Everyone Loves the Product. Nobody Wants to Pay for It.

Why demonstrating value is only half the battle in medical device pricing strategy.

Imagine developing a medical device that clinicians genuinely love. It improves patient outcomes, saves staff time and reduces the overall cost of treatment. Your clinical research is positive, and your health economic model demonstrates compelling savings. Everything suggests the product should command a premium.

Then you speak to the people responsible for purchasing it.

They recognise the benefits. They may even agree that the technology represents better value. But when it comes to paying more, the enthusiasm disappears.

Why?

Because in MedTech, demonstrating value and convincing someone to pay for it are two very different challenges.

Understanding this disconnect and the people who influence purchasing decisions is critical to developing an effective medical device pricing strategy.

The Value-to-Price Gap: Why Better Doesn't Always Mean More Expensive

MedTech manufacturers often build their value propositions around improved clinical outcomes, greater efficiency and lower treatment costs. But the value a technology creates doesn't always translate into the price a healthcare organisation is willing to pay.

Consider a wound care dressing that reduces the number of dressing changes required. Fewer changes could mean less nursing time, lower consumable usage and improved patient comfort.

But what does this mean to a procurement manager?

Are the staff-time savings measurable? Will they translate into actual reductions in expenditure, or simply free up nursing capacity? Is there sufficient evidence to justify a higher acquisition price?

A product can be cost-effective without being perceived as affordable.

This is the value-to-price gap: the difference between the value a technology creates and the value that can realistically be translated into an acceptable purchase price.

Closing that gap requires understanding how commercial decision-makers evaluate the benefits being claimed.

The People Who Recognise the Value Aren't Always the People Who Pay for It

One of the complexities of MedTech purchasing is that there is rarely a single decision-maker.

A clinician may champion a device because it improves patient care. A department manager may value its workflow benefits. A procurement manager may focus on acquisition costs and supplier contracts, while a finance director considers budgets and competing priorities.

Each stakeholder sees the same technology through a different lens.

Purchasing structures also vary. In the US, Value Analysis Committees, supply chain executives and Group Purchasing Organizations may all influence decisions. In the UK, NHS procurement teams and departmental budget holders have different responsibilities. In Germany and France, hospital purchasing groups and centralised procurement organisations can introduce additional layers of decision-making.

The challenge isn't simply identifying these stakeholders. It's understanding what decisions they influence, what they know and what matters to them.

For medical device pricing research, job titles alone are insufficient. The right respondents are those with genuine knowledge of, or influence over, product evaluation, pricing negotiations, budget allocation and purchasing approval.

From Perceived Value to Willingness to Pay

How can MedTech manufacturers bridge the gap between clinical enthusiasm and commercial reality?

Established pricing research techniques, including Gabor-Granger and conjoint analysis, can quantify price sensitivity and willingness to pay. But these findings become more actionable when supported by an understanding of the commercial context.

For example, if a procurement manager is unwilling to accept a 15% price premium, understanding why is just as important as establishing that threshold.

Are the benefits insufficient? Are the economic savings difficult to validate? Is the budget fixed? Do existing contracts restrict flexibility?

Each explanation has different implications for pricing and market access.

This is why effective commercial decision-maker research should explore what drives willingness to pay, what constrains it and what could change it.

Importantly, research must reflect each respondent's responsibilities. Procurement managers can provide insights into pricing benchmarks and contracts, finance directors into budget flexibility, and value analysis stakeholders into the evidence required to justify a premium.

Bringing these perspectives together provides a more realistic picture of commercial pricing potential.

Turning Value into Pricing Power

For MedTech manufacturers, the challenge isn't simply demonstrating that a technology is better. It's understanding whether its benefits are sufficiently compelling, credible and commercially relevant to justify the proposed price.

This means identifying the right commercial stakeholders from the outset and designing research around how purchasing decisions are actually made.

The result is research that does more than identify an acceptable price. It reveals which benefits genuinely influence purchasing decisions, what evidence supports a premium and where commercial barriers may exist.

Ultimately, the most important question in medical device pricing strategy isn't simply "How much is our product worth?" It's "What would make a customer willing and able to pay for that value?"

And answering that question starts with talking to the right people.

How IDR Medical Can Help

At IDR Medical, we specialise in qualitative and quantitative market research to support medical device pricing strategy and commercial decision-making.

We help manufacturers engage the right clinical and commercial decision-makers, understand purchasing pathways and evaluate willingness to pay across international markets.

Planning a MedTech pricing study? Contact IDR Medical to discuss how we can help turn your product's value into commercial success.