Market Updates

Value-based Pricing for Medical Devices – Business Risks and Strategies

May, 2019

Innovating technologically means complexities involved in new and better therapies and clinical outcomes which usually come at a very high premium and therefore are not available in most of the developing nations since the patient pool which can afford them is very limited.

The major risk which is associated with a value-based outcomes model is the mismatch between the cost of production and the returns. The other risk is no differentiation between innovative technologies and others. The value of healthcare is currently not associated with cost of delivering healthcare services and monitoring the adherence to post-treatment guidelines. Better outcomes for every player in the value chain is compromised due to non-adherence and lack of accountability. On top of that, longer cycles of payment than expected for the medical device as well as for technology providers keeps all sales outstanding in the market.

The major pain point however is that still there is no clarity on what the outcome would be, what is the outcome, how to measure it, who comprehends it, when it is realized, and what could be the impact in terms of financial returns for the medical devices manufacturers.

There are three key business strategies which must be implemented and executed wisely to tackle the value-based pricing matter. These strategies are explained below in brief:

3 key business strategies

– Vivek Sharma,
Manager - Healthcare Research
Infoholic Research