Agreement to provide greater certainty on prostheses pricing


The Federal Government has progressed its Prostheses List reform agenda by striking a four-year agreement with the medical devices industry, with the intent of delivering certainty and stability for the industry while restricting private health insurance (PHI) premium increases for consumers.

The Agreement with the Medical Technology Association of Australia (MTAA), which took effect from 15 October 2017, will see more than $300 million in price reductions to medical devices listed on the Prostheses List, but provide stability, process improvements and a new $30 million med-tech and biotech grants program - after a period of “sustained attack” by the PHI industry.

The Agreement “recognises the role of the Prostheses List in supporting the value proposition of private healthcare to Australian consumers, and how the medical technology sector contributes to this…”

Key outcomes of the Agreement include: Providing private patients with access to prostheses in a timeframe closer to that of public patients, with measures such as by reducing duplication in assessment between the TGA and the PLAC; Increasing the frequency of listing on the Prostheses List from two to three times per year; Reviewing ways of listing non-implantable medical devices to support private health insurance for clinical  and cost-effective medical devices, such as cardiac ablation catheters for atrial fibrillation.

A $30 million med-tech and biotech grants program is expected to be established by 31 March 2018. The Fund “will be available for small to medium size enterprises (SMEs) and researchers who partner with SMEs for conducting activities that support development of new and innovative device technologies, clinical trials and associated registries, support researcher exchanges and workforce development. The allocation of grants will be overseen by a committee that includes representatives of MTP Connect, AusBiotech, MTAA and the Department of Health.”

AusBiotech CEO, Mr Glenn Cross, welcomed the stability the Agreement is expected to provide and said: “The Prostheses List is a pivotal part of the reimbursement environment in Australia and critical to those companies developing implantable medical devices for the Australian market.”

He also welcomed and the $30 million fund and said AusBiotech looks forward to further detail on how the fund will work.  

“AusBiotech supports the MTAA’s call for insurers to fully pass on to consumers the savings that this Agreement provides and I note AusBiotech remains committed to supporting workable conditions within the prostheses benefits framework.

“The development of an implantable medical device is a very high-risk undertaking. The attraction of the multi-million dollar investment/s, or indeed the choice of where to develop a product and conduct expensive clinical trials, is highly-contingent on intellectual property protection and the regulatory and reimbursement environment.

“We recognise the role the Agreement can play in support of Australian innovation and development of new technologies by incentivising the adoption of new and improved medical technologies with demonstrable patient benefit,” said Mr Cross.

AusBiotech made a submission to the Senate Community Affairs References Committee Inquiry into the matter of ‘Price regulation associated with the Prostheses List Framework’ earlier this year.

AusBiotech advocated for a reform process that recognises and ascribes clinically-relevant costs associated with the full service offering for the medical device and the after-service component for life-cycle management of the medical device over its lifetime – as well as the commitment to the long and arduous development time and cost.