Access Granted — How to Attract Investors and Corporate Allies for Your Startup | LSI USA '25

Dustin Atkinson  0:05  
Well, good morning and welcome. Thank you for joining us for the market access granted workshop. I'm Dustin Atkinson. I'm a senior director with bare necks and our commercial strategy market access group, and I really I just want to set the stage for the program this morning, the goal of this session is to highlight market access strategies that can make or break funding and partnership opportunities. That's the goal. Our hope is that you walk away with actionable insights that position your innovation for investment and ultimately long term commercial success. So we have two leaders in the space today that are joining us. I'll pass it to Tim if you want to introduce yourself,

Tim Sheflin  0:45  
sure. Thank you. Dustin, hi everybody. Tim sheflin, with verenex as well. And I've been working in market access since it was called reimbursement, since it was called coding, there's obviously a lot to market access related to distribution and Kol relationships, all those different types of things. But when I started working with companies over 20 years ago, a lot of my work was just, how do we understand how Medicare pays for things? What is the coding environment? What is the coverage environment? What do we need to do to remove some of the artificial things that can get in the way of a doctor wanting to prescribe a certain procedure or diagnostic. And what can get in the way from a claims processing standpoint, it can really trip, trip, trip, a lot of manufacturers up, and that's what I've been working with them for over 20 years.

Dustin Atkinson  1:42  
Adam 

Adam Rosenwach  1:42  
Cool. I'm Adam Rosenwach. I started as a musician, and now I am the Chief Business Officer at Deerfield Catalyst. It's a long story on the transition, but what we do is we do early stage innovation. We're deerfields innovation arm, and the reason I'm sitting here today is our conversations with VCs and the way that we look at projects have really shifted in the past couple of years. It used to be, how are you going to overcome regulatory hurdles? And that's all anyone wanted to talk about. And now the first question is always, who's going to pay for this? So happy to be here and happy to dive in. 

Dustin Atkinson  2:20  
Adam has the most interesting background of anyone in the room, so if you get a chance to if you get a chance to talk to Adam, learn more about his background. So the structure for today is, Tim's gonna walk us through some slides on the opportunities and pitfalls around market access, and then we'll have a Q and A and then we'll open it up to you guys to ask your questions. So Tim, I'll pass it to you

Tim Sheflin  2:41  
over the years, one of the last things I've found helpful in these types of forums is to go through the acronym and alphabet soup associated with a PCS, ASCs, DRGs, CPTs, all those different types of things. It's incredibly daunting, I think, for you know what I like to call innovator companies, whether they be startups, whether they be founder funded, they are thrown into a realm that maybe, if they were a physician scientist, they have some experience with their practice, but not a lot. It also has changed a lot over the years, and keeping up with it is incredibly daunting, and a lot of times what we see is really a desire to get it out of the way or put it off for as long as possible. As it relates to developing a coherent strategy that they can communicate with investors, they can communicate with strategics on what their plan is. So I gotta do it both ways, don't I? Okay? So the way I have these set up a little bit on the upper right hand corner, they're a little bit of caricatures. I've gotten direct quotes from folks we've been working with that are very similar to these quotes, but I am leaning into, I think some of the common things that trip people up. You know, I think failing to acknowledge the complexity of the system, or not even the complexity of the system, at certain points, it's actually quite simple, once you remove some of the hurdles around what, knowing what some of these things are, is, but failing to acknowledge it and communicate a strong understanding of it, oftentimes, is a red flag when we're working for strategics, doing due diligence on a investor deck on and sometimes a single slide in market Access and reimbursement, we come across this a lot, so acknowledge the need to demonstrate competency here. The quote is, we already have, there's, there's already a CPT code, so we really don't have to worry about reimbursement. So a lot of companies will just run with that. They'll get that advice from somebody and move on. And they'll have one slide. Here's the CPT code, here's the Medicare payment rate, and that's their market access strategy. And I don't think that's what a combination of investors or strategics are looking to get from companies when they start diving into exactly what the plan is. So let's presume there is a scenario where there is a CPT code out there for a particular procedure. What do you know about it, other than the code, the language and its payment rate for Medicare, is that payment rate appropriate for your business model? Is your selling model work into that? Can the provider be made whole if they're using the CPT code. Have these codes changed recently or frequently? Right? Recent or frequent changes in a lot of circumstances can mean the code you're looking at or that you've pinned to your your technology may not be there in three or four years, or it may be a sign that it's something that Medicare is taking a strong look at, or commercial payers are taking a strong look at and saying this isn't working for us, because providers are reporting this code and it's not accurately representing what's being done. Does it appear in positive coverage policies? So Medicare puts their local coverage determinations in a database. Anybody can look it up with some key terms and CPT codes, commercial player payers, you can go online. They will tell you how they intend to process a claim with this code. If you haven't done that, somebody like me is going to come in and say, they say, you know, they're saying that this code means they're good to go. It's associated with negative coverage policies out eight of the top 10 payers in the United States, including Medicare. That's a real problem. It's overcome. It's something that you can address going into the future, but not knowing that puts you at risk for seeing for being considered somebody that hasn't looked at this seriously enough. I uh,like I said earlier, if you have a single slide, sometimes we've even seen a single bullet point addressing market access. It also can be a red flag you haven't taken it seriously enough you don't know enough about what's going on here to communicate to the people who want to invest in your technology that this is something you're thinking about. The other thing we see a lot is certainly for 510, K approvals, oftentimes you're trying to get to market fast with the trials that you need, but not necessarily for the way that you envision the technology change in care, not necessarily the way that you actually think that providers are going to use your technology. Problematic potentially from a compliance standpoint, but it's actually a significant problem from a market access and coverage standpoint as well. It's also a problem for groups who are looking and trying to understand exactly what the opportunity is presenting. How large is the market? How can they look at things like your valuation, your forecast, if they don't know exactly which procedures you intend that it's intended to be used in. So, you know, one of the things that we see a lot of times is this technology is going to change things. It can be used here, it can be used here. It can be used by neurologists. It can be used by endocrinologist it can be used that creates a lot of uncertainty as to what the market access environment is if you have a technology that is going to change all those things that's going to happen in the marketplace over 510, 15 years, not within the first two years, when you're trying to either have an exit demonstrate your competency by generating revenue, those things are to come back to haunt you very early on, after All the positive press announcements, for the 510, K, or whichever application you've gotten through the FDA. So I think historically, FDA approval meant go. And I think in a lot of cases, that mentality is something that still resists in earlier companies, strategics, investors are starting to get wise to it. I remember 2002 meeting with a venture firm, and they said, Hey, this is our top 10 things that we're looking at. And guess what? Reimbursement and market access is 10 on this list, and we just put it on for the first time. That's not the case anymore. We'll let Adam talk to where it ranks or where it doesn't rank. But those types of things are critical. I think one of the things that we always sort of stress is you can pivot. Things can change as you learn more about your technology. Technology and how people are going to use it, and it actually that's the best way to develop a clinical value proposition. Is on the market with people using especially for medical devices, right? In a lot of cases, they're tools, not necessarily something that has a specific use, but you're not going to get to widespread use unless you have an approved use that can be covered by insurers, that people can buy and recoup whatever they're doing in terms of their investment as a provider or hospital into the technology. So assessing the magnitude of what that best use case is, or best intended use, I'm not a regulatory consultant, so I get a little bit wary when I start using those types of turns. But who's going to pay for it starts with who's going to use it and how and why, right? And it can't be something that has a very broad 510, K approval, where people are saying, Oh, that's great. Show me the evidence that works in these patients. Show me the evidence that works in those patients, and we'll pay for it in these or those. Right? These or those. So build your evidence development plan and your market access strategy around and again, you can pivot as information comes in from your initial studies, but you have to start talking about when it's going to be used, why, what it's going to replace, what the cost offsets are, even if it's something that adds to the cost, who is the adding that cost to is it providers is adding that cost to hospitals? Already started alluding, alluding to this, what the FDA states on technologies, is an incredible milestone, and they're trying and working to adapt to innovation, you know, something like breakthrough device designation. You know, you talk to anybody early on, they're talking about, well, I think we may have a shot at at BDD right. Breakthrough device designation is huge. It gets us fast tracked. It means automatic coverage by Medicare. Do we know what that means, right? What does automatic coverage from Medicare? Medicare hasn't figured out exactly how they're going to handle BDD, right? So if this is something that's happening in the next year, you still have to figure out exactly how Medicare is going to handle it. There's T set and other things that they're working towards, but it's not immediately clear exactly how that's going to happen in the future. Beyond the uncertainty, we can talk a lot about uncertainty and how CMS is going to handle things over the next couple of years, right? But understand what that means. If you are a BDD, for example, in an inpatient environment, Medicare is already paying for your technology. They pay for it through a diagnosis related group. It's covered, right? It's paid for. It's a lump sum pump, the payments to hospital based off of procedures and diagnoses. If what you're trying to communicate is there's going to be incremental and improve payment. How are you going to get there, right? Are Have you established a plan to make sure you meet certain criteria to get n tap approval, but just throwing out there that the FDA has says we're breakthrough, and Medicare has says they're going to cover it even in administrative rules and even in statute, in some circumstances, you're not done. You need to communicate to investors, to strategics, that you can actually leverage that designation going forward. So what does a good plan look like? Sure you can't read all these things, and I haven't even advanced the slide. You know, it doesn't have to be 30 slides going into the history of the CPT code, but you need to start understanding and communicating that, hey, we know this is going to be hard, even if, on the surface it looks easy, right, we need that. We're going to have to align a lot of different stakeholders to make sure that we can line up and not lose quarters, not lose halves of the year to a specific hang up and reimbursement because you didn't apply for a code here, or you didn't get the specialty society's endorsement and they torpedo your application, right? This is a multi stack stakeholder plan that you have to coordinate payers, you have to communicate with KOLs. You have to understand what hospital purchasing and hospital you know, depending on where your technology sits. And then you know, if we want to talk about how things are changing rapidly. If you have a technology that supports an existing service, which is the way I, as a non scientist, likes to think about it. That could be, you know, machine learning. It can be whatever you want to tag to it, right? How is that actually going to be incorporated? But the value of. Your technology, your innovation, is wrapped into the current payment system. And is there a chance to change the payment system? Groups like admin can work on those different types of things. But one thing you see here repeatedly right, is advocacy, not just for adoption, advocacy on guidelines, advocacy on coding, applications, direct advocate, advocacy with payers, hospital protocols, all those different types of things. It's multi stakeholder, and you need to bring everybody along with you, investing in evidence. So one of the things that we routinely do is we'll just talk to medical directors at plans. It's not a quantitative study where we can help you pick exactly what your price is, but we're going to understand where some of the hang ups are going to be, and we'll have a good understanding of what your initial trials are looking like. They're going to have outputs. Do those outputs resonate beyond the FDA, beyond the FDA standard, are they going to resonate with providers? Are they going to resonate with payers? And, you know, if we ask them, sort of blindly, they'll say, Oh, this is great. I want a five year outcome study, randomized, controlled study. You know, I talked about coding being daunting. That's terrifying, right? In a lot of circumstances post market, but you need to start thinking about how you can relay to some of those stakeholders that what we're doing here is going to have a meaningful impact on your plan. There are going to be cost offsets, or this is an orphan disease. It's not going to hit your budget too bad, and it's going to make a big difference. There are all kinds of different arguments that you could make, but what currency they utilize is what's coming out in peer review journals. And a lot of times we'll be talking and say, Oh, but so and so company did this, and they didn't have to do this study. That may or may not be true, but you need to communicate to investors exactly what they're getting into as it relates to what type of evidence that maybe they're going to have to help generate, or they're going to have to help fund. You know, late news is is bad news, is bad news, but late news, you know what I'm trying to say, right? You know, if you get to the point where you have nothing planned, and you have to start from from ground zero on generating post market evidence development you're in big trouble. The value of your company and the value of your asset is something that hasn't considered all the costs, and hoping somebody can sweep in, swoop in, and invest in that is going to be tricky. But you can start planning for that now. And some of that comes down to that first question, what is this going to do? Who's it going to do it for? How much is it going to cost? How is that going to get paid for? And what do we need to do to demonstrate some sort of return on that investment doesn't always have to be financial. People can talk about payers, and you're always trying to, and that's true to a certain extent, but the benefit can be clinical as well, especially with strong advocacy, right? Those different sorts of things. There's a sort of tragic scenario that we run into every once in a while where somebody's done everything right, and they've hit the wrong time of a coding application cycle, right? They have tremendous evidence. They've planned the trial a lot of times. We'll see if somebody will have applied for a code before. Oh, apologies all. Thank you. Thank you. And the evidence that they need to generate the pressure on payers, the pressure on CMS for a Hicks code, or the pressure on the specialty societies and amas for a procedural code, the evidence isn't there yet, right? They've applied for something too soon, and that can be hard to undo. The coding and post market milestones are oftentimes very rigid, right? For a lot of our clients, when we're working for startups and we're working for investor back companies, we talk about aligning your payer message and your active engagement of payers, and your coding strategy around when the optimal evidence will be available. If you do that too soon, it could really hang up. It's very hard to reverse a negative coverage decision. It's very much harder to reverse a negative coverage decision than it is to have no coverage determination at all. It's very hard to go back and apply each year for a code and have it be a matter of public record that you were rejected or you got a less than optimal coding outcome, which can happen as well. Yeah, so aligning your Evan, your post market evidence, and again, some of some of you may be looking at it and saying, Well, at this point, I plan to be somewhat detached from this, because this is going to be a strategics problem, right? I'm taking it so far. That's okay, right? Some of you may say, actually, I want to take it the first two or three years and then sell it right, or maybe just take it the whole way, right? But these are things that can be acknowledged now, even if you don't have an A to B to C to D, plan to do it for sure, if you acknowledge, when you're talking with groups who are interested in your technology, that these are the things that gonna have to happen. They will have faith that you're being straight with them going forward as well. I think that was my last prepared slide.

Dustin Atkinson  20:53  
All right. Thank you, Tim. All right. Adam, we heard from Tim on pitfalls, what to think about and how, what innovators should be looking at. What do you look at when assessing from an investor perspective? What do you look at when assessing a company seeking funding in regards in the context of market access?

Adam Rosenwach  21:13  
So So first to set the stage, please, we we're both innovators and and investors. And by investors. I mean, we will look at technologies and decide if, if we're going to partner with them, and then bring them in house. We're more of an incubator model. So we're much, we're much more on the side of, okay, we have an idea. We have we have a project run and move forward. How do we think about each of these elements? That's That's key to getting funding, and so we're raising money in a similar way to most people here are. I'll say this, I think there's an unrealistic expectation on companies, especially CEOs of companies, that they have every single area of of the business figured out and a mastery of it. That's completely unrealistic. But when you go to pitch something right now in this environment, VCs have a list of 10 things, and you need to check pretty much every one of those in this in this current environment in order to be an investable technology. And one of those is, is regulatory. So I sorry, one of those is reimbursement and market. So I can't rank how important it is, but I can tell you, if you don't have this really figured out, and you haven't put a significant thought into it, you're not you're not going to get funded. And unfortunately, something that is a common mistake, and we've made it as well, is presenting that slide, and the numbers are just completely unrealistic. They're based on on a quick, you know, market research on Google, and it sends a red flag to the investor, sends a red flag to strategics. It just sends the wrong message to the people that you're asking to give you money. So I guess to tie that all up, yes, obviously it's, it's super important, physiology, regulatory pathway, you know, who was, who is the strategic enterprise. All these things are important. And generally, CEOs, it's just not their strength, but it is something that you are going to have to have figured out and be able to communicate to your investor. So,

Dustin Atkinson  23:26  
Yeah, perfect. So maybe a question for both of you around timing. So when, when should innovators start prioritizing or focusing on issues like market access and reimbursement your service? Tim.

Tim Sheflin  23:39  
Sure, I think serially is the way to go, right? You know, working with startups, there's not always a quarter million dollars to do a pricing study, right? It's different. We have to understand what's going on, but we recognize, I think, where many of you are in your development, there are a lot of things that you can do early on, as you're working through exactly how you're going to get through the FDA, that can be very meaningful, understanding that you can pivot, and you'll probably have to pivot. There's a lot learned about a technology in the early stage as it's how it's going to be useful, or which patients is going to be most helpful. You'll be relying on your KOLs to say, Hey, I know you were thinking this, but I kind of think that serially is a good way to do it right. You can take some small dips in early on, understand the coding environment, get more knowledgeable, talk to a few people in a market research capacity, and then revisit it a year later as things change. You know, I think a lot of times people will say, how early is too early? There is a too early. But there isn't necessarily a sense that. That you're only going to get one shot at it right, serially, I think is the way to do it, revisit it from time to time, because the environment is going to change. 

Adam Rosenwach  25:10  
Yeah, yeah, I agree. And also, it also says a lot about a CEO or a leader of a company, the way they approach this, right? If you're coming in day one and you've spent $200,000 on this, and you're right at the beginning of a company that this is, this makes no sense. It gives, it also gives a bad vibe about about this person, like, why are they spending all their time on this? But you have to have put in the effort to have somewhat of an understanding when you come to that first meeting. And then, obviously, the later a company is, the more the expectation would be for their understanding the market, the closer they are to going to market. But that pivot piece is also super important, because I don't know what percentage of companies, but obviously it's high that go in for one thing and end up somewhere else. And we want to make sure that there are other pathways out there. And that pivot is already thought about in the beginning of okay, this is, this is the indication we're going after, but there are other indications, other pathways we can take that. And that's how we approach most of our projects when we're thinking about it, day one from brainstorming, okay, this is the indication we're going for right now. And if everything goes well, this is where we're going to end up. But hey, this might also work for X, Y and Z.

Tim Sheflin  26:19  
Yeah, there are a lot of pivots in the world of market access and coding strategy and those different even post market evidence development. So acknowledging early on with groups and with folks that you're talking to about your business that, hey, this is a technology that we're still developing. So we don't know exactly where the data is going to lead us in terms of its actual use case, or where it's going to be most valuable clinically, but we understand enough that if it goes in this direction, we can, we can establish novel coding and payments. If it goes in this direction, will actually fit really well with the economics of how that how a hospital outpatient centers get paid, or how the ER gets paid, or the ICU. So those types of pivots, I think, in acknowledging is really helpful as well, that there are forks in the road in the future, you don't have to make the decision.

Dustin Atkinson  27:13  
So we talked about timing. What about internal resources? What should innovators be considering in terms of internally

Adam Rosenwach  27:22  
So we typically, and the way that we do things, we outsource this entire, this entire piece of the business. That's because, listen, mainly we focus on physiology and early clinical trials at at Deerfield Catalyst. And that's that's our expertise. And we don't try to pretend we're experts in this for a later stage company, that's a different story. I'd be curious what you see here.

Tim Sheflin  27:48  
 Yeah, again, I think it goes about how you're communicating what your plan is very early on. You know, you may have enough expertise. If somebody's had past experience doing it, you may bring in a consultant who's done it in the area. You may have a lot of faith in one of your KOLs at, you know, such and such university who's done it in this area before. But you know, as you're talking about what you're going to need in the future, and what you're going to need as you're leading up to FDA, you want to bring resources in house right in a lot of circumstances, and you want to have at least somebody who can vet whether or not I'm a good consultant right on some of these different types of issues, and can vet whether or not we need to bring in, you know, patient access specialists upon FDA approval, because we're going to have a hard time getting these claims paid with a category three CPT code, right? So what I see that I always like when we're doing due diligence is, you know, we'll get on the phone with the person that's doing it. I can get a beat on what they're doing, right? It may just be CEO. Sometimes, in other circumstances, they have somebody in that capacity, but they'll say we're going to bring somebody on six months prior to launch, who's going to be working on our health economic value proposition with some of the data that's coming in, or help us determine what type of data we need to buy. So we don't have to do a randomized control trial after the market, after our commercialization. And then we're going to bring on two people right at the launch to do this, you know, and then we're going to have three or four people to do claims management to make sure those early codes get paid. You know, having that plan demonstrates a certain level of sophistication of understanding, even if, as a startup, it's, you know, a half a dozen of you working very hard, trying to do many, many things. That's how I would look at it, Dustin.

Dustin Atkinson  29:46  
Yeah. Tim, you know, follow up for you is, you know, having worked on with startups and also strategics. How are strategics assessing risk in this area? 

Tim Sheflin  29:56  
 Yeah, I mean, I think they look at time towards the optimal coverage environment that's going to reflect what your forecast looks like. To a certain extent, they look at time and they look at are we really done publishing? Are we really done? Is this study going to be enough? If not, what are the base, mid and best case scenarios for us as the acquirer in terms of what we need to generate? Can we generate things with real world evidence post market? Can we do a meta analysis off of literature that already exists? Are we going to actually have to fund perspective, single arm, multi arm study, and the answer to those questions is, how well you understand payers as a customer, right? If you don't understand payers as a customer, or you're taking it at face value that your Kol say, hey, we at Johns Hopkins are going to fire this through, that's not a broad market access strategy, right? Leading academic institutions with strong contractual relationships with local payers who can fire you can push things through. Businesses are based off of more than the first 12 hospitals that adopt right? So how well you understand customers? And for them, they have a sophisticated understanding of, okay, this is going to be four or five years before we actually overturn negative coverage policies, and that's going to take x amount of evidence, and that's really the risk that they're considering that, plus the internal resources that they would have to bring in to make that happen. And data.

Dustin Atkinson  31:40  
Awesome. Thank you. Well, we have a few minutes left. We wanted to give the audience an opportunity. If anybody has any questions, there's a mic here, or it's a small room, you can shout, yes, please.

Audience Question  31:50  
I'll stand up. Question for you. We were a PMA advice, a breakthrough designation, and then we got entry into the new program, the TAP program, titled product. Do you have an opinion of its value in your you know what you're talking about very early on to this discussion, yeah.

Tim Sheflin  32:08  
I mean, I think I'm, you know, I'm heavily biased based off of what I've heard from payers over the years, right? Medicare is going to do its thing, right? Commercial plans are going to do their thing within the extent that they can, versus any sort of statutory components. Payers actually don't care about regulatory status. That's the FDA job, right? In terms of incorporations to certain programs. Great, right? They will still evaluate things the way that they always have. I did an ad board on on AI and like, you know, I understand that we're going to have that this is them. I understand we're going to have to change a little bit, but we're still going to look for the same sort of thing. We're still going to have to understand how often you know they gotta they gotta bake their premiums in at the beginning of the year. If they get it wrong. That costs them money right. So they're going to look at and say, What does this mean? Is this a rounding error on our per member per month? Is this something that could have a significant impact? If it doesn't have a significant impact, are we going to pay attention to pay attention to it until somebody forces us to pay attention to it, so I wouldn't lose sight of and T set is another example. Parallel review has been in there in the past. There are absolutely great opportunities to use those types of programs, but by and large, don't lose sight of the fact that those core questions will always be there, regardless of what any regulatory agency or what Medicare says. Did that answer your question?

Dustin Atkinson  33:52  
I think we have one minute left, so I'm going to put you on the spot for the to bring us home here with the one piece of advice, the one thing that you would advise the innovators who were trying to demonstrate market access competency, what's the key takeaway for them to leave the room with today?

Tim Sheflin  34:10  
Robin, go for it. Start narrowing the many amazing things that your technology can do right? Do it smart, you know, look into it, trust your KOLs and understand that, yes, it may be something that can help in many different settings of care, or at this stage of the treatment paradigm, or that's that stage of the treatment protocol, but start narrowing it right? Because that first viable use case is the one that is going to click on coverage or non coverage, and then you can plan for the other things as well. But you're going to have to go to the market with something that is more specific, that isn't just you. Doing everything for a PC piece, or doing everything in cardiology, start to narrow what is and regulatory consultants will obviously tell you the same thing, I think it's a really important exercise, is that you have to start looking at and saying, Okay, we're going to focus in these two to three key areas in order to start building an evidence and market access plan that can meet what people are looking to see. 

Adam Rosenwach  35:25  
I'll go a little more broad. One of my monoway investor mentors said to me, and this is paraphrasing, simple, but there are, there are a lot of things that we look for when making an investment. And let there be one thing on that list that you're uncertain of, and that's okay, but more than that is going to make it a very hard investment target. My advice would be, don't let it be this one, because there are many other things that are that are much more out of our control.

Dustin Atkinson  35:57  
Very good. Well. Thank you all so much for joining us. We hope it was insightful. We hope you learned a lot. We look forward to meeting you. Okay, thank you. 

Adam Rosenwach  36:03  
Thank you.