The major mobile communications companies are among the players that hope to cash in as technology meets growing needs

Medical device manufacturers in the United States — the largest medical device market in the world — expect to see a 7% or more increase in sales in the coming years. In 2013, the medical device market hit $127 billion, with orthopedic devices being the largest segment — about 21% of the market. But the road to financial success for device manufacturers won’t be smooth.

In early July, the Centers for Medicare & Medicaid Services released four new proposals to amend portions of the Physician Payments Sunshine Act to create, the agency says, transparency in the physician-manufacturer relationship. The Sunshine Act requires drug and device manufacturers to report to CMS their direct and indirect payments or other transfers of value made to health care providers and teaching hospitals. The proposed changes would eliminate the continuing medical education (CME) exclusion from reporting requirements; require companies to specify the marketed name of a device, drug, biologic, or medical supply associated with payment; require companies to report stock, stock options, or any other ownership interest; and eliminate the definition of “covered device.”

Aside from the impact on CME and physician payments, the reporting of marketed names of products associated with physician payments could create difficulties for medical device manufacturers since devices don’t have brand names, like drugs and biologics.

A 2.3% excise tax on medical devices that took effect last year could raise as much as $29 billion for the federal government over the next 10 years. Manufacturers are unlikely to pass the tax on to their customers, but may look to their suppliers to share the burden.

Health monitors

The major mobile communication companies are eyeing medical monitoring devices as a way, they say, to empower the purchasers of health care services. Samsung’s Galaxy S5 smartphone, released earlier this year, has a built-in heart rate monitor. Apple has a patent for a “seamlessly embedded” heart-monitoring device for its iPhone. And in the works is a new device for the iPhone called Cue, a tabletop analyzer that will allow consumers to test their levels of testosterone, inflammation, vitamin D, and fertility with small amounts of blood, saliva, or nasal swabs.

Cue health tracker for iPhone

Cue health tracker for iPhone

The three-inch cube provides analytical precision, Apple says, that is equivalent to results produced by large and expensive desktop lab equipment. But Cue will need FDA approval. Apple’s online store has over 15,000 health and fitness apps, but only about 120 have FDA clearance.

AT&T has opened its mHealth platform, and Time Warner has announced a “virtual visit” experiment with the Cleveland Clinic where caregivers will be able to interact with patients through televisions using secure video technology. Not to be outdone, Google’s newly established company, Calico, will focus on developing technology for the aging and their associated illnesses.

Startups are also targeting population health management via digital health devices and workflow and electronic medical record systems. But whether these devices and others in the making will serve as true cost-cutting tools for health care purchasers is questionable.

FDA at work

In a move that could significantly shorten the time it takes for medical devices to enter the market, the FDA’s Center for Devices and Radiological Health plans to reduce approval time for investigational devices. As delineated in the agency’s 2014–2015 Strategic Priorities report, this exemption allows devices to be used in clinical trials before pre-market approval.

The agency also plans to conduct a comprehensive review of hearing implants, prostheses, and blood collection and processing devices. The challenge, though, will be to collect enough data without delaying the approval of potentially life-saving devices.

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There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.