After several long months, the Centers for Medicare & Medicaid Services (CMS; Baltimore, Maryland) in late September agreed to expand the coverage of ventricular assist devices (VADs) as permanent cardiac support for certain Medicare beneficiaries. Currently, VADs are only covered as a bridge to heart transplant or as a support for blood circulation after open-heart surgery. Ventricular assist devices are mechanical pumps that can assume some of the functions of the damaged heart. They are effective in restoring hemodynamics and enhancing end organ blood flow in the body. The news comes nearly eight months after the Medicare Coverage Advisory Committee (MCAC), an advisory panel to CMS, gave favorable votes to questions concerning the effectiveness for such devices, classifying them as providing substantially effective outcomes for patients, a ranking second only to that given for "break- through" technology.

At the time of the MCAC decision in March, companies involved in the field such as Thoratec (Pleasanton, California) and WorldHeart (Ottawa, Ontario), had hoped for a CMS coverage decision in 90 days and that the outcome would result in "the majority of potential destination therapy patients" being covered by Medicare. But CMS has twice postponed the time for issuance of coverage amounts and guidelines, first setting a deadline of Aug. 13, and then saying it would issue a decision by Sept. 15. Issuance of the guidelines is expected later this month.

A positive note was sounded by a report in the Federal Register indicating that CMS "has made technical adjustments to the final rule, published in August 2003, regarding the relative weight and base level of reimbursement it will provide under a revised diagnosis-related group (DRG) 525 'Heart Assist System Implant.'" In a press statement, Thoratec said it believed the change would raise the base payment under the revised DRG 525 from about $54,000 to around $70,000, about a 25% increase in the reimbursement rate. Furthermore, the company estimated that in many cases the actual payments to hospitals under this revised DRG will be higher and in some cases as much as double the base payment based on geographical location and other factors. As reported in the Federal Register, hospitals also can qualify for additional payments under outlier payment policies that could provide another $20,000 to $30,000, depending on the hospital's actual charges. "Importantly, these changes are effective for patients discharged on or after today, Oct. 1, 2003," Thoratec said in its statement.

Currently, Thoratec's HeartMate XVE left ventricular assist system (LVAS) is the only such device approved by the FDA for destination therapy in end stage heart failure patients, receiving clearance for that indication in April. The original HeartMate VE was the first device to receive a destination therapy indication in the U.S., accomplishing that feat in November 2002. The HeartMate XVE costs about $200,000 per implant, including hospital and doctor fees, a factor that likely contributed to the delay in coverage approval. The device alone costs $60,000 to $65,000. Only patients who meet the criteria established in the landmark Randomized Evaluation of Mechanical Assistance for the Treatment of Congestive Heart Failure (REMATCH) trial end-stage heart failure patients who have a life expectancy of less than two years and are not candidates for cardiac transplantation are currently eligible for reimbursement with the device.

WorldHeart, maker of the Novacor LVAS, also showed enthusiasm for the coverage decision, which it said will make the therapy more easily available to American patients waiting for a donor heart, the only indication that the company's device has been approved by the FDA to date. In Europe, the Novacor LVAS has unrestricted approval for use as a bridge to transplantation, an alternative to transplantation and to support patients who may have an ability to recover the use of their natural heart.

Drug/device combos reveal personnel gaps

"You see different seasons come and go [in medical technology] cost-cutting, consolidating, different dynamics constantly shaping the industry," says Richard Arons, PhD, noting that one of the most important today is in the confluence of drugs and devices. While that trend is usually addressed on the technological side for instance in the current emphasis on drug-eluting stents the convergence is too often ignored on the "human capital side," says Arons, managing director of the global medical device and diagnostics sector at Korn/Ferry International (Los Angeles, California), one of the world's leading executive search firms. Arons, based in the company's Princeton, New Jersey, office, is the primary author of a new white paper, titled "Drug and Device Combinations The Leadership Challenge," issued to highlight some key issues specifically, the limited pool of talent currently having these dual skill sets and the need to more aggressively recruit and retain those who have them.

Arons has seen a sea change in the drug/device relationship. Early on, he saw the large pharma companies divesting their device entities, with Eli Lilly's spin-off of Guidant (both Indianapolis, Indiana) being the bellwether example. And, overall, pharmaceutical firms had "zero interest in devices," he told Cardiovascular Device Update. "They didn't worry about the potential synergies between drugs and devices," and when they needed to fill this gap, they usually did so via strategic alliances. "Even those pharmas that had both [drugs and devices] under their roofs were not exercising the potential synergy that sat there. It was latent rather than realized," Arons says.

But over the past five years, he notes that the rising emphasis on drug-coated stent technology "has awakened the idea [of drug/device combinations] in a profound way. There's no question that the attention, all of a sudden, is around active molecules combined with devices, growth factors in the orthopedic setting, active molecules in wound management and anti-adhesion and [new device systems] for delivering chemotherapeutic drugs." This rising tide has created a new organizational need, but one difficult to meet given the limited number of people with the combined pharma/device competencies. The key areas where the combined experience is necessary, he says, are in regulatory affairs, quality assurance, research and development, and manufacturing.