Medical Device Monitor

Unique Identifiers for Medical Devices Could Help Payers Determine Value

A low bar for market entry leaves health plans unsure of the value of devices. Adding a unique identifier for each product could help with decision making.

Katherine T. Adams

Many medical devices may be similar, but the value and clinical utility of each are not the same. Bob Wanovich, vice president of market strategy and delivery at Highmark in Pittsburgh, stresses that approval, regulatory, and other issues make it hard for payers to keep up with specific devices’ analytical and technical performance, which ones help providers to make better treatment decisions, and which ones should be paid for.

“Many devices are bundled together through codes,” Wanovich points out, “so you could have many different products, although similar, under a single code. That bundling, and a very low bar and regulatory process for entry into the marketplace, are big issues for payers such as Highmark.”

Payers make decisions from a policy perspective. “At Highmark, we decide what we will pay for from a benefit perspective, not a convenience aspect,” says Wano­vich, explaining that a device may provide more of a convenience for the patient and the physician than a true health benefit. Highmark, he says, has a process “where we are contracting with device manufacturers or suppliers to pay for devices that are truly therapeutic.”

Unique device identification codes, or UDIs, are a potential answer, Wanovich says. A UDI is a unique numeric or alphanumeric code that identifies the labeler, which according to the FDA “is the person who causes the label to be applied”—usually the manufacturer but sometimes a specification developer, a single-use device reprocessor, or a repackager.

A UDI also lists the specific version or model of a device, and includes a production identifier, which provides such additional information as the lot or batch number, the serial number, date of manufacture, and expiration date.

“UDIs could help avoid the downward creep,” says Wanovich, “and we are generally in agreement with that because [with them] we could better control the value of the device and also get a better idea of what devices patients are really using.” The UDI, he adds, would help payers to manage both cost and value.

As for medical apps, Wanovich says, they are not considered devices and Highmark does not pay or reimburse members for their use. “We will continue to look at them and work with providers to determine their value and possible coverage.”

On May 4, in response to growing concern about poor or lack of surveillance of medical devices, the FDA and the National Library of Medicine released a medical device postmarket surveillance plan. The plan makes the development of national and international medical device registries for selected products a priority. It also creates a UDI system for medical devices. Data on devices with unique UDIs will be publicly available on the ­AccessGUDID (Global Unique Device Identification Database) website (http://accessgudid.nlm.nih.gov/). Device labelers must include a UDI on device labels and packages, except where an exception or alternative exists, and submit device identification information about these devices to the FDA’s Global UDI database (GUDID). The process would also require that a UDI be directly marked on a device that is intended for more than one use or intended to be reprocessed before each use.

Because the UDI system is being phased in over the next several years, labelers currently are submitting data on only the highest-risk medical devices. But as the system is implemented, the records of all medical devices required to have a UDI will be included in the database.

Excise tax again under attack

Sponsors of the bipartisan Protect Medical Innovation Act of 2015 are again aiming to repeal the 2.3% excise tax on medical devices. The tax was enacted as part of the ACA to help pay for health care reform initiatives.

The Advanced Medical Technology Association (AdvaMed), the device lobbying group, also has made repeal of the tax a priority. Under the ACA, imposition of the tax on the sale of any qualifying medical device by either the manufacturer or the importer began in 2013. The tax is levied on the wholesale price of a device, not the price paid by the end user, and does not apply to eyeglasses, contact lenses, hearing aids, wheelchairs, or any other medical device that is available at retail for individual use. Sales for further manufacture or export are also tax-exempt.

Proponents say that under the ACA, demand for medical devices has increased and that the tax does not affect innovation. Repealing the excise tax would cost $26 billion between 2015 and 2024, and because the ACA is specified by law as budget-neutral, Congress would be required to offset the loss by increasing other taxes or reducing spending. President Obama has threatened to veto any legislation that would defund the ACA. Preliminary data show that the tax raised $913 million in the first half of 2013. In November 2014, a Congressional Research Service report showed the tax would result in a 0.2% decrease in device industry jobs and output.

Selected FDA medical device approvals, March 1–April 30, 2015
Date Manufacturer Device name Use and notes
March 9 Advanced Circulatory ResQCPR A system of two devices for first responders to use to perform cardiopulmonary resuscitation (CPR) on people in cardiac arrest. Components include the ResQPump, the first FDA-approved device for active compression/decompression CPR, and the ResQPod 16 impedance threshold device, which prevents influx of unnecessary air through the open airway during active chest wall recoil. A clinical trial demonstrated 49% higher one-year survival compared with conventional CPR.
March 10 Somna Therapeutics Reza Band UES FDA-cleared, neck-worn device is designed to reduce symptoms of laryngopharyngeal reflux.
March 13 Boston Scientific Watchman Left Atrial Appendage Closure Device Catheter-delivered heart implant was developed as a nonmedication alternative to warfarin in patients with nonvalvular atrial fibrillation. The device closes the left atrial appendage to prevent migration of blood clots to reduce the risk of stroke and thromboembolism.
March 23 Abiomed Impella 2.5 System Blood pump for maintaining stable heart function and circulation during high-risk percutaneous coronary intervention procedures. Inserted into the heart through a catheter, the system draws blood from the left ventricle and pumps it into the aorta. The pump may be adjusted as needed during the procedure.
March 30 Medtronic CoreValve System This previously approved surgically implanted aortic valve received a new FDA indication for use in patients whose surgical aortic bioprostheses fail.
March 30 HyperBranch Adherus AutoSpray Provides air flow to aid in delivery of Adherus Dural Sealant, which provides a watertight closure during cranial procedures. Evaluated in a prospective, randomized, controlled, multicenter pivotal trial.
April 17 AcuFocus Kamra Inlay First-of-its kind corneal implant designed to improve near vision in patients with presbyopia who have not had cataract surgery. In clinical studies, 83.5% of 478 evaluable participants maintained 20/40 vision or better at 12 months.
April 23 Siemens Healthcare Mammomat Inspiration With Tomosynthesis Option Digital mammography add-on reconstructs two-dimensional breast images into an approximation of three-dimensional images to improve tumor detection.
April 30 St. Jude Medical Protégé MRI SCS System Upgradable technology allows patients to access future SCS technology through software updates rather than surgical device replacement.
Sources: FDA, manufacturers’ news releases