During the past half century companies have generally heeded Levitt’s (1960) advice to avoid “Marketing Myopia” by focusing on the customer. In the medical device industry this means, designing products with a focus on physicians without paying attention to an additional important stakeholder – the payor (i.e., a health insurance company / a health fund / a CCG). In this article, “Medical Device Reimbursement Myopia”, we follow the principles set in “The New Marketing Myopia” (INSEAD, 2009) and demonstrate how simple activities can help medical device companies correct the myopia.

1. www.mediclever.com
UK: 27 Old Gloucester St.,
London WC1N 3AX
: uk@mediclever.com
: +44.208.099.7435
US: 616 Corporate Way, Suite 2-4683,
Valley Cottage, NY 10989
: us@mediclever.com
: +1.845.570.2910
Israel: 6 Te’ena St.,
Modiin 71799
: il@mediclever.com
: +972.50.837.1711
MEDICAL DEVICE REIMBURSEMENTMEDICAL DEVICE REIMBURSEMENTMEDICAL DEVICE REIMBURSEMENTMEDICAL DEVICE REIMBURSEMENT
MYOPIAMYOPIAMYOPIAMYOPIA
1. The Problem
During the past half century companies have
generally heeded Levitt’s (1960) advice to
avoid “marketing myopia” by focusing on the
customer. In the medical device industry this
means, designing products with a focus on
physicians.
In a Working Paper called “The New
Marketing Myopia” (INSEAD, 2009) the
authors argue that companies have learned
that lesson too well, resulting today in a new
form of marketing myopia, which stems from a
single-minded focus on the customer to the
exclusion of other stakeholders.
In the medical device industry this new
marketing myopia occurs when companies that have physicians and regulatory
experts as part of their staff or advisory board, develop products without paying
attention to an additional important stakeholder – the payor (i.e., health insurance
company / health fund / CCG).
By standing on the shoulders of giants we follow the principles set in “The New
Marketing Myopia” and demonstrate how simple activities can help medical
device companies correct the myopia.
2. Propositions for Practice
The authors of “The New Marketing Myopia” set five propositions for practice,
which we segmented into the following 3 activities:
a) Map and prioritize the company’s stakeholders
In this part, referred to as the
‘reimbursement landscape’, the company
typically raises the following questions:
Can the company’s medical device fit
under existing reimbursement
mechanisms (appropriate codes,
coverage policies and payment rates) or
would the company need to develop new mechanisms?
Step 1
Reimbursement Landscape
The activities on the left are all
addressed as part of our Step 1
Reimbursement Consulting
Activities, named ‘Reimbursement
Landscape Report’.
Marketing Myopia Definition
A short-sighted and inward looking
approach to marketing that focuses
on the needs of the company
instead of defining the company
and its products in terms of the
customers' needs and wants.
The concept of marketing myopia
was discussed in an article (titled
"Marketing Myopia," in July-August
1960 issue of the Harvard
Business Review) by Harvard
Business School emeritus
professor of marketing, Theodore
C. Levitt (1925-2006).

2. Medical Device Reimbursement Myopia Page 2/4
www.mediclever.com
UK: 27 Old Gloucester St.,
London WC1N 3AX
: uk@mediclever.com
: +44.208.099.7435
US: 616 Corporate Way, Suite 2-4683,
Valley Cottage, NY 10989
: us@mediclever.com
: +1.845.570.2910
Israel: 6 Te’ena St.,
Modiin 71799
: il@mediclever.com
: +972.50.837.1711
Understanding whether the company should develop new mechanisms, and
which ones, may help the company focus on the relevant stakeholders and
align its strategy to achieve a new code, a positive coverage policy or just
change a payment rate.
Are certain payors more important than others?
For example, are certain payors considered early adopters in the field which
is relevant to the company’s device? Will the company’s device be used to
treat older people, requiring a focus on payors that typically cover the
elderly? Will the device first be used by patients with private health
insurance directing the company towards private payors, rather than
statutory/public ones?
Understanding current reimbursement gaps and the specific payors that
should be addressed is the first step towards learning about the requirements
of a stakeholder with a major impact on the company’s success.
b) Research stakeholder issues and expectations
In this part, which we typically refer to as
‘reimbursement planning’ the following
questions may be raised:
Can we claim that the new device
provides payors with both, clinical and
economic benefits over currently available
alternatives? (Based on previous
experience, in most cases, payors would
require both).
To answer this question the company should develop a ‘value story’ for the
device, illustrating potential clinical and economic benefits in comparison with
currently utilized alternatives.
Based upon the developed ‘value story’, an economic model is devised,
quantifying the economic benefit from the payor’s perspective, given the
company’s anticipated price for the new device.
Step 2
Reimbursement Planning
The activities on the left are all
addressed as part of our Step 2
Reimbursement Consulting
Activities, named ‘Reimbursement
Planning’.

3. Medical Device Reimbursement Myopia Page 3/4
www.mediclever.com
UK: 27 Old Gloucester St.,
London WC1N 3AX
: uk@mediclever.com
: +44.208.099.7435
US: 616 Corporate Way, Suite 2-4683,
Valley Cottage, NY 10989
: us@mediclever.com
: +1.845.570.2910
Israel: 6 Te’ena St.,
Modiin 71799
: il@mediclever.com
: +972.50.837.1711
Can we actually demonstrate those
clinical and economic benefits to payors?
In order to verify that existing clinical data
or a planned clinical study could be used
to derive the ‘evidence’, required by
payors, the company’s existing clinical
data is reviewed and possible
reimbursement-related points are added
to any planned clinical study protocol.
In some cases, it is possible to leverage
clinical studies that the company
conducts anyway, in order to derive
reimbursement related data, which will be
required later by payors.
c) Engage with stakeholders and embed their orientation
This is actually the last part of the above
mentioned ‘reimbursement planning’ phase,
in which the company contacts and
coordinates interviews with relevant payor
representatives in the local healthcare
system. The purpose of these interviews is
to obtain payors’ feedback regarding the
developed value story, the economic model
and the reimbursement aspects of existing
clinical data or the planned clinical study,
prior to initiating clinical studies or applying
for new reimbursement mechanisms.
According to payors’ feedback the company may wish to make modifications
to its value story, market price, a planned clinical study protocol, or proceed to
conduct the actual study (if necessary).
A flowchart of the propositions for practice, customized to guide medical
device companies how to correct the myopia and include payors’ interests
during their development process is depicted below.
Research with U.S. companies
suggest that many who claim to
give attention to stakeholders often
do so at a distance – they may
make efforts to consider the
interests of different stakeholders
in their decision-making, they may
even do research on stakeholder
expectations, but they don’t
engage directly with stakeholders
(Googins 2008).
From “The New Marketing Myopia”
(INSEAD, 2009)
In a discussion at AdvaMed
2013, Alan Muney, chief medical
officer at Cigna, said Cigna asks
three questions when considering
coverage for a new device:
1. Has it been proven by studies in
peer-reviewed journals?
2. Has it produced better
outcomes than current
technologies?
3. Does it produce the same
outcomes as current
technologies at a lower cost?
MDDI, Sep. 2013 (http://bit.ly/1aeIi48)

4. Medical Device Reimbursement Myopia Page 4/4
www.mediclever.com
UK: 27 Old Gloucester St.,
London WC1N 3AX
: uk@mediclever.com
: +44.208.099.7435
US: 616 Corporate Way, Suite 2-4683,
Valley Cottage, NY 10989
: us@mediclever.com
: +1.845.570.2910
Israel: 6 Te’ena St.,
Modiin 71799
: il@mediclever.com
: +972.50.837.1711
3. Summary
Medical device reimbursement myopia, demonstrated by excluding payors’
interest and requirements can have serious adverse consequences for any
medical device company. As healthcare systems worldwide are facing fiscal
constraints, commercializing medical devices without actually engaging with
payors may lead the company to design products and clinical trials that inhibit
reimbursement and could actually leave the device out of the market.
Amir Inbar is CEO, Mediclever Reimbursement Consultants, 27 Old Gloucester St., London, WC1N
3AX, UK; tel. +44 20 8099 7435.
With a chain of 30 experts throughout the world, and more than 150 clients
(www.mediclever.com/clients.htm), Mediclever assumes full responsibility for the reimbursement of pharma
and medical technology products - from reimbursement strategy development, through the organization of
local physician and payer interviews and focus groups, to the establishment of specific codes, payment rates
and favorable coverage policies.
1. Reimbursement
Landscape
Currently
available
reimbursement
options
Decision makers
Initial
reimbursement
strategy
3. Implementation
Communication plan, user base,
stakeholders’ support
Utilize existing reimbursement
mechanisms
Apply for new reimbursement
mechanisms
Main Decision
Makers
Healthcare
Providers
Payors
2. Reimbursement
Planning
Value Story
Economic Model
Reimbursement
related points in
available / planned
clinical data
Stakeholders’
feedback