In an age when everything in medicine is now looked at through a cost vs. benefit analysis and U.S. government healthcare reform efforts are more focused than ever on cutting costs, the U.S. Food and Drug Administration (FDA) has not introduced economic considerations into its product evaluations. The FDA currently has a formal evaluation process for medical devices looking at safety and efficacy prior to market clearance. But, in light of the economics that drives usage of these devices, the question is raised whether economic considerations should also be added as part of the FDA review. 

This type of economic review might incorporate costs as well as outcomes into the regulatory process. Researchers at the University of Alberta, Edmonton, Canada, and Innovative Health, Scottsdale, Ariz., recently conducted a study and showed economic considerations have much to add in the medical device policy area.  

Overview of the FDA Review Process and the Increase in Clinical Trials

The regulation of medical devices in the United States began in 1976 with Medical Device Amendments to the Federal Food, Drug, and Cosmetic Act (FDA), requiring that device manufacturers conduct clinical studies to demonstrate safety and effectiveness in order to receive premarket authorization (PMA) for class III (high risk) devices. In recent years, clinical trial activity in devices has increased. 

Based on a search of the website clinicaltrials.gov, registered trials in the medical device category (which includes all device trials) in the U.S. grew from 62 in 2000 to 1,468 in 2015. 

In 2016, Congress passed the 21st Century Cures Act, which permits certain medical device approvals without conducting clinical trials. These use an expanded criteria where the product developer can show safety and effectiveness using observational studies and “clinical experience”.

Why Adding a Medical Device Cost Analysis May Benefit Medicine

An example of a clinical area with substantial medical device use is catheter ablation of atrial fibrillation (AF), which aims to restore and maintain sinus rhythm in patients with symptomatic, non-permanent AF. This is a second-line treatment after failure of, or intolerance to, antiarrhythmic drug therapy. The FDA has focused on health outcomes (curative and palliative) as indicators of acceptability. The outcomes reported in all recent AF medical device clinical trials have been classified into outcome categories including patient-centered, composite (using multiple variables) surrogate (biomarkers or lab results), intervention, and cost – related. Using data from all available years, researchers identified 24 trials from the trial registration database, clinicaltrials.gov, that were investigations in this area. Only two of these trials had outcomes that were related to costs and intervention. Some studies had more than one outcome. 

The costs of both the ablation procedures (including payments to electrophysiologist physicians, lab costs including nursing services, imaging, mapping systems, etc.) and the catheters themselves are substantial. Techniques and technologies such as radiofrequency ablation, balloon ablation catheters, cryoballoon and contact-force sensing catheters have rapidly evolved over last 20 years, leading to cost increases. In 2017, the average government reimbursement rate for catheter ablation procedures based on data obtained from the Centers for Medicare and Medicaid Services (CMS), in a sample of U.S. hospitals obtained by Innovative Health, was $16,778. New (not reused) catheter costs per procedure in the same sample of hospitals were $10,095, which was 60 percent of the reimbursement rate. 

If one adds the costs of pre- and post-procedure services (not included in the above reimbursement rates), catheters account for about 50 percent of AF treatment costs of those cases using ablation therapy. There is a large variation in device costs between hospitals, even for the same device. This is because of differences in bargaining power between manufacturer and hospital combinations. Because there is a large variation, the measurement of a “list price” will have less meaning.

Recently, the number of ablation procedures has been increasing considerably, adding to hospitals’ operating expenses;  Millenial Research estimated that the volume of ablation procedures in the U.S. in 2015 was about 312,000, growing at an annual rate of 15 percent. Using these volume estimates along with the costs in the sample researchers had, they estimated the U.S. national cost for these procedures was about $3.1 billion in 2015. As a result of the growth in ablation therapy, interest in its economic aspects has increased and a large number of studies have been generated which documented the cost per procedure and the overall costs of both AF and ablation procedures.
 
The cost studies that have been undertaken so far have overstated the cost of the ablation therapy interventions. For a number of years, catheters have been reprocessed, resulting in savings to hospitals. In 2002, the FDA issued a directive relating to medical device reuse, requiring that devices be reprocessed by third parties. Reprocessing manufacturers had to be licensed by the FDA using the 510(k) premarket submission. The reprocessing of devices used in the electrophysiology (EP) lab reduces catheter costs by about 30 percent. A 2008 Government Accounting Office (GAO) report indicated that outcomes are the same as when original equipment is used. According to the Innovative Health survey mentioned below, the entire group of 133 hospitals reused catheters in 15 percent of the AF ablation cases. The use of reprocessed catheters will therefore improve the economic case for ablation compared to drug treatments.    

Although health outcomes are of prime relevance to policy makers such as the FDA, the researchers said they could not obtain a complete picture of the comparative performance of ablation therapy by focusing attention on health outcomes alone. To get such a complete picture, there is a need to examine costs in relation to the outcomes that are generated by the resources used in the procedures to show cost-effectiveness. A 2014 review of cost–effectiveness studies of ablation therapy in AF found eight published economic evaluations. Of the cost-effectiveness studies that looked at both costs and outcomes, only one of the eight was directly related to a clinical trial. The other seven were modeling studies, which put together cost and effectiveness data that was taken from a variety of disparate sources. Chang et al. showed the results of the studies to be favorable to AF ablation therapy in comparison with drug therapy. But none of these studies will be of relevance to the FDA’s approval of ablation therapy, because economic outcomes are currently out of the realm of FDA’s regulatory criteria.