Early HTA to Inform Medical Device Development Decisions - The Headroom Method

The headroom method offers medical device developers a simple way to integrate health economics into the decision of whether or not to develop a medical device. By estimating the maximum reimbursable price (MRP) for a new device idea, and comparing this reimbursement opportunity with a developer’s expected costs, the method offers a way to ensure developers invest only in devices that are commercially viable. This paper explains the headroom method, and describes a study whose aim was to evaluate the method by applying it retrospectively to a large and diverse set of case studies. The method was applied systematically to 20 devices / diagnostics that were invented in the past (identified from the UK National Horizon Scanning Centre (NHSC)’s 2000 to 2009 database). Predicted ‘headroom’ was then compared with later UK National Health Service (NHS) uptake, in order to assess the performance of the method as a predictive tool. The headroom method predicted uptake with a sensitivity of 92% and a negative predictive value of 67%. When numerical headroom assessments were considered alongside the more qualitative factors identified (which generally reflected the clinical and market context), the method offered a good indication of commercial opportunity.