Position paper.

Global Reimbursement Principles.

This position paper of the Global Medical Technology Alliance is an internal statement of principles intended to offer participating associations a guideline for consistent nonbinding, voluntary application at a national or regional level. As circumstances differ in each market, national associations should choose whether to use the GMTA principles as an appropriate reflection of local conditions. GMTA position papers only apply to the countries in which the subject policies, systems, or practices are in place.

Globalization of Reimbursement Systems

Most countries are struggling to find ways to address rising health care costs.
Although governments recognize that there is no simple solution, many focus on the cost of medical technology as one of the contributing factors – despite its small share of each country's aggregate health care spending (generally about 6-7 percent of overall spending). As they do so, governments consider a variety of policies regarding medical technology.

The last five years have seen a marked increase in countries looking outside of their own borders for classification, categorization and reimbursement policies to incorporate into their own health care reimbursement systems. Some of the efforts have involved wholesale importation of health care data or reimbursement systems, or aspects of those systems, from one country to another. For example, there has been a significant increase in greater utilization of Diagnosis Related Groups globally, involving the wholesale or piece-meal importation of DRGs
systems from other countries. Governments have also been adopting pricing systems, some using competitive forces within their own countries, such as tendering, and others using foreign prices, either explicitly or as an informal benchmark in negotiations with medical technology companies.

Because each government determines its own payment policies, the medical technology industry must "act locally."
However, the Global Medical Technology Alliance (GMTA) would benefit from adopting a common set of principles to guide members as they confront these issues on a global basis. The principles below are intended to reflect "model principles" to ensure that the policy goals underlying the development, adoption and implementation of payment and reimbursement systems result in the best value for patients and foster innovation in the medical technology industry.



  • Transparency: Policies should be vetted and implemented in an open process, in which the decision-making criteria and process for implementation are fully disclosed in advance to stakeholders;
  • Notice and Comment: Governments should provide ample time and opportunity for stakeholders—including the general public—for notice and comment on proposed policies;
  • Stakeholder Input: Governments should be required to disclose and discuss the input provided and consider this input in finalizing the reimbursement and coverage payment policies;
  • Consistency: Governments should attempt to adhere to a predictable schedule for proposed and final payment updates and/or system reforms, and the resulting policies should be presented in a manner that reflects
    the consideration of the public input;
  • Best Value: A payment system should recognize the resources needed to deliver a group of services, or entire episode of care. The resources should be identified from well-established clinical guidelines, reflect the long-term value of medical technology and not focus on short-term costs;
  • Market Competition: Governments should allow market forces to operate to maximize efficiency and improve patient care;
  • Reward Innovation: Governments should acknowledge that resources are needed to encourage innovation, which provides continuous progress in patient outcomes.

Discussion of Principles

  • Transparency

A key element in any reimbursement system is transparency.
First, transparency requires that policymakers clearly and accurately describe the health care reimbursement system and methods used within that system to perform essential functions.
Second, transparency calls for full public disclosure of the methods, criteria and rationales used to determine and adjust reimbursement rates, coverage status, and market access.
Third, transparency also demands timely disclosure in advance of changes to the particular reimbursement system, as well as the criteria and methods that will be used to make any changes.

  • Notice and Comment

Allowing for public notice of proposed changes and opportunity for public comments are essential components of a government-funded health care reimbursement system. The concept of notice embodies formal channels for
government to convey substantive, information regarding a proposed new or modified government policy. Publication of a draft policy or regulation should occur well in advance of policy implementation. The comment component, in reality public comment, refers to a meaningful opportunity to refine the policy or regulation before final decisions are made. Such public comment is vital for success.
Essential elements are that notice is provided in advance of policy implementation, that proposed changes are described in sufficient detail to permit review by stakeholders, and that the comment period allows sufficient time for
comprehensive comments to be developed and submitted. Notice and comment enables full disclosure and a balanced discussion of any changes that will potentially impact patients, physicians and industry.
Changes can be made in the regulation or policy based on the comments, prior to implementation.

  • Industry/Stakeholder Role and Input

Governments should allow all stakeholders, including industry, physicians and patient groups, an opportunity to provide a formal response and suggested refinements to proposed policies. In addition to responding to  governmental initiatives, stakeholders should also be permitted to suggest policies for consideration and adoption by the government. Often, industry has the necessary expertise and experience to offer valuable insight into proposed policy initiatives and can offer suggestions or refinements that improve them. Industry may offer a perspective that may not be readily apparent to policymakers. Because of the highly complex nature of health care and health care reimbursement systems, policymakers with expert knowledge may be unable to foresee all of the consequences, or even potential shortcomings, of proposed policies. When given an appropriate, proactive role, industry and other stakeholders can act as a valuable partner, providing crucial and beneficial policy refinements. Giving industry an opportunity to participate in the policy process also encourages industry buy-in for the change. Industry's role should be ongoing, providing assistance with policy proposals in their early stage of development, comments and refinements in the later stages but prior to implementation, and input on periodic updates or refinements as they are formulated or considered.

  • Consistency

Consistency refers to a predictable model or cycle of updating regulations or making refinements to payment methodologies that affect health care providers.
The cycle or schedule of updates or refinements becomes more consistent when it occurs at specific, predictable intervals that are defined in advance.
Inconsistency introduces uncertainty, which will tend to generate inefficiencies and hinder the optimal functioning of both the medical device market and the health care system overall.

  • Best value

The concept of best value embodies systemic incentives to encourage health care providers to deliver high quality care at a reasonable cost. Value is a function of both quality and costs. Patients cannot determine the value of care based solely on its cost, but must also consider the quality of the care provided. Cost should be based on the resources needed to deliver a group of services, or entire episode of care. The resources should be identified from well-established clinical guidelines. Episodes of care should be constructed based on clinical information specific to the condition or disease, not on artificially fixed time periods. Episodes of care to evaluate quality and costs should span a period long enough to capture all relevant information on both outcomes and associated costs.

A low initial price is not necessarily indicative of high or best value. Value needs to be assessed over time, with considerations for successful outcomes, rather than focused on costs of a single procedure or patient encounter. For example, a medical product that lasts longer may have an initially higher price, but may actually prove less expensive than another product when additional clinical benefits or product life are considered.
To determine best value, a health care system should rely on timely and accurate data and comprehensive definitions, including consideration of recovery times, lost productivity from days absent from work, and other factors contributing to the overall value of the health care provided.
Measures of value that are poorly designed or improperly configured over too short of a time period not only do not represent best value, but also may put patient health and technological innovation at risk. A payment system that fails to incorporate appropriate systemic incentives for best value is likely to incur not only higher long-term costs, but poorer patient outcomes. Such an improperly designed system could inhibit the adoption of new and improved technologies, as value is underestimated. The use of best value principles that recognize benefits that accrue over an episode of care or the useful life of a product can better capture patient benefit and more accurately reflect real long-term costs.

  • Use market competition to evaluate the domestic price of the product

The medical technology industry supports reimbursement systems that serve the needs of patients through open and fair competition between innovative firms, and which reflect local market conditions. Establishment of  national payment levels for medical technologies can create barriers to patient access and to development and introduction of technologies by innovator firms. In countries or settings where the market for health care products is substantially dominated by government purchasing or centralized reimbursement, governmentally imposed pricing structures can distort the true value of the product.

All types of products exhibit a range of price variation, both within and between countries. Medical devices are no different in this regard, and may be even more distinct due to their range of complexity and the need for service and patient and physician training after the sale. Price variation between countries occurs because of:

  • Historic price levels;
  • Currency exchange rates;
  • Differences in retail margins;
  • Differences in regulatory and product liability systems;
  • Differences in costs of distribution, sales, and overhead;
  • Differences in health care structures and purchasing methods;
  • Differences in product lines and types; and
  • Differences in the available mix of competing products and treatment options.

Under artificial pricing controls, such as Foreign Reference Pricing ("FRP"), local price differences for a product are ignored. Consequently, lower-priced markets are subsidized by higher-priced markets which contribute to the costs of research and development. Ultimately, FRP and other artificial pricing controls or price setting systems distort investment decisions by medical technology innovators, and reduce funds needed to discover next generation life-enhancing products. FRP and other price control systems can also drive the decision on whether or not to introduce a new product in a particular market, often to the detriment of patient access to treatment.

The GMTA invites governments to adopt market-based approaches reflecting the existing conditions in each nation, to appropriately reimburse medical technologies, and to support innovation and ensure patient access to the most innovative therapies.

  • Appropriately reward innovation

Payment and health care systems should encourage innovation to produce the best patient care. Health care systems should include mechanisms for prompt recognition of new technologies as they come onto the market, without undue waiting times. These mechanisms should also have the capacity to recognize the additional clinical benefit that the new technology may provide. Technologies that are able to provide evidence of better outcomes or clinical benefit than existing products should be eligible to receive additional reimbursement. The standards and criteria that are required for eligibility for new categorization and additional reimbursement should be clearly enumerated, with criteria adopted based upon input from patients, the medical profession and industry.


Contact GMTA