Device sector hopeful of avoiding new round of price cuts

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The medical device sector is increasingly hopeful it will successfully resist pressure to further reduce prices ahead of next year's private health insurance premium round.

As recently reported by HealthDispatch, the federal government has been pressuring the sector to accept price reductions with the goal of delivering an average annual premium rise of potentially less than 3 per cent.

The discussions have been significantly focussed on high volume but relatively low priced items on the Prostheses List. However, it is understood the sector's resistance may have been effective, at least for now.

The Medical Technology Association of Australia (MTAA) signed a strategic agreement with the federal government in 2017 under which it agreed to price reductions to be passed on as lower private health insurance premium increases.

Under the terms of the agreement, the federal government agreed to, "Making no other changes to benefits on the Prostheses List during the term of this Agreement without agreement with the MTAA on behalf of the industry."

The wording, along with the fact the federal government has only an indirect financial interest in the pricing of medical devices, makes any change under current policy settings very difficult without the sector's agreement.