Useful post on Pricing MedTech Innovations

This is an interesting article from Julie Meehan of Deloitte about the challenges of capturing value from MedTech innovation.

She makes the point that 4 megatrends are making it harder to capture innovation value:

1. Healthcare cost containment

2. Disruptive new market entrants

3. Accelerating market consolidation

4. Patients as value-conscious consumers

Julie goes on to propose 3 groups of adjustments to make pricing more effective:

1. Pricing structures - setting the price

2. Payment models - how to charge customers

3. Incentives - to drive growth

The embedded chart is a very useful catalog of tactics and strategies in each of these groups.

While proposing 3 specific strategies for MedTech companies (Outcomes-based pricing, portfolio pricing and solutions pricing), I would have liked to see a bit more nuance about each of these. Outcomes-based pricing is often too burdensome to implement at scale. Solutions pricing can all too quickly look more like bundle pricing, with the added costs and complexity it adds being recognized only too late, and customer’s anchoring off the component prices and expecting a discount (and not a premium): solutions really do need to add more value than the sum of their parts!

We’ll cover these topics and many more at the MedTech Pricing training to be held online and live in March. Past sessions have been a blast and very well-received by participants. Learn more and sign up here.