Manufacturers need to employ new methods and tools to maximise the effectiveness of their efforts in bringing new devices to market.

Unlike traditional models where care is considered to be the treatment a patient receives at the time he or she sees a healthcare provider, value-based healthcare (VBHC) models consider care to be a long-term affair that stretches from the first doctor visit to months, or even years after the treatment was first delivered. This encourages providers to consider the long-term outcomes and costs of a treatment or medical device.

To achieve success in a VBHC market, device manufacturers will need to work with providers to control costs, while demonstrating value in terms of improved patient outcomes through new types of evidence. Aligning the many definitions of value that each stakeholder holds is the biggest challenge in the transition to value-based healthcare. Patients and physicians might put the highest value on individual clinical efficacy and convenience. On the other hand, payers and governments may not consider these as important as cost and population health impact.

The key to success is to ensure the many definitions of value align across stakeholders, especially with payers, who have the most sway in decisions. It is important to determine what benefits accrue to whom and over what time frame, and then to focus on those benefits when establishing a target market or during price negotiations.

Regardless of what cost-reducing method is chosen, payers will continue to hold providers accountable for delivering better patient outcomes at a lower overall price. This could cause device manufacturers to consistently and aggressively lower the price of their products to remain a viable and attractive option for providers. To counteract the potential decline in margins, device manufacturers need to incorporate steps to address value earlier in the product lifecycle.

Partnering with a CRO that has a proven track record in clinical evidence generation, economic modeling, and commercialisation expertise can help throughout the stakeholder value mapping process and ensuring a new medical device can have a good market impact.

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This blog is an edited version of “How value-based healthcare affects medical device development” which appeared in Medical Product Outsourcing on 17th December 2018. To view the full article, please visit