Building a MedTech Market Pathway: Aligning Regulatory, Reimbursement, and Commercial Teams Early

Hello, and welcome, everybody. My name is Sean Smith. Today's webinar is Building MedTech Market Pathway, Aligning Regulatory Reimbursement and Commercialization Strategy… Commercialization Teams Early, excuse me. Before, I make the introductions of today's speakers, I would like to make a few housekeeping announcements, just to… make sure that everybody's on the same page. This webinar is being recorded. The recording will be available in approximately 24 hours. It will be emailed to you via the same email that you registered with, along with the slides. I'm also gonna post the slides at the end of the call

Special note, when you're viewing the slides on smart links. If you hover over the title, you're able to download them. Let's see. If you would like a certificate of attendance, please enter your name and email in the chat exactly as you would like it to appear on the certificate, along… your name along with your email. Please note, we do these manually. Sometimes it takes a while to get them out, but, you know, we do our best. Please don't send me nasty grams about the, whereabouts of your… Certificate, just, just send me a note that says, reminder. That's fine. Let's see… There will be 3 short, poll questions during the call. We'll launch that somewhere, I don't know, 20 minutes into the thing. And I'm gonna post some announcements about the, upcoming events.

for, next week in the chat, so, please take advantage of that. Now I'm going to introduce today's speakers. First of all, we have, Michelle Lott, who is Regulatory Strategist, Principal, and founder of LeanRAQA. Second is Fernanda Nussbaum, Vice President of Customer Relations at TTI Health, and third, off-screen is Renee Franz, General Manager of Leanor AQA. I'm gonna turn it over to Michelle, and if you… oh, one last thing. If you have questions for me, please put them in the chat. If you have questions for the speakers, please use the Q&A function.

to ask questions of the speakers. We'll try to get to all of your questions, but if we're not able to, then we'll try to follow up afterwards. Thank you for your time, and thank you for joining us today.

Yep, thank you for your time. We are looking forward to tying together the regulatory and reimbursement landscape for you guys. So, I'm Michelle. I founded LeanREQA. I've been in regulatory and quality for over 20 years. I've also served as an advisor on a FDA advisory committee. And then I… I make a joke, but it's really, like, funny ha- not funny ha-ha, but just funny. Master Grief Counselor, because, regulatory seems to bring out the anger. denial, bargaining, and then I finally have to get people to acceptance before they are ready to start work on their regulatory strategy. So, Renee, has been, she's a commercialization specialist. She has been in the industry over 30 years, and she has brought 200, over 200 technologies to market, including some all the way through, exit.

So… Renee is the one that always has the job of delivering the bad news and telling people that their… their technology and their baby is ugly sometimes. So, she… so don't shoot, because she's just the messenger. So, at Leanor and QA, we help people from very early stage in concept development, and hand-hold them all the way into their commercialization, and help them stay on market once they are in commercialization. Sorry. Fernando?

Hi, good morning, everyone. It's always a privilege to be a part of this network, and to really join forces with organizations that are so committed to helping new technologies make it to patients successfully. So big thanks to our partners, Lena, Yokiwei, thank you, Michelle. Thank you, Renee, and MedTech Leading Voice. Sean, you've been great. Thank you so much for making this happen. So here's a little bit about me. I've assisted hundreds of medical device companies commercialize their technology. Really, my goal is to get these devices in the hands of patients who need them the most. That's what we call the, you know, speed to patient. And I'll give you a little spiel about TTI, if you want to go to the next one.

Thank you. So TTI, we are a boutique CRO with deep expertise in health economics. market access, reimbursement, and evidence generation. We're deeply passionate about helping clients, like many of you here, navigate the complex landscape of healthcare policies overall, really, by providing evidence-based insights and strategic guidance That can effectively prove the value of your innovation, and really excite the marketplace to help more patients faster.

So, we're going to talk to you about the process of con- from concept all the way through to commercialization. So, what happens, at least for me in the regulatory workflow, is that I have clients that come to me right before they think that they are ready to write a FDA submission. And they say, hey, Michelle, we need you to write us a 510 now. We are ready to submit to the FDA. But what they… and they don't call me earlier in this process of getting to the part… point where you're submission ready, because a lot of times they think, boy, regulatory just sounds expensive, and we're gonna wing it, until… until we think we're ready.

But the problem is that this is what the right things at the right time look like. And if you don't do the right things at the right time, that really is expensive, because you have to retrospectively Rebuild your whole engineering documentation, sometimes your test strategy, your reimbursement and regulatory strategy can all be impacted by not incorporating the right things at the right time. And as you can see. I mean, just right after idea and concept development, you know, things on the commercial side start to play in, like identifying the user needs, developing a trace matrix out of that.

you know, I can do a regulatory strategy where we know what the product code and the classification, and what the challenges are going to be that we have to navigate before we go into submission. And then on the reimbursement side, you know, we can kind of get an idea of what that landscape looks like in terms of codes that may be available based off of our intended use. So… and then you can see, as we progress to even being ready for submission, we have a lot of activities across our three work streams that need to be done, like, at the right time. To save you, you know, time, money, and to make sure that you get your product to market with the claims that you want as well.

Exactly. I mean, I would say the same thing for reimbursement, right? You don't want to get to the point of FDA clearance or approval to start figuring out what your reimbursement strategy needs to look like. So that needs to be done really, really early, even before the prototype stage, and I think that's one of the themes that we're going to carry throughout this webinar is really stressing the importance of getting that done earlier. But yeah, well said, Michelle. Thank you.

Yeah, and to add to that, you notice, right, the very last bullet. under… between IDEA and product development is secure funding. Knowing what your regulatory and reimbursement strategy is, is critical to getting funding as well, because that determines the amount of funding you'll need, and the timeline to realistically expect to start selling your device.

Absolutely, absolutely. I mean, investors, you know, you can have, and I think this is kind of a teaser into my next slide, but, you can have an amazing technology that does so much, but if there's no clear path to reimbursement, then… then you really have a problem. You don't have a product.

So, on that note, do you want to continue talking?

Yeah, absolutely. Yeah, so, I think there's a little bit more to this slide, too, on the presentation, but anyways, I would like to emphasize, really, the importance, again, of developing a reimbursement strategy in parallel with the development of the regulatory and clinical strategy for, you know, new medical devices. Many companies often, like Michelle just said, they wait too long before thinking about that, and they make critical errors when implementing a regulatory or a clinical strategy that can unfortunately negatively impact the reimbursement. So many companies, they also think that just because their technology's new, and it will automatically be in reimbursement, there's gonna be reimbursement there, it just doesn't work like that, unfortunately.

So, a well-planned and executed reimbursement strategy is often measured in years, not months, so it's a long, you know, it's a marathon, it's really not a sprint. So it requires a series of independent activities to really achieve the successful conclusion, and I'll walk you through some of those details later in the presentation. But anyway, so this is really important. Again, to start early and ensure your management team understands that the process will require a lot of patience and a lot of due diligence.

So, the next item that will impact your marketing strategy, your regulatory strategy, and your reimbursement strategy is claims, and having alignment across all of those work streams about what your goals are and what you want to say. And then Renee will speak a little bit to the commercialization, strategy here.

Yeah, thank you, Michelle. So, really early on, it's important Again, as we've been saying, this consistent theme of aligning regulatory with reimbursement around your claims, because you, for example, may have a new technology that could possibly, if you reduced Or went with different… intended use and could make different claims, you might have an easier regulatory and reimbursement path you can get to market, start actually selling the device, and then continue to add on to the claims that you eventually want to have fully for your device, and continue to bolt on your regulatory and your reimbursement strategy. Some folks don't

you know, don't realize they have that option early on, and they want to just immediately identify all the potential intended uses and make all the claims right up front. But there can be a very proactive stair-step approach To aligning your regulatory and reimbursement claims up front, so you can hit the ground running when you start commercializing with existing codes. And then again, build your clinical data, and come back and get your clearances for the other claims you want to make.

And from a regulatory perspective, claims can imply, like Renee said, a new intended use, which may take you from being eligible for a 510 pathway into a de novo pathway, if there's no clear predicate with that intended use. And even something as simple as twice as fast, or say, example, like, stop snoring. Fda considers all of those claims to have to be substantiated, and I was asked by the FDA once from a client that had a 510K in. They saw some of the marketing literature that said, stop snoring, and they said, we need to see your clinical study that says this Stop… Totally stops snoring for everybody.

So there's a lot of… a lot of innuendo to the claims and the indication for use, that can significantly affect how you're classified, what kind of data you need. And… and so you need to be really mindful of those. Need to tell… plan for them up front, so you can include them in your 510K, have them reviewed, then you know you're not going to get in trouble later on in marketing things that you can't substantiate. Fernanda, do you… what…

Yeah, no, absolutely. I mean, I agree 100%, 100%.

So, those claims can affect your reimbursement. Perspective, right?

Correct, and… and… You know, and I'll… and I'll keep… if anything, you… you will definitely get from, if there's one takeaway from this, it will be really the importance of, again, just making sure that you're thinking about this thoroughly, and, and from the reimbursement perspective, obviously, again, it doesn't… you know. Again, if you have an amazing technology, but there's really no clear path to reimbursement, and it wasn't factored in into early planning, then you're really stuck with the problem.

And so, an example from a regulatory perspective. That is really interesting for some… I saw this company that pitched at an angel investment conference. They got a good deal of money. They told people, like, they were a Class 2 510K exempt, which technically was true. They told them they had a CPT code, then when they went… got ready to go to market, it turned out the CPT code for their device was, actually they… was for a procedure done in a physician's office that was almost like an outpatient procedure, and so they couldn't get re… and it was antiquated. Nobody did that procedure like that anymore, and all of these are done in home now.

And so, they actually turned out not to have the code that they thought. didn't actually cover the procedure and the process of the use of this device. So, that company is now defunct because they didn't thoroughly understand how the coding worked and applied to their particular device.

Well, and Michelle, thanks for that, because that's really the perfect segue for the next slide. We're really… I'm gonna tell you that, really, the importance of, really, the, all three, building blocks, really, for reimbursement. So it's coding, coverage, and payment. And as Michelle just pointed out. truly, all of these elements are driven by the side of service, so you have to really understand that. So in that example that Michelle just provided, yeah, there was a coding, but it wasn't for the specific side of service, so then… then again, you're back to not having necessarily adequate, coding that's available for your technology. But anyway, so these are really what I consider the goals for any medical device-related reimbursement strategy. So you have to have universal coding from all insurers and in all patient care settings. Unambiguous coding,

adequate institutional and physician reimbursement. And obviously, while all of these will be ideal for a new medical technology, achieving these goals, it's really not always possible, or it can take years to accomplish. Again, you can have coding, but if there's no really coverage, related to that code, then you know, you have to do a lot of legwork for that coverage to happen. So the first step is really to understand the important differences between those three pillars in reimbursement. You know, we use Would the use of my technology be covered by insurance companies, and can, the uses of my product be described by existing codes? Or will a new code be needed? You know, in many cases, that's the scenario. And… and will payment actually be adequate for providers

And does that match with my pricing strategy? You know, am I gonna get enough? For that, what is that payment rate? So understanding all of those three things are very, very important when designing, really, your reimbursement strategy. So, coding is really the link between coverage and payment. They're based on standard numeric… alphanumeric language that describes the service provided to patients. So, I think, Michelle, you were the one that mentioned something earlier. It's not… the coding is not necessarily to the product, it's actually to the service.

And I see that a lot, Fernanda, in my practice, is that people say, oh, I'm good, I have a code, and they think the code covers their device. But again, they… the device fits with inside a procedure, and that is the part that is, you know, wrapped up with the coating.

Exactly, exactly, yes. So… and I think one of the important things that I wanted to mention also, it's not every innovation requires a new CPT code. That's a common misunderstanding as well. But, you know, the decision to recommend or use an existing code should really be researched and reviewed by, you know, professionals, like my company, as the initial part of the reimbursement. So, should a new CBT code be based, you know, if there's no really currently available code as appropriate, then I think we need to put in an, you know, the AMA will actually require the applicant which would be, you know, a company like yours to demonstrate, product demand in addition to peer review, clinical outcomes data. So, I would say…

I always tell my clients this. Going… while it's ideal in some instances to, you know, really obtain your own code. That can take years to happen. Years. And it's a lot of money involved in all of that. And the evidence, the bar of evidence, is pretty high in some scenarios. Obviously, when we're talking about a tracking code, like a Category 3 CPT code, then the evidence is not, it's not super high, but when you're talking about going for a Category 1, Then we're really talking. you know, the really need for peer-reviewed publications and some clinical studies and all of that.

I just even wonder how many people on this call are watching… or watching this webinar even know that there was a Category 1 or 3 or whatever to note that coding system.

Right.

Particular type of code.

Exactly, exactly. So, it's really all about designing that strategy earlier, so we can really understand what are some of the codes. And I always say, you know, in a perfect scenario, I would actually reverse engineer the product based on the reimbursement strategy, so based on an existing code. So, how would I develop this product?

Moving on to coverage.

All right, so let's talk about coverage. That's, one of the three core pillars of reimbursement, as we talked about in the last slide. So, coverage really essentially means a payer's decision to provide benefits for a specific product or service. So really the research question that answers here for coverage is, will the insurance company or Medicare pay for this procedure or device at all? And again, in some instances, I've seen where there are codes, but coverage doesn't really sustain. So then, you know, you're… you're… just having a code doesn't mean much.

without.

the coverage.

And then I thought, it's important to know that for coverage, they assume you've already done whatever you needed to do with the FDA to get to market. And once… once you get either the clearance or approval, they're not really interested in that regulatory pre-work of how you got here. They're just assuming you got here through a viable regulatory pathway, and it no longer has any bearing on which code is appropriate for your.

Exactly, exactly. And I think another thing that I also, tell clients, you have to understand your payer mix. So, you know, Medicare and private payers, they all have their own coverage criteria. So really understanding what that looks like, what of all of the policies are in place. Will be really, really important, you know, to make sure that you're using that appropriately and the costs are controlled.

So how does all that roll into the payment?

Okay, so, Payment is really just the amount that a provider or facility is actually paid for delivering a service or using your device. So that includes the portion paid directly by the payer, plus what the patient contributes through copays or deductibles. Again, because this is, you know, it seems… fairly simple, but there's a lot of clients that still, early companies that don't necessarily understand the concept of this. So, the key thing to remember when we're talking about payment is it really depends on both coding and coverage, again. Even with the right code and established coverage, the actual payment amount can still vary widely.

So, Sean, this would probably be a good point to launch the quiz question. There we go. So if you guys could take a couple of moments to… Fill that out, we'd appreciate it.

And I just have to say that I'm really loving this webinar, guys. Thank you. I know that when you're talking into a void, it's like, you know, disturbing, but, You know, great, great information. Thanks.

Why aren't you?

Okay. I'll move on. So, now we're going to talk about how all of those concepts in that reimbursement area overlap with your regulatory strategy. So, choosing the right regulatory path is going to be critical to your success, and it's highly reliant on how you define your intended use and indications for use. Both as to what pathway is appropriate to get through the FDA, but then which coding is appropriate once you're in commercialization. This can, vary anywhere from a FDA strategy that involves maybe a Class 1 or Class 2 510 exempt product. which is going to be much easier. You basically get the quality management system that's appropriate for your product in place, and you can register and list without the rigmarole of going through a submission with FDA.

It could be a little bit more strenuous, and you have to do, you're a Class 2 moderate-risk device, you have to do a 510K to get to market, a 510K Is, relies on a predicate strategy, where you compare your device to another legally marketed device. And it's a concept called substantially equivalent. So, it doesn't have to be identical, but it has to be equivalent in a way that doesn't raise new questions of safety and efficacy. Then the next step up from there is de novo, and that's for things that, don't have a clear predicate, and that might be something of a new technology, it might be a new intended use, there might not be anything out there with that technology and that intended use combination.

And so, therefore, it's de novo or of new, and this is going to require, clinical evidence to bring this to market, and it usually, ends in your device being classified as Class 2, and it's an opportunity to contribute to drafting the regulation about what controls should be in place Around subsequent products that will be, come to market underneath that regulation. So… And then your Class 3 highest risk products, are pre-market approval products. This is a lot of strenuous and rigor to bring these products to market. There's a ton of, performance, animal, clinical, biocompatibility, electrical safety.

A lot, a lot, a lot of testing, a lot of expensive clinical trials to bring these high-risk products to market. So those, 3 different types of submissions all have different fee structures, with the FDA. This year, the… it varies from a little over $6,000 for a 510 to a little over $140,000 for a PMA. And then the review times for FDA, the clock times, if you will, are 90 days for, traditional 510Ks. Those usually land about 200 days. De novos are supposed to be 150. Those are in the range of… the average is about 400, whereas PMAs, the clock time is 180, days, but FDA's running pretty consistently at 800 days to review a PMA.

So, how… how do any of those overlap? Fernanda, with the reimbursement.

Yeah, so… And again, You know, we always… And thanks, Michelle, for that, really, because we… we always say that the reimbursement and the regulatory needs to happen concurrently, not in a vacuum. you have to really think about, some of the things that will be important, right? So, I actually mentioned some of this here. So, for a PMA, when you're going the route of PMA for green… for regulatory. Those are preferred by payers and, dreaded, really, by manufacturers. A 510K is actually the opposite, right? So preferred by manufacturers and dreaded by payers, because, again, there's really not enough data, necessarily.

So, all, really, every… every device or biologic or drug have different regulatory and reimbursement pathways. This is why, really, it's really important for us, for companies to engage early on and make those determinations accordingly.

So, there's regulatory red flags that are overlapping with the reimbursement red flags that are going to be hiccups into your commercialization strategy. So, just, you know, be on the lookout of… we've talked about it a lot already, unsubstantiated claims. unauthorized markets, missing documentation because you did not plan appropriately at the right times. Your strategies are disconnected across your market, your reimbursement, and your regulatory. You create a mismatch. And you have, unresolved regulatory impacts as a result. So… How does all of that affect your product development strategy?

So, Renee, do you want to address a little bit about the business plan?

Yes, yes. So, when you're creating your business plan, you have all of these cross-functional areas that need to be represented, but have clear crossover. So, when we're talking about regulatory and reimbursement. This is a point at which… and I'm going to share an example of a client that the three of us shared. We're working together, aligning regulatory with reimbursement and commercialization, actually helped them create a path that was quicker to market than what they originally intended. So it was a device used to diagnose a specific eye, disease. And so, initially. They wanted to go down the path of making some claims that would have

de novo, which, as Michelle said, takes longer, is more expensive, and there was no clear reimbursement path. So, we brainstormed with them and with our team, and we were able to find both a product code that had a lesser regulatory burden, it was a product code that actually was an FDA Class 1 registered device, so didn't even have to go through a 510K. And there were some existing reimbursement codes. So it wasn't the ideal package as to what they wanted to initially go to market with, but it gave them a baseline strategy because their technology could

Could do this other function that had a less burdensome regulatory path, had reimbursement, they could get into the market and start selling while they built their clinical claims to go back. And actually, make additional regulatory claims, and perhaps expand the reimbursement for the procedure. So, as you're going through commercialization and you're building that strategy, again, this takes into account also, like, the environment that your product will be used in and how it will be used, because as Fernanda said in the example Michelle gave. there was a product that was initially used as part of a CPT code in a clinician's office.

But that function then transitioned to the home environment. So you really need to be asking yourself these questions, you know, well, first of all, this is common sense. Do the users need it? Is it appropriate for the target market? Where will it be used? Will it be in a hospital setting? Will it be outpatient? Will it be in a home? Can the end users actually use it, and is it at the right… price point, and regulatory and reimbursement play a key part, and The answers to these questions. So… We have a tool, it's called a trace matrix, that helps you align all of those different areas that we showed you a couple slides ago, from finance, to sales, to regulatory, to reimbursement.

And if you go to the next slide, Michelle, here's what the tool looks like. And this is what we recommend doing. As soon as you have an idea, a new medical technology idea. Take a trace matrix. We actually have a sample that we can share with you if you're interested. And just make a note in the chat you'd like us to email it to you. But this is where you can start to align, not just on the functionality of your device itself. But then, okay, well, if you know you want to make very specific claims about your device, then you can start to identify what your regulatory strategy is. the testing standards that you'll be held to, and then reimbursement. And so this is a good time

to really brainstorm, like that example I shared before about that diagnostic device for the eye, where if it looks like you're headed down, for example, a de novo path, but you'd like to get to market quicker, start to explore with reimbursement and regulatory ex… what other claims could I make that my technology's capable of doing and could be covered by, existing reimbursement codes?

So, Sean, should we pause here and, have, the second poll question?

Well, and I also have… there's also a question that just came on on the Q&A chat, and I would like to… I'd like the opportunity to answer that, because I think it kind of segues, again, to what, really Renee was just talking about. So, they were asking if there's an opportunity to engage, you know, with CMS, just kind of like how you do it with FDA, like a pre-sub meeting. And the answer is, unfortunately, no. There is no… there's really nothing, no channels of communications that's available for CMS. But what you can do, let's say, for example, if you have identified a potential code that fits pretty well within your technology, so what you can do, you can submit an inquiry to PDAC,

And PDAC will reply back to say, Yes, you can actually use this code, or no, you cannot. But that's really the extent of feedback that you will get, unfortunately.

And I would note that, I already ran all three of the poll questions. They were consolidated into a single.

Oh, okay.

Perfect.

There was a question about the fee schedule, and so the slides are going to be available at the end of this call, so if you hang out, you'll get the link. Otherwise, you'll get the link tomorrow. Yeah.

Okay, so let's move on. So how can you go about de-risking, this, this pathway? Because, Mark, clearance, it's not the end of the race. It's just the very beginning, and people think the hard work's over, but you're just getting started. Renee, do you want to talk about the perception of risk in commercialization?

And this is… this was shared with us by a venture capital group that focuses on med tech, but it's really just true across the board. A VC's view of risk, and all of our view of risk, is if you look at, you know, technical, you have your clinical risk, you have regulatory. You see an acceleration in a VC's view of risk after regulatory, because you really, you know, need to do your homework about reimbursement, too. That's not always done up front. And then there's the commercialization piece. Will people even accept your technology? And so, in contrast to that. And most of the companies that we work with are in this bucket. They're new entrepreneurs to med tech.

They believe that once they receive their regulatory clearance, that the risk now in their time to market is… has been mitigated, and they're going to immediately start selling. So, all of the… the touchpoints that Michelle and Fernanda are talking to you about, the early planning, aligning your regulatory and reimbursement right up front. de-risks that commercialization phase, which is the riskiest And most expensive phase of commercializing a medical device, especially a new technology. So…

The key takeaway for your reimbursement and reiteratory strategies, think of it early, think of it often, and think of it through every single stage of your product development and commercialization cycle. You know, I think the three of us, even though we're coming from all different perspectives, in the pathway. We all sound like broken records, because we have clients coming to us, making the same bad decisions at the same bad times that's costing them time and money. And so we have to say these things over and over and over. and over. And sometimes we'll toss it to the other person so that they can hear it the same thing from somebody else, you know, so it… maybe the different voice will get in there. So if that's one single thing that you could think of, or do, is

plants… Early and often. So, Fernando, do you want to…

of it as an expense, either. I…

encourage that.

I think of it as an investment.

Yes.

who can align your regulatory and reimbursement right up front, like the example I gave you about the eye diagnostic device? If you could be in the market, let's say, in less than 2 years versus perhaps a de novo path that could take you out much longer than that and start generating revenue.

You know.

So, I would imagine that you and your investors would be pleased. So, again, it's an investment, it's not a… burdensome cost.

Exactly, and I mean, and look, we're constantly offering, startup specials, you know. 80% of our portfolio are made up of startups. That's really our passion. Anybody that we can, you know. catch earlier in the stage and prevent you from really spending a lot of money and not being able to really get what you need. That's really our goal, is to get you early. For very, very low cost. You can really develop a robust reimbursement strategy that will answer the mail for several things, right? So, investors have that question again. Okay, this is great, this is fantastic, I would like to invest, but how is this gonna get paid?

what does the reimbursement look like? So some of those things you have to really be thinking through. And again, it's not costly at all to start developing that strategy that can be, you know, improved later on, but at least get a starting point so you know exactly, What the situation is, what the landscape is for your product.

You know, one area, Fernanda, and we haven't talked about this, but this might be interesting for some of those folks that could be on this call that maybe didn't do the reimbursement planning up front. And I work with a lot of folks that unfortunately don't, so they get to market, and there's not a clear product code, so we start to develop these, like, economic models, and these hospital value calculators. Can you talk us through what the process looks like? If perhaps you have to start to create your reimbursement strategy after the device is cleared and you want to start selling. What do you need to do?

Yeah, no, I think that's a… that's an excellent point, and I think it's a webinar of its own to just really talk about the health economics aspect of bringing a new technology to market, because again, there are some codes that don't pay enough. Or there might be a situation, like Renee just said, that you kind of get… you're stuck, that there's really no reimbursement pathway clearly defined. So that's really where you have to turn your attention to developing a very robust, and, you know, really how am I going to say this? But anyways, it's… you have to really develop that robust economic story. So you have to tell… when you're talking to hospitals, they also want to see several other things, not just the reimbursement for,

for the product, right? For the service that they're using. So there's a lot of ways that we can craft that economic story, and that's another thing also that investors are looking to understand. What's the impact to the bottom line of switching, right, from standard of care to now using your device? What does that look like? So that's… that's, again, another thing that we help many, many startups with, is developing that early economic story to, to be able to communicate that effectively to, to hospitals, to payers, and… Yeah, that's another very important piece.

So what are your top recommendations, Fernanda, about how to navigate this?

Yeah, yeah, absolutely. So, it's to really engage a professional to understand Is there coding in place for… for this product that I'm looking to bring to market? How long is that gonna take? You know, can I use anything that's available right now, and what is the coverage… what does the coverage look like? Is it in place, or does it need to be developed? How do I really approach payers to, to really continue to develop that coverage or, you know, what is in there? Like, what kind of data will be required for me to provide that? And is there payments that support my pricing? I think I mentioned this in one of the previous slides, but

if the payment rate is very low and it doesn't support your pricing, we have to look at other ways. How can we make this, a, you know, a win for your company? Because, obviously, you need to make… you need to make profit to continue to develop products, so… and how long is that going to take? So those are some of the very important questions that you need to start thinking about.

Fernanda, can you speak a little bit to… is it possible to do a clinical study that will check, boxes for both reimbursement and regulatory, because that other area where I see my clients making, or assumptions that are incorrect, is thinking that boy, they did a study, and it was enough for FDA, but FDA's only interested in safety and efficacy. Right. And the reimbursement studies are, you know, primarily focused on, you know, like,

So, utility.

Yep.

Right, exactly.

Speak a little bit to the differences in what each body wants to see, and… and how you could possibly, or can you possibly, you know, use a clinical study for both purposes?

Yeah, so for the reimbursement, and thank you for that question, because that's great, and that's another point of confusion as well. So for reimbursement purposes, this will be really all the post-market studies, so post-FDA, those will be focused on the reimbursement. So to answer your question, no, not necessarily. When you're developing your trial for FDA purposes. There's really not… no elements of reimbursement that you can actually, include, unless, you know. Well, I think it's always good to just kind of keep that… keep that separate. What you can do, early trials, you can actually start thinking about considering some economic endpoints.

That, will be really important to communicate, to help communicate the value, of your product. So, that's absolutely something that a lot of companies can do early on, and then start thinking about some of those things. So, reimbursement will be the post-market studies, and those will be very important, especially when we're thinking about developing coverage. it becomes, again, very, very important, because when we're looking at post-market, it will be really to demonstrate clinical utility, which is really how physicians' behavior change based on your product.

very important. Again, payers are very, very interested in understanding, things like that. Yeah, thanks for that detailed explanation. So…

Absolutely.

Again, this is Fernanda with TTI, Health Economics, Fernanda at TTI, and Lenore and QA. partner together, to… to kind of move in lockstep with your regulatory and reimbursement strategy. So give us a call, if we can help you, with this kind of three-pronged approach, where we work on your commercialization, regulatory, and reimbursement at the same time. Just as a public service announcement. And for the sake of saying it over and over and over one more time. Think of these things early, and think of them often. So, give us a call, if you want a free 30-minute consultation, and we'll talk about how we can help you, and maybe have a deeper discussion on some of these questions.

Fantastic. So there were a number of questions put in the Q&A and in the chat, and… I'd like to start with my question, which I asked you in the chat, which is, you know, when, if ever, is a direct-to-consumer selling strategy, appropriate when there is… if there is no reimbursement pathway? you know, from a commercialization perspective, Renee, if you're still with us, you know, have you seen this work? Is this viable, or is this just not advisable? What do you tell clients?

So, it really… it's an excellent question, Sean, and it really depends on the device, its intended use, and the environment it can be used in. So, you know, there's not, like, a one-size-fits-all answer to that. I do encourage people, if they're exploring direct-to-consumer, you know, versus, you know, a more traditional kind of RX route, to definitely get in touch with us. But, I mean, I have examples of clients that I've worked with that started For example, in a… in a hospital with a device that was used to clean wounds, and… and irrigate the nose, and then eventually wanted to bring that over into the direct-to-consumer market. There are some additional, regulatory considerations and Consumer Protection Act considerations that you need to be mindful of.

But to your point, in that particular market, if you can strategically price it and it's appropriate for direct-to-consumer in the home environment, it can be very lucrative. I mean, you think about, for example, the NealMed sinus rinses, or neti pots. You know, that's a… that's a good example of a direct, you know, to consumer product. But, it is very… it is very dependent on the technology and how it's used. Michelle, did you have anything to add to that?

No, I just think it's interesting, especially in the digital health space, is that people come to us and say, Michelle, we want you to figure out how… what kind of claims do we need to adjust so that we can be a general wellness device and under enforcement discretion. And then, then they turn around, and then they say. Hey, Fernanda, how can we get reimbursement for this digital health product that's general wellness? Like, you know, you just gotta think of, like, all of those things are kind of contraindicatory, and again, a direct-to-consumer is very unlikely to have, any type of reimbursement coverage.

Exactly.

So let's talk about differentiation a little bit. You know, I imagine that there are a lot of 510K devices that are entering into a very crowded market. And, thinking about it in terms of, is it cheaper, is it faster, does it work better, what unmet need is being met, or do we just have a lot of also RAM devices on the market that really aren't properly differentiated, and what are their chances of Success, you know, both… both from a funding perspective, but, you know, raising funding with an undifferentiated product, how much of this do you see? What do you do when a client comes to you with an ugly baby?

Have Renee have an uncomfortable conversation with him?

Yeah, yeah.

And it depends on, yeah, how advanced that baby is and how ugly it is. But… So, to your point, so if you're… let's say you have a Me Too product, and you're just trying to get clearance for, let's say, another Foley catheter. There's a clear regulatory path for that, there's clearly, you know, some form of reimbursement, and you typically don't go to investors for that. That's… that's typically a product that, you know, someone will just say, you know, as a manufacturing company or a manufacturer, I'm… I'm just gonna bring this to market because I can do it cheaper. And then you have other technologies where… and… and this is actually a good example. Michelle and I worked on this. It was a… it was a product, for… it was… it was out of Europe.

for detecting skin cancer. And so, in the European market, it was helpful because you could use your cell phone to scan a lesion on your skin, and it could tell you, yes, that might be cancer, yes, you should be moved up in the queue to be seen by a dermatologist. Well, they came to the United States, and they talked to us. And, immediately we asked, well, can you use this to confirm whether somebody has skin cancer, and what type it is? And so, essentially, can you use this instead of doing a biopsy of the tissue? And they said, absolutely not. It's just a high-level screening tool, to say, yes, it might be cancer, and we want to be reimbursed for it.

So, you know, that was one of those conversations after we talked to some dermatologists who said, well, no, there's no need for that. I mean, if you want to be seen and try to, you know, understand if your lesion is cancerous or not, you're gonna… come in, and we are going to biopsy it. There's no need for this technology in the U.S. at this time. So we had to have that discussion with them, and sometimes it's uncomfortable, because they've invested You know, some money with us, trying to understand, you know, or trying to create the business plan, and then we have to go back to them and say, well, the users here don't really need it.

And then they have to go back to their… their investors and say, Turns out, the U.S. is not a viable market. oops.

Interesting.

And the only place you can sell this is the UK. Wait, what's it?

Right. By a night number of possibilities.

There, in the UK.

Fernando, you mentioned, post-market studies. What percentage of your work is post-market, and what percentage is pre-market?

So, we actually don't conduct any pre-market studies. To Michelle's point, you know, their regulatory trials are really focused on demonstrating safety and efficacy. Typically, companies, those are very small trials, they just engage, you know, a site that they've been working with for quite some time, and they engage a KOL that they've been working with to design their protocol and conduct those studies. So… you know, and post-market studies are actually our bread and butter. That's really our… our… our… what our expertise lies, and those are very important, like I mentioned, you know, very important to demonstrate, because I think another misconception is folks think that they, you know, once they demonstrate safety and efficacy of their product, that's done.

And it's not, right? It's not. So when we're thinking about developing that coverage for your product, there's several things that a post-market study will, will answer.

Fantastic, thanks for the clarification.

Yes, absolutely.

Similarly, Michelle, you know. in terms of Class 1, 2, and 3 devices, you know, what is the majority of the work that you see coming… coming from startups? You know, is it… is it primarily 510Ks? You know? What is the bulk of the…

It is primarily 510Ks, and just even statistically, 510Ks and the number of product codes that exist make up more than 50% of the market. Class 1s make up about 40%, and PMAs are only… they only make up like, 10… 5-10% of the market. I can't remember the exact numbers, but, it's… PMAs are really reserved for, like, life-sustaining, life-supporting. They take a lot of time, a lot of money, so the startups that are gonna go into a product that's regulated as a PMA, Are gonna need a whole lot of early-stage funding.

So, what I really see people that investors, you know, not shying away from is especially angel levels, which are usually one of the first sources of funding for, startups, is they want that kind of safety net of a viable 510K strategy.

Fantastic. I'm putting my email address in the chat. If anybody has any follow-up questions for me, or, for the speakers, please put them there. Someone asked, is there a separate path for my Class 1 510K exempt device? Send me that link.

path, or a reimbursement? What was the question?

Is there a separate path for my Class 1 510K exempt device? Send me that link. Reimbursement path, yes, it's a reimbursement path.

Okay. Yeah, I mean, I'll be glad to chat with you more about that, and take a look and see what your technology, you know, what your technology does, and how we can help. Absolutely, I'll be glad to answer that. Just send me some more information. I just put my email address in there, too.

Great. I'd like to thank the speakers for their time today, an excellent presentation. This is not a topic that I've seen covered in depth before, and, everyone for, sharing your time with us today. Reminder that we do have an upcoming webinar on clinical data transferability next week, on the 20th, so I hope that, you will all join us for that. Again, my email address is in the chat. If you have questions, please Feel free to reach out to me directly. Final words from Michelle or Fernanda?

Just thank you for the opportunity, Sean, it's been great. Again, feel free to reach out with any questions. I'm always glad to help and kind of guide you in the right direction. Thank you.

Ask me early, and ask me often. Once again, so… but seriously, I appreciate everybody's time today. I hope that this was, helpful and informative. If there's anything… other topics related to this that you guys want to maybe do a deeper dive in, you know, reach out and let us know. Leave us some feedback in the survey, so we would appreciate that.

Yes, please complete the survey. It'll pop up on your screen immediately. Thanks. Take care, everyone. Hope to see you next week.

Okay.

Bye.