Our reimbursement adviser, Sarah Griffin talks about the impact COVID-19 has had on Sales and Reimbursement in the Australian Medical Device industry.
Australia has been very fortunate in that it has avoided the worst of the pandemic. There have been more than 21,900* cases in Australia of whom the vast majority have recovered with a total of 352* deaths. These low numbers have been the result of early international border closures, high testing rates, and a population, who have, on the whole, supported the government’s containment measures. Recently there has been a dramatic increase in cases in the state of Victoria with the Melbourne metropolitan area returning to lockdown. While this has been a significant setback, overall Australia has managed well with most states with low case numbers or no cases at all.
This success has, of course, come at a cost and there have been major impacts on the medical device market. As part of the Australian Government’s pandemic response, all non-urgent elective surgery was put on hold to preserve personal protective equipment and to ensure sufficient intensive care beds. Australia has a dual public and private hospital sector. The private sector is heavily reliant on elective surgeries and therefore lost its main source of revenue. The Australian Government and the private hospital sector reached an agreement so private hospitals would treat public patients and expand their intensive care capacity. In return, the Government guaranteed the sector’s financial viability through the crisis.
Fortunately, the large utilisation of intensive care beds did not eventuate. Nevertheless, medical device suppliers that specialise in elective surgeries such as orthopaedics, spine, neuromodulation, non-urgent cancer therapies and others had no market for their devices during this time. Device manufacturers that specialise in cardiac care and other urgent interventions were comparatively unaffected.
Since late April 2020, a staged introduction of elective surgery has been introduced, although it is not anticipated that surgery will resume to pre-pandemic levels for several months. It is anticipated that a significant backlog of elective surgeries will need to be catered for and several State Governments have reached agreements with private hospitals to assist in treating public patients.
While the actual delivery of health care and the sale of medical devices is likely to resume, there has been a ‘hibernation’ in some areas of medical device reimbursement and ongoing reform. This has pros and cons for manufacturers.
Applications to the Medical Services Advisory Committee for reimbursement of new medical procedures under Australia’s universal Medicare scheme have not been affected. Large committee meetings are now conducted virtually which are not as satisfactory for some applicants, but time frames for applications are as normal.
The main impact has been on the Prostheses List. The Prostheses List is a list of mostly implantable medical devices for which private insurance companies must pay a specific price. Inclusion on the Prostheses List is essential for market success in the private sector. The Prostheses List has been under considerable political pressure and has been undergoing significant reform.
The Australian Government and the Medical Technology Association of Australia (MTAA) reached an agreement where reform of the Prostheses List has been put on hold. The MTAA agreed that no new applications for the ‘General Miscellaneous’ item will be processed. These include general surgical items such as sutures, staplers, and wound closure devices. A review of these items which may have resulted in some products being removed from the list has been put on hold. The Prostheses List reform process has also been put on hold until 2021. These initiatives have given the medical device industry some certainty during the pandemic recovery. While applications are being accepted for all other Protheses List devices, the industry has reduced the number of applications where possible.
*figures correct as at 12 August 2020
We tailor our services to the requirements of your business and can help you implement plans that are best suited to your projects.Contact us
