One of the biggest challenges facing medical device companies is pricing. The cost of developing and manufacturing medical devices can be significant, and there is often pressure to keep prices low to remain competitive, even though innovation and new features are expected. This can be difficult given the need to recoup costs and generate profits. The days of simply manufacturing and selling a device to healthcare providers via distributors have long vanished.

While there’s no single solution to pricing challenges, medical device manufacturers need to foster a mentality geared towards shaping demand based on delivering a value proposition "beyond the device."  One pricing model that stands out for the medical device industry is value and outcome-based pricing and contracts. This model can stand alone but typically involves contracts.

Despite extensive research and countless conversations, adopting a value-based model in medical devices remains limited even as the pricing model gains traction in the broader life sciences industry. The shift from volume cost to value is a reality today, and the winners will be the manufacturers who are ready to drink the Kool-Aid.