What we’re seeing
We’ve been working with some remarkable Australian digital health companies lately. These are teams with genuinely impressive clinical evidence and technology that could meaningfully improve patient care. Whether developing AI-powered diagnostic tools or comprehensive digital health platforms, many of these founders find themselves in a familiar, frustrating position: promising clinical results, TGA approval in hand, but struggling to achieve the market traction they expected.
If this sounds familiar, you’re not alone. The gap between regulatory approval and commercial success is real, and it’s not just about the quality of your innovation.
Australia’s reimbursement system hasn’t caught up
Australia’s TGA has made significant strides adapting to digital health innovation. The Software as Medical Device (SaMD) framework provides clear regulatory pathways, and the TGA’s risk-based classification system has streamlined approvals for many digital health technologies. These regulatory advances have created genuine opportunities for innovation to reach the Australian market.
Australia’s reimbursement infrastructure lags behind its regulatory advancements. AI and digital health policy reform was not a clear focus of the Health Technology Assessment (HTA) Policy and Methods Review to identify policies and methods that are working effectively and those that are acting as barriers to access. Furthermore, Australian private insurers lack coordinated frameworks for assessing digital health solutions, creating further barriers to market access. Meanwhile, international HTA bodies like Canada’s Drug Agency (CAD) and the National Institute for Health and Care Excellence (NICE, United Kingdom) have established specific frameworks for evaluating and reimbursing AI-based diagnostics and therapeutics.
The result? Companies find themselves caught between regulatory approval and commercial viability; a gap that’s costing promising innovations their market potential.
What we’ve learned
Digital health sophistication doesn’t equal market value
- Impressive algorithms won’t drive adoption if they don’t address unmet clinical needs
- Many founders focus primarily on productivity gains, without accounting for the consensus on the multilayered value proposition that diagnostics and therapeutics market access frameworks require
- Clinical-effectiveness means demonstrating superior or comparable clinical benefits versus current standard of care
- High cost-effectiveness means positive gains in health outcomes relative to public health resource use
- Ensure your solution fits within existing clinical decision-making processes rather than requiring entirely new workflows requiring an update of clinical guidelines
Digital health faces unique stakeholder challenges
- Payers question the clinical utility of such technology – whether they actually shift patient management decisions and improve health outcomes
- Clinicians are concerned about workflow disruption from new digital tools
- Data governance, privacy and data security requirements are amplified for digital health solutions
- Digital literacy varies significantly across healthcare settings, directly impacting stakeholder adoption rates
- Clinical workflow integration requires involvement of front-line clinician users in design and implementation
- Interoperability with existing health systems remains a critical barrier to widespread implementation
Common digital health reimbursement mistakes
- To be unaware that an MBS listing will only cover healthcare system resource use, not software costs
- To assume software solutions follow the same MBS pathways as medical services/devices
- To avoid sourcing digital health position statements from medical colleges and patient advocacy groups
- To overlook MSAC’s specific guidelines distinguishing fixed vs. self-learning algorithms for diagnostic tools
- To exclude health economic endpoints when designing clinical trial protocols
- To price digital health tools like traditional software rather than medical technologies
- To fail to demonstrate how AI decision-making aligns with clinical accountability frameworks
Moving forward
If you’re building something that could genuinely improve patient outcomes but finding the path to market harder than expected, that’s a common experience. The Australian healthcare system is complex and navigating reimbursement requires a different skill set than developing innovative technology.
Whether you’re preparing for TGA submission, building your health economics case, or trying to understand adoption barriers, the right market access expertise can make the difference between a promising innovation and a sustainable business.
Feel free to reach out to us at Pulse Economics if you’d like to discuss your goals and a market access strategy. We’ve helped digital health clients navigate these challenges before, and we understand both the promise of your innovation and the realities of the Australian market access landscape.
Give us a ring: 02 7240 6738
Drop a quick email: contact@pulse-economics.com.au
Visit us if you’re in town: Level 1, 60 Martin Place, Sydney NSW 2000
