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Center for
Social Innovation

Center for Social Innovation

Exubera and NICE

Academic Case Study by:
Stefanos Zenios, Robert B. Chess, Lyn Denend
Published: 2008
[photo - Stefanos Zenios]
[photo - Robert B. Chess]

Historically, the biggest obstacle that health care innovators, such as pharmaceutical and medical device manufacturers, needed to overcome on their way to market was securing approval by the U.S. Food and Drug Administration (FDA) or other regulatory authorities.

However, in the last decade, a new (sometimes even more challenging) hurdle had to be cleared--insurance coverage and reimbursement. Payers—either public payers, such as Medicare in the United States and the National Health Services (NHS) in the United Kingdom, or private commercial payers, such as Blue Cross/Blue Shield and UnitedHealth Group—could deny coverage for a technology that had received regulatory approval if they determined that the supporting evidence did not adequately demonstrate that the technology was superior to existing treatment alternatives that were already being reimbursed. This had the potential to create a potentially adversarial relationship between payers and innovators in cases where they had conflicting interpretations of the evidence regarding the cost, benefits, and risks of new technologies. The challenges to innovators in managing this conflict are illustrated in this case study: The 2006 decision by the NHS to deny coverage for Exubera, a new form of inhaled insulin.

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Paper Copy: You may purchase this case from Harvard Business Publishing.

Case No: OIT80