Seminar Reviews the Importance of Clinical Evidence and Health Economics in Getting to Market
Many medical device entrepreneurs believe that the single most important milestone to achieve in gaining market adoption of their technology is regulatory approval. While certainly an essential step, it is often not sufficient.
The current healthcare environment is becoming increasingly evidence-based. Payors and other stakeholders are demanding greater levels of clinical data in addition to clear and convincing health-economic data before embracing new therapies. Investors, recognizing this trend, are also looking for companies to have a well-thought-out plan for evidence development.
A recent Fogarty Institute seminar explored best practices and gave entrepreneurs timely advice about formulating such plans. The seminar featured a quartet of experienced industry insiders approaching the topic from various angles:
- Greg Bakan, from the Fogarty Institute, provided a framework for developing an integrated evidence development plan and practical advice garnered from applying this approach across numerous technologies.
- Jan Pietzsch, PhD, director of health economics and value at Stanford Biodesign and president and CEO of Wing Tech Inc., discussed key strategic and tactical considerations for health economics.
- Jessica Holmes, director of reimbursement at Argenta Advisors, provided a payor and policy perspective.
- Garrett Schwab, an independent consultant, offered case study examples.
Thorough planning drives data collection success
Presenters offered a deep dive into creating a plan to develop the data necessary to support regulatory approval, market adoption and hopefully, an eventual exit.
Since the process is costly both in terms of time and funds, entrepreneurs need to be particularly thoughtful about how to tackle it. Key considerations include:
- Addressing the unique needs of multiple stakeholders, who may include investors, payors, providers, patients, hospitals and acquirers.
- Considering the different level of evidence that most interests each stakeholder – such as clinical, safety and health economics – during each phase of development.
- Planning for diverse business factors that include time, cost, risk and understanding how to finance.
- Keeping health economics top of mind in an environment where medical care costs continue to grow more rapidly than other consumer costs and GDP.
Sharing best practices learned from personal experience
The workshop wrapped up with practical advice designed to help set entrepreneurs on the right path for developing a robust plan. Key factors include:
- Appreciate what motivates investor evidence requirements at various stages of development.Put yourself in a VC’s shoes to consider what keeps them awake at night: Is it proving that you have a viable technology? A viable product? A viable business? Or maximizing the commercial potential of the opportunity once the development risks have been overcome?The clinical and economic data necessary to address each of these issues will vary. Understand what is required to overcome each concern and be sure to tailor your evidence development plans accordingly.
- Avoid the pitfalls of being either a minimalist or perfectionist.It’s tempting to pursue the smallest, cheapest and fastest clinical studies necessary for regulatory approval. But with truly novel technology, such studies are likely to be insufficient to drive commercial adoption. Payors and other stakeholders may require health economics data and longer-term follow-up before agreeing to adopt a new technology.The opposite mindset can be equally problematic. A “perfectionist” approach in which a company waits to go to market until the ultimate embodiment of the technology has been achieved and studied in numerous large, long-term studies is likely not fundable. New technologies undergo continuous evolution and optimization through real-world experience. This evolutionary process needs to be embraced and actively managed.
- Pick a fight you can win.You typically only get one chance to show positive results with a pivotal clinical study. As such, design and conduct such clinical studies carefully. Design a study that identifies the patients most likely to benefit from your technology, even if it represents a potentially smaller market. Early success builds positive momentum and is essential to attracting investor interest. Future studies can always be conducted to expand indications and broaden adoption of the technology.
- Remember that every step sets the foundation for commercialization.Use your clinical work to “seed” the market with awareness and interest. Clinical sites can become your best early customers because of their direct, positive experience.
The bottom line is to never underestimate the power that positive data brings to investment buy-in and market adoption. If you don’t have good data, the rest is moot.