Posted on September 28th 2023

The medical device industry is highly competitive, and pricing is critical to commercial success. Customers' price reflects perceived value, so aligning pricing with the product value proposition is vital. Contracted healthcare businesses, especially medical device organizations, often structure customer pricing within contracts based on total annual or per-order volumes, length, level of commitment to buy, and several other aspects and make exceptions to policies based on several customer and business considerations.

Pricing pressures, competition, and short-term initiatives to drive volume can add to the potential erosion of pricing, thereby impacting margin. New product pricing is typically based on a cost-plus methodology, especially if the products are novel or first in class. Understanding the cost structure and its evolution is a key consideration, along with understanding competition.

Healthvalpro LLC can help medical device companies analyze the status of their overall pricing and identify strategies to improve profitability by refining existing pricing strategies. We will analyze all current offers, policies, and frameworks, such as tiered pricing, price volume offers, contracting across several stakeholders such as the hospital, IDN, and GPO, and "exception" or "custom" pricing.

With sales via e-commerce and multiple channels, maintaining price consistency becomes challenging, and with it, predicting overall gross margins. Terms and conditions add to the commercial complexity and are often essential in driving profitability. New product pricing provides an opportunity to bolster overall margin.

Healthvalpro LLC can assist medical device companies in analyzing all these aspects of comprehensive pricing and working with their sales, marketing, finance, and contracting teams to define a strategy to improve profitability, balancing commercial needs and financial expectations.

Here are some specific ways that Healthvalpro LLC can help medical device companies improve their pricing, contracting, and margins:

• Analyze current pricing and contracting practices. Healthvalpro LLC will work with your team to understand your current pricing and contracting practices, including your pricing objectives, customer segmentation, and contract terms and conditions. We will also analyze your competitive landscape and customer needs to identify opportunities for improvement.
• Develop a pricing strategy. Based on our analysis, we will develop a pricing strategy aligned with your business goals and objectives. This strategy may include recommendations for tiered pricing, volume discounts, and other pricing tactics. We will develop contracting strategies to help you achieve your desired profitability targets.
• Implement the pricing strategy. Healthvalpro LLC will work with you to implement your new pricing strategy and contracting terms. We will also provide your sales and contracting teams with ongoing support and training.
• Monitor and refine the pricing strategy. Healthvalpro LLC will help you monitor and refine your pricing strategy over time to ensure it is still aligned with your business goals and objectives. We will also help you track your results and adjust as needed.

By working with Healthvalpro LLC, medical device companies can improve their pricing, contracting, and margins, leading to increased profitability and growth.

Call to action:

If you are a medical device company interested in improving your pricing, contracting, and margins, please get in touch with Healthvalpro LLC today for a consultation. We will happily discuss your specific needs and how we can help you achieve your goals.