The prices of implantable medical devices to treat heart patients are up to six times higher in the United States than in Germany, according to a study published Oct. 1 in Health Affairs.
Two policy and economics researchers from London analyzed hospital survey data from the U.S. and four countries in the European Union, with an eye on how prices differed both within and between countries for coronary stents and rhythm management devices including pacemakers, implantable cardioverter-defibrillators and cardiac resynchronization devices.
Martin Wenzl and Elias Mossialos noted they undertook the study to help policymakers in both regions understand the magnitude of price variation and begin exploring what mechanisms contribute to those differences. Also, it’s difficult to enact policies encouraging efficient spending on medical technology, they said, without knowing the prices of devices and information on their appropriateness of use.
“Although prior studies from the U.S. and Italy suggest that prices of similar implantable devices can vary significantly between buyers, little is known about how those prices compare between high-income countries,” Wenzl and Mossialos wrote. “This is because purchase prices are often the result of negotiations or tendering between manufacturers and individual hospitals, group purchasing organizations, or healthcare payers. It is commonly accepted that prices are confidential, which allows manufacturers to increase profits by charging different prices to different buyers, depending on their bargaining power.”
Using surveys that provided quarterly data from 2006 to 2014 on hospitals’ device volumes and prices, the authors found marked variation between countries.
The gap was comparatively largest for bare-metal stents in 2014, which cost around $670 in the U.S. but only $120 and $130 in Germany and the U.K., respectively. Drug-eluting stents remained about $1,000 more expensive in the U.S. than Germany throughout the study period.
Approximate prices of pacemakers were three- to five-fold higher in the U.S. than Germany in 2014—$4,200 versus $1,400 for dual-chamber pacemakers and $3,700 versus $800 for single-chamber pacemakers. The rest of the implantable cardiac devices were about twice was costly in the U.S. than Germany in the later years of the study, Wenzl and Mossialos reported.
“Prices of most device categories also varied between EU countries, despite the absence of formal trade barriers in the EU single market,” wrote the authors, who also analyzed data from France and Italy. “Variation in prices of similar and identical devices suggests that factors other than their comparative effectiveness determine prices.”
The researchers noted there was significant price variation between hospitals within the same country, with the exception of France.
“Variation within countries suggests that manufacturers exploit varying levels of willingness-to-pay and bargaining power between buyers to charge different prices across hospitals and increase profits,” they wrote.
The study relied on the accuracy of self-reported survey data and couldn’t take into account any negotiated discounts, rebates or bundling that may have made net purchase prices different from invoiced prices. Another limitation of the study is it couldn’t explain the reasons for the price variations, which the authors suggested as an area for further study.
“While these findings can help assess whether technology-related policies effectively control the prices of cardiac devices, future research is necessary to establish a causal relationship between prices and several possible explanatory factors and help policy makers understand which mechanisms are available to control device prices,” they wrote.
Daniel joined TriMed’s Chicago editorial team in 2017 as a Cardiovascular Business writer. He previously worked as a writer for daily newspapers in North Dakota and Indiana.