Cracking the Code: Selling Your Obstetric Device into U.S. Healthcare Systems

Read time  8 minutes

In this month’s newsletter I share some of my personal experience in launching an obstetric medical device into the US following FDA clearance.

There might be several routes to consider that are context dependent, for example if you are bootstrapping the business vs. raising external finance.

The latter means you might have resources to build a US sales team which could speed up adoption by US healthcare systems.

I have a few personal insights to share, through our experience as a UK medical device business navigating the US healthcare system for the first time and obtaining approval for use by US clinicians and hospital groups.

I know this will be valuable for many others on a similar journey - let’s get into it!

1. Why Selling to US Healthcare Systems Is a Whole Different Game

Coming from the UK, we were used to selling into a public healthcare system, which required approval at each individual maternity unit with their own budget constraints and business case approvals required.

This was often a long and arduous process - I have examples of presenting to an NHS hospital for the first time and our device being approved two years after that initial meeting!

When I started direct activities in the US market, it was refreshing to see a shorter sales cycle, less pushback from a budget perspective, and a more receptive attitude towards innovation that could help improve patient outcomes.

The comment from clinicians was usually “how do we get this into our hospital?” vs. “I’m not sure there’s a need for this” in the UK.

In the US, I would quickly learn that many hospital formed part of a much larger organization and there would be a complex sales cycle to navigate - multiple stakeholders, value analysis committees, reimbursement pathways, evaluation/ pilot protocols, and several hurdles along the way.

If we could get obtain approval by a handful of major healthcare groups this would undoubtedly help drive adoption in the US nationally. We would have reference sites to create momentum, awareness, and excitement.

We had early success as a small team. I’ll always remember the first hospital in New York that approved our device. It was a pivotal moment and an experience we would hopefully replicate many times over.

Every conversation and interaction in those early days was an opportunity to learn about the US sales cycle. With this newsletter, I try and share some of that with others.

2. Know the System You’re Selling Into

Following FDA clearance, we focused on a handful of major US cities and key hospital groups within each. I’ll give examples here from my experience in New York but these would apply more broadly.

NYC from the UK logistically made sense. It was a relatively easy flight. There are several major hospital groups in the city, well recognised nationally. Potentially some of the more challenging groups to obtain approval but if we could do it here, we could do it anywhere.

If you’re analysing your target territory, it’s very easy to obtain data on the healthcare groups that operate within. We would initially try to understand the structure of these groups and in our case, identify those with the highest birthing volumes (this was a key metric for our device).

My advice - identify the Integrated Delivery Networks (IDNs) within that city. IDNs are a group of healthcare providers and facilities that work together to deliver coordinated care.

One of the first hospitals I made contact with was New York University (NYU), an IDN with three key birthing facilities. I would need to identify clinical decision makers at each site (hospital websites, LinkedIn are useful tools) and make contact to present our device for the first time.

Once I was able to get in front of these decision makers, I was invited to present to a system wide new product committee meeting. This would start to inform me of how buying decisions are made at the IDN level - Value Analysis Committees (VACs), sourcing, supply chain etc.

IDNs are one important example but you might also want to identify academic centers or those with a teaching focus. I would learn that residents would rotate, and often within the IDN and could become advocates for a product they were using at their previous facility.

If you’re looking for sites to engage in clinical research, identify key opinion leaders (KOLs) that might be interested in participating and who’s support could have wider commercial implications as your product gains traction.

3. What Healthcare Systems Care About

In my experience, US healthcare systems are interested in 3 things (among many others) when considering an obstetric medical device:

1. Patient Safety & Outcomes - you’ll need to prove why your device is beneficial for patients and lead to improved patient outcomes. We were able to demonstrate clinical efficacy through several published studies (many of which were presented to the FDA as part of our De Novo submission). Studies underway in the US would also be of interest. Any current users of the device could also provide reference points for direct clinical experience in the market. Sometimes a colleague or friend with a positive experience could have a huge impact. Equity and health disparities are also important, especially for obstetric innovations.

2. Cost Effectiveness - this is critical from a healthcare system perspective. If you’re able to demonstrate the potential clinical impact, what does this mean from a financial perspective? How many devices does the group expect to use on an annual basis and more importantly, from the system’s point of view. We built a cost-benefit model several years prior to entering the US market and were able to restructure this using US referenced resource costs. Consider building an analysis now as this will inevitably become an important tool for system level approval. Reimbursement should also form part of this analysis, if relevant for your device and procedure.

3. Workflow integration and training burden - develop an understanding of how your device will fit into existing workflows (e.g. where will the device be stored, who will ultimately decide to use it, what groups will be involved in its use) and the specific training requirements (will someone need to support initial cases, what training materials will be provided, how can you ensure all staff are effectively trained). Again, we developed much of this knowledge from activities outside the US but you would need to tailor this understanding to US healthcare groups.

4. Preparing Your Sales Toolkit

For those considering selling into US healthcare groups, below is a list of what you should consider compiling in advance of your US launch:

• Clinical data - present key finding from clinical studies in a clear and concise manner. We developed a short 2 page brochure that highlighted key outcomes. This would be easy to share with a clinician for the first time and could also be included in submission to the VAC.

• Cost-Benefit Analysis - to expand on the earlier point, your model might be complex in the form of underlying inputs and assumptions. Again, you need to present the output in a clear and concise format. In our case, we would give the example of a hospital with x number of deliveries and what this might mean in annual costs and potential savings for the healthcare group. This is critical from a VAC perspective.

• Risk mitigation strategies - clearly identify the indications for use (usually agreed with the FDA and included within your IFU) as well as any contraindications. Ensure the department is aware of any relevant risks that need to be considered.

• Training and implementation plan - you should already have a detailed training and implementation plan that can be replicated by all new users of your device. You need to make adoption seamless and make life easy for the clinician/ end user.

• Reimbursement clarity (if relevant) - ensure you have a good grasp of reimbursement pathways and again, make this easy for the provider. They are already busy enough without having to worry about how they get reimbursed for a new product or procedure.

• VAC package - finally, have a package prepared for the VAC that has all the information required well in advance of reaching the VAC approval stage. There’s no excuse for not being well prepared when you’ve already done the hard work in getting to this point.

5. A Strategy That Worked for Us. Consider an Early Pilot

My advice here it to start small. Identify a handful of sites that could perform an initial pilot on your device. By successfully completing a pilot in one hospital, this will likely support adoption across the wider system.

I had great success utilizing this approach in New York and our device was eventually approved by all the major IDNs.

How might you launch a pilot?

• Identify a major hospital group or clinician for collaboration on an initial pilot (there’s so much info available online to build a shortlist here)

• Meet with the department head of that group (e.g. Chair, Chief, Division Director etc) to introduce the device and gain clinical buy-in (this should include presenting clinical data on your device)

• Discuss parameters of an early pilot (what data needs to be collected by providers to support approval at the system level - both quantitative & qualitative, possibly in the form of a questionnaire to be completed each time the device is used). This data will be used to present to the new product committee following the pilot

• Offer a discount to support the pilot (or devices free of charge). Justified if this is the very first user (early adopter) in the country, which could drive national adoption

• Work with procurement/ value analysis to agree a free of charge evaluation (trial period, contract, vendor set-up, protocol, on-going pricing etc)

• Obtain a zero charge PO to mark the start of the pilot (confirmation you have been set up as a vendor)

• Provide initial and on-going on-site education to support the clinical teams using your device (critical to ensure a successful pilot)

• Regularly engage with providers to monitor initial uses and obtain feedback (this might come via a clinical champion)

• On completion of the pilot, have your clinical champion collate provider feedback for submission to the new product committee (or a committee of this type)

6. A Few Common Pitfalls to Avoid

• Being unprepared for the initial presentation - your first opportunity to present to clinical leadership is critical. You might not get a second chance. Consider the sales toolkit I discuss above and make sure your initial presentation is comprehensive in addressing all points. I also discussed sales presentations in more detail in a previous newsletter - Impactful Sales Presentations.

• Being unprepared for the VAC stage - prepare your VAC package and ensure you address all areas before you get to this stage. Many start-ups fail here because they aren’t appealing to the committee in the form of clinical evidence and financial benefits.

• Underestimating the approval timeline - in my experience, this can vary from between 6-9 months. Patience is key but more important than that is to ensure you don’t give them a reason to reject approval once you’ve done the hard work.

7. Final Thoughts

There will be nuance to the above list, but thinking about these points ahead of your US launch is a good start.

Hospital and system internal approval processes will vary considerably and have become more difficult in recent years.

We know that healthcare systems are slow to adopt new technologies. In the obstetrics space especially. Target early adopters and key opinion leaders.

You can then use implementation success stories from one site to sell others within the IDN.

Wishing you much success in navigating US healthcare groups!

As always, please feel free to reach out with any questions or comments. I now work as an advisor to several medical device companies looking to expand their operations into the US market.

All the best,

Nish

[email protected]

www.obgaccess.com