Medical Device Pricing Research and Strategy

Determining the Optimal Price for Your Medical Device Pricing

Pricing research in medical devices involves analyzing various factors to determine the ideal price for a product. This process includes understanding the value drivers of the device, assessing its value against competitors, and evaluating market demand and price sensitivity. Key methodologies used in pricing research include:

• Gabor Granger method, which measures willingness to pay at different price points
• Van Westendorp Price Sensitivity Meter, which identifies acceptable price ranges
• Conjoint analysis helps in understanding how different product attributes influence pricing decision
• Value-based pricing to understand overall value perception and cost impact

If you set your price too low, you gain market share but not profitably. It also becomes difficult to raise prices later. If you set your price too high, your market penetration may be very slow and you run the risk of having to slash prices later. The goal is to balance profitability with market penetration by setting a price that reflects the device’s value while being competitive and accessible to your target customers. This research is crucial for ensuring that the pricing strategy aligns with market expectations and maximizes revenue potential.

How to Approach Pricing Research

Conducting price sensitivity research for a medical device involves several critical steps. NAMSA will guide you through the most critical pricing questions and will help you set up an optimal price strategy. Here is how we would approach your project.

1. Start by defining your objectives. Knowing whether you’re looking to understand the price range customers are willing to pay or identifying the price that maximizes revenue is crucial.
2. Choose appropriate research methodologies, such as the Van Westendorp Price Sensitivity Meter, Gabor-Granger Technique, or Conjoint Analysis. These methods help in gathering data on price sensitivity.
3. Identify your target audience, which might include healthcare providers, administrators, payers, or patients. The sample size should be appropriate and representative of each group.
4. Consider pilot interviews to test your assumptions and gather qualitative feedback on value perception, price sensitivity, business models, and stakeholder influences.
5. Develop a survey with questions about price points, perceived value, and purchase intent, blending qualitative and quantitative inquiries for a comprehensive view.
6. Administer the surveys using online platforms, phone interviews, or in-person focus groups. Each product or service is different and NAMSA will advise you on the appropriate methodology.
7. Once the data has been collected, analyze it to identify patterns and insights, focusing on the price points where demand is highest and where customers perceive the best value.
8. Validate these findings by cross-checking with other market data and stakeholder feedback to ensure accuracy.
9. Consider conducting pilot tests to validate this price in real-world settings before and after product launch. Continuously monitor market responses and be prepared to make necessary adjustments. Ongoing feedback collection is vital for refining your pricing strategy over time.

By following these steps, we can help you effectively conduct price sensitivity research, ensuring your medical device’s price meets market expectations and achieves commercial success.

Recent Pricing Research Projects

Here are some projects that have recently been completed by our market research team. This is just a small sample of the work we do.

• Price sensitivity and optimization for an innovative robotic surgery platform
• Pricing strategy and tiered pricing design for a novel service program
• Price sensitivity and cannibalization research for a next-generation pacemaker device
• Value-based pricing research to understand value perception and cost compilation for a new EMR device
• Total Cost of Ownership pricing research for an imaging capital equipment
• Return Of Investment pricing research for a next-generation capital equipment