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Evolving Reimbursement and Pricing Policies for Devices in Europe and the United States Should Encourage Greater Value

The Issue

New medical technology is a major contributor to the rising price of health care around the world. The United States spends twice as much per person as Europe does on medical devices and other health technologies, despite the lack evidence of commensurate gains in health outcomes. Most European countries consider value when determining which technologies to cover and at what price.

What the Study Found

The researchers conducting this Commonwealth Fund–supported study found that in most cases, the U.S. Centers for Medicare and Medicaid Services does not take into account a device’s comparative effectiveness or its cost relative to alternative treatment options when determining reimbursement. Coverage decisions are instead "based on poor or limited evidence from clinical studies," the authors write.

To bring U.S. spending on new medical technology more in line with its European counterparts include, the authors recommend:

  • requiring companies to submit extensive evidence that new devices are safer and of greater therapeutic benefit than those already on the market;
  • collect several years of data on the safety and comparative effectiveness of new devices once they are on the market to help determine pricing and coverage; and
  • base reimbursement and copayment rates on the evidence-based value of devices.


Growth in the number and complexity of new medical devices is a major driver of rising health care costs. To stem the tide, the U.S. should rely more heavily on studies of the costs and effectiveness of new technologies to inform coverage, reimbursement, and pricing decisions.

Publication Details

Publication Date: April 8, 2013
Author: Corinna Sorenson, Michael Drummond and Lawton R. Burns
Summary Writer: Naomi Freundlich
Citation: C. Sorenson, M. Drummond, and L. R. Burns, "Evolving Reimbursement and Pricing Policies for Devices in Europe and the United States Should Encourage Greater Value," Health Affairs, April 2013 32(4):788–96.


Research Officer in Health Policy, LSE Health, London School of Economics and Political Science