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The trauma and clinical therapies groups are committed to providing cost-effective therapies to customers.  The U.S. healthcare market is rapidly changing as public and private payers become more cost conscious and increasingly demand that therapies demonstrate cost-effectiveness as well as efficacy.  To respond to the current market realities we are integrating health economic analyses as part of the decision tree for all products, through research and development to post-launch.  Health economic analyses have various applications.  They can demonstrate the value of a therapy or product to payers and providers.  They also can inform pricing decisions and can be important to ensure that patients have access to new technologies.  Clinical Therapies’ 2008 health economics analyses that are completed, ongoing and planned are briefly described below.

The EXOGEN Bone Healing System utilizes low-intensity ultrasound to accelerate the healing of fresh fractures up to 38% faster than normal healing.  It also is also highly effective for use on non-healing fractures. These fractures are a significant problem and a major cost to healthcare systems around the world. Clearly patients who suffer fractures which will not heal suffer great frustration and anxiety, and treatment from the EXOGEN system provides an improved chance to recover, invaluable for patients who may have previously been largely confined to hospital or their homes.
In Germany, Smith & Nephew have submitted health economic data from the Ulm EXOGEN Clinical Study to the KBV, and we are preparing to build a health economic model using the data.
 
Going forward, we plan to model the cost-effectiveness of each new indication.

SUPARTZ Joint Fluid Therapy is a non-surgical, non-pharmacological pain-relieving therapy for osteoarthritis of the knee. It is made of highly purified, sodium hyaluronate (hyaluronan or HA). Hyaluronan is a natural chemical found in joint tissues and in the fluid that fills the joints (synovial fluid). The body’s own hyaluronan acts like a lubricant and shock absorber in synovial fluid of a healthy joint.  We currently are conducting a retrospective chart review to assess the cost-effectiveness of repeat therapy through cost saving that result from delaying total knee arthroplasty.  Using these data we can negotiate insurer coverage policy changes to allow repeat therapy for patients who are not candidates for surgery or who wish to further delay surgery.

The Smith&Nephew,Inc. government affairs team is working with PharmAccess and SKK developing a health economic model comparing SUPARTZ to other HA products on the market.  The model evaluates the comparative effectiveness of the products based on the physician’s ability to chose a 3,4 or 5 injection course of therapy.

We are planning health economic data collection as part of the clinical trials for the shoulder indication.  Having these data will greatly facilitate the coverage process for the indication. 

Patients’ access to new and often cost saving technology often depends, in part, on adequate payment.  A careful analysis of a product’s economic effects on providers, payers and patients often reveals barriers to widespread acceptance, which can affect patient access to the therapy.  Our analysis of the reimbursement environment for the TSF revealed that computer dependent external fixation requires specific resources and physician interventions that are not required for standard, non-computer dependent external fixators.  The work for computer-dependent external fixation is not reflected in the codes available to physicians to bill for the application of the TSF.   In addition there is no mechanism in place for physicians to bill and receive payment for the TSF struts when the indicated strut changes are performed.  We have applied for and received a new CPT code for application of computerized external fixation and for computerized external fixation strut changes.  Last month, the AMA CPT RUC, the group that assigns physician payment values to new codes, calculated the weights on which payments for the new TSF codes will be based.  Medicare’s new physician fee schedule final rule, which will be published this fall, will contain the final payment amounts for the codes in 2009.

Intradiscal electrothermal annuloplasty (IDET) is a minimally invasive technique that reduces intradiscally mediated lumbar back pain by modulating nerve fibers in a disrupted disc’s annulus, and stabilizing the collagen of the annulus, thereby reducing pain associated with ongoing degeneration of the disc.  It provides a therapeutic option for patients who have exhausted conservative therapies and desire an alternative to spinal fusion.  During 2005, approximately 8,500 patients in the United States and 1,500 international patients had IDET procedures. 
In the UK, Smith&Nephew,Inc., working with Dr. Michael Grevitt and the York Health Economic Consortium, is preparing a health economic model that demonstrates the cost savings of IDET versus spinal fusion. 
The Smith&Nephew,Inc. IDET team participated in the European Spine Summit for development of treatment modules for non-hospital based spine procedures.   

DUROLANE Hyaluronic Acid is an HA product available in Europe and Canada and under review at the FDA.  Its treatment regimen will require just one injection, which is a great advantage compared with current products, where three to five injections are required to achieve equivalent results. For patients and doctors this means that the risk of injection-related infections decreases and that the patient does not need to come back as often. DUROLANE is based on non-animal hyaluronic acid, which eliminates the risk of allergic reactions and the transmission of diseases from animals.  DUROLANE will be approved for treatment of osteoarthritis of the knee initially, with an indication for treatment of the hip to follow.
In France, the CEPP has mandated ongoing health economic studies for continued coverage of DUROLANE.  Smith&Nephew,Inc. has submitted a health economic data  to the CEEP.  The CEPS mandates a health economic clinical model to be submitted by 2010.  We are initiating that project.
We also are gathering the evidence necessary for coverage the National Health System and Workers Compensaton in Australia.
For the US market, evaluations of health economics and patient access issues are ongoing. 

We are developing mechanisms for reimbursement strategy development in the new biologics division for new products including biologics alone, devices and biologic/device combinations.

We are active in a newly formed stem cell reimbursement advisory group that will work to remove reimbursement barriers currently in place for stem cell technologies.