How (Much) Should We Pay for TAVI? David J. Cohen, M.D., MSc Director of Cardiovascular Research Saint-Luke’s Mid America Heart Institute Professor of Medicine University of Missouri-Kansas City

Disclosures Grant Support/Drugs Grant Support/Devices Eli Lilly/Daiichi-Sankyo - Merck/Schering Plough Eisai Pharmaceuticals - Astra Zeneca Grant Support/Devices MedRAD - Boston Scientific Edwards Lifesciences - Abbott Vascular Medtronic Consulting/Advisory Boards Medtronic - Eli Lilly/Daiichi-Sankyo Cordis - Boehringer-Ingelheim DJC: 2/11

Standard Approach: “Pay what it costs” Manufacturer sets the price for the device, taking into account production costs, R+D, ROI, etc Reimbursement covers device cost plus implantation costs Coverage policy used to control overall budget by restricting use to well-defined indications where benefit is well-defined (“treatment is reasonable and necessary”) Strengths Hospitals recover appropriate costs Payers control budget and off-label use Limitations May restricts innovation in delivery Financial risk shifts to providers

Alternate Approach #1: It’s a valve… pay for it like a valve! Advantages Prosthetic valves are established technology and have an established market and reimbursement structure Approach similar to rest of world Disadvantages Discourages innovation since companies cannot charge a premium to recapture R+ D costs In the current economic environment, is innovation an important goal of our healthcare system? May be unnecessary since costs will come down eventually as competitors enter marketplace (e.g., DES)

Alternate Approach #2: “Fee for Benefit” Concept originally proposed by G. Diamond Reimbursement should be proportional to the with level of expected health benefit Advantages Encourages innovation in areas of greatest unmet need Strong incentives to provide highly beneficial and cost-effective care Disadvantages Level of benefit varies considerably with patient population (e.g., no option, high risk, low/intermediate risk) challenging to administer

Alternate Approach #3: Pay for it like an analogous treatment Hazard Ratio 0.52 (95% CI 0.34-0.78) D 1-Year Survival = 20% Hazard Ratio 0.52 (95% CI 0.34-0.78) D 1-Year Survival = 27% LV Assist Device Medical Therapy PARTNER Cohort B 1-Year Survival = 20% Valve Cost = ???? Hospitalization = ???? REMATCH Trial D 1-Year Survival = 27% LVAD Device ~$80,000 Hospitalization ~$150,000

What should TAVI reimbursement be? It depends on the priorities of the healthcare system The most “rational” approach (fee for benefit) has substantial disadvantages in terms of administration and operations The most likely approach (pay what it costs) will likely result in increased healthcare spending due to the high cost of the valve technology Stay Tuned Formal cost-effectiveness analysis of the PARTNER trial will be presented at ACC (Opening Plenary Session, Sunday April 3- 9:30 a.m.)