Why is There Discordance between the Reimbursement of High-Cost ‘Life-Extending’ Pharmaceuticals and Medical Devices? The Funding of Ventricular Assist Devices in Australia

Abstract

New health technologies often yield health benefits, but often at a high cost. In Australia, the processes for public reimbursement of high-cost pharmaceuticals and medical devices are different, potentially resulting in inequity in support for new therapies. We explore how reimbursement is different for medical devices compared with pharmaceuticals, including whether higher cost-effectiveness thresholds are accepted for pharmaceuticals. A literature review identified the challenges of economic evaluations for medical devices compared with pharmaceuticals. We used the ventricular assist device as a case study to highlight specific features of medical device funding in Australia. We used existing guidelines to evaluate whether ventricular assist devices would fulfil the requirements for the “Life-Saving Drugs Program”, which is usually reserved for expensive life–extending pharmaceutical treatments of serious and rare medical conditions. The challenges in conducting economic evaluations of medical devices include limited data to support effectiveness, device-operator interaction (surgical experience) and incremental innovations (miniaturisation). However, whilst high-cost pharmaceuticals may be funded by a single source (federal government), the funding of high-cost devices is complex and may be funded via a combination of federal, state and private health insurance. Based on the Life-Saving Drugs Program criteria, we found that ventricular assist devices could be funded by a similar mechanism to that which funds high-cost life-extending pharmaceuticals. This article highlights the complexities of medical device reimbursement. Whilst differences in available evidence affect the evaluation process, differences in funding methods contribute to inequitable reimbursement decisions between medical devices and pharmaceuticals.