years, we have provided consulting services to more than 150 different medical device startups. Some of which have planned to obtain the CE Mark for their product relatively quickly and prepared to launch it in Germany. The problem was getting those German Sickness Funds (Payers) to pay for it - and fast.

In one of our previous articles, we discussed a possible reimbursement shortcut for medical devices that are being used in the hospital inpatient setting. We present in this article a relatively new option of securing interim reimbursement for devices that are also being used outside the hospital - in the physician's office setting.

1. The Reimbursement Problem

According to German law, innovative procedures and devices, utilized in the physician's office setting, are not reimbursed, unless they have been officially approved following a positive reimbursement determination by the federal joint committee (G-BA).

Unfortunately, an innovative procedure or device will not be issued a positive reimbursement determination from the G-BA unless it is in wide use in Germany, has been thoroughly tested and comes with rigorous data demonstrating its value. Obviously, prior to obtaining reimbursement it would be very difficult to obtain this criteria, and therefore innovative procedures and devices may never obtain reimbursement, which make a cycle unable to fulfill. Another Catch-22...

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2. Possible Reimbursement Shortcut

According to the recently enacted law for the Restructuring of the Statutory Health Insurance (GKV-Versorgungsstrukturgesetz), instead of denying reimbursement from procedures or devices that do not yet fulfill the required threshold, the G-BA can now decide to provide funding for a 'controlled study', during which time the above threshold may be achieved.

Funding for such a 'controlled study' may be granted to new medical diagnostic and treatment methods which present a potential for providing a better diagnostic and treatment method, compared with the current alternatives.

The proposed process is currently under review by the German Ministry of Health and the effective date for the program will only be finalized once it is published in the Federal Gazette.

3. The Reimbursement Process

a. Application

A manufacturer of a medical device, utilized for the provision of a new medical diagnostic or treatment procedure, may apply for a 'controlled study' from the G-BA.

The application includes the following 6 sections:

  • Section I - Administrative Information. Name and address of applicant and contact person.
  • Section II - Summary. Description of the suggested new medical diagnostic or treatment method, relevant indication, target population, expected diffusion in the German market and expected benefits.
  • Section III - Information on Medical Product. Product description and technical instructions, comparable products, regulatory status and available clinical data.
  • Section IV - Potential. The application should demonstrate by "meaningful documents" such as published articles of randomized controlled studies, the potential of the new medical diagnostic or treatment method as a treatment alternative.
  • Section V - Key Elements of Proposed Study. This optional section describes the type of the suggested study, relevant population, required sample size, appropriate comparative intervention, endpoints, duration and estimated costs.
  • Section VI - Sponsorship and Completeness of Application. The application itself is free of charge, however, in this section the applicant also signs a letter of intent, indicating its willingness to assume its fair share of the costs, such as the overhead costs associated with the 'controlled study', while the Sickness Funds pay for the provision of the medical procedure.

The process also allows the applicant to submit the G-BA with a written request for a fee-based, non-binding consultation to provide guidance on the preparation of an appropriate application. The guidance should be provided within 8 weeks from submission and costs between €500 and €10,000, depending on its complexity.

The information provided during the consultation is confidential.

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b. Initial Assessment

Within 3 months of submitting an application, the G-BA has to decide whether a 'controlled study' would be appropriate and notify the applicant accordingly.

An approval as this stage would typically require sufficient evidence, which demonstrate how the new medical diagnostic or treatment procedure presents a potential to replace currently available alternative methods which may be more expensive, more invasive, result in more side effects or feature any other disadvantages. In addition, it should be clear to the G-BA that the proposed 'controlled study' could generate the missing evidence in order to integrate the new medical diagnostic or treatment procedure into the healthcare system.

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c. Study Plan

For the scientific monitoring and evaluation of the 'controlled study', the G-BA may commission an independent academic institute. The institute will be responsible for designing the 'controlled study', which may also include required quality criteria.

After the estimated overhead costs of running the 'controlled study' have been assessed, the applicant will need to submit a declaration of financial support and assume the obligation to conclude a funding agreement between the applicant, the G-BA and the involved scientific institute. This agreement, signed prior to the initiation of the study, will describe who pays for what, how much and when.

Special discounts, of up to 70% of overall costs, may be granted to small and medium size businesses (categorized according to annual turnover and number of employees) and also for new medical diagnostic or treatment procedures aimed at diagnosing or treating rare diseases.

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d. Re-Assessment

Following a successful 'controlled study', the G-BA may decide to provide reimbursement for the new medical diagnostic or treatment method. The average duration of the administrative process is estimated at 29 months (excluding the time period of the 'controlled study'). This may appear a long time, however it allows the company to validate its technology and provide the evidence to prove it using external resources. The generated evidence may also be used when approaching other markets, outside of Germany.

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This recent change in the G-BA's ability to perform more studies, instead of rejecting an application for reimbursement, especially in the physician's office setting, is good news for the industry. By providing a solution to the notorious 'chicken and egg' situation that so many companies have been struggling with, Germany positions itself as one of the most, if not the most, innovative healthcare market worldwide.

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