Disrupting the Market for Ineffective Medical Devices

Abstract

Those favoring greater medical device regulation tout the need to protect patients from the harms of insufficiently tested devices. Those favoring less regulation cite the need to promote innovation and move potentially life-saving devices to market faster. The best innovation creates medical devices that are superior to current alternatives, either because they lead to better patient outcomes or because outcomes are just as good, but the care is cheaper. This is not what the current system promotes. The FDA easily approves devices that are "substantially equivalent" to existing ones and does not require data on relative effectiveness, nor does it always require ongoing study of effectiveness. The tort system does little to force providers to assess relative efficacy. Payors have both the data and reason to care about relative effectiveness. They can refuse to reimburse for procedures that employ ineffective medical devices. Legal change might be required because government payors have little latitude to refuse reimbursement for procedures that use approved medical devices. But payors are best positioned to promote the kind of medical device innovation that is most needed. Manufacturers fearing a collapse in the market for ineffective medical devices will devote more resources to innovating for effective ones.

Topics & Concepts