HCB News: With a large federal government, and so many states, what do foreign companies need to know about medical regulatory hurdles, reimbursement, and the potential for their devices to be adopted?
ER: Foreign companies in the medtech space largely understand that, unlike many other countries, the United States doesn’t have a single payer system through which devices and device-related procedures are reimbursed by insurance for providers. That means that any market entrant needs to carefully consider, in advance, how its products will be reimbursed so that providers can financially justify their acquisition. The onus is on medical technology companies to work with regulators prior to a product launch to ensure that the requisite approvals are in place. It is crucial that federal health care program payers have classified the products and related medical procedures for payment purposes and have billing mechanisms in place through which hospitals, physicians and other health care providers can submit claims for reimbursement. For example, not only does a product need to be approved by the FDA, but it also may require a unique billing code (CPT or HCPCS) and/or a national coverage determination by the Centers for Medicare & Medicaid Services (CMS), which administers the Medicare program, the federal health care program for the aged and disabled. Without both the regulatory approvals and payment mechanics already in place, medical technology uptake in the US simply is not feasible.

HCB News: Most companies are intimidated by the risk of product liability and rightly worry about US laws and a litigious society. How do you advise them?

ER: While the US culture is indeed different in this regard, the perception of this risk tends to be exaggerated abroad. The real question is what can be done to mitigate litigation risks in the United States. Broadly speaking, there are a few steps companies can take to better insulate themselves from liability ranging from appropriate corporate structuring, and related housekeeping, to insurance.

In the medtech space specifically, manufacturers may face strict liability and negligence claims by individuals if harm was caused by a medical device and the manufacturer violated applicable regulations. Consequently, more than any other space, the answer starts with a solid compliance program which allows companies to demonstrate compliance in the face of a claim. Creating a culture which allows for regular communication between the business and the compliance teams also furthers this goal.

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