A Pricing Strategy for Combination Products

Originally Published MX May/June 2004

ADVERTISING, DISTRIBUTION, & SALES

Value-added drug-device combinations present sales and marketing challenges.

Mark Speers

Medtech industry R&D labs are generating extraordinary drug-device combination products that promise to greatly enhance the quality and cost-effectiveness of human healthcare. Many of these products will warrant the kind of premium prices successfully established for drug-eluting stents.

The technical, regulatory, and manufacturing obstacles that producers of combination products must overcome are well known. Less well recognized are the formidable sales and marketing challenges they will face, since many manufacturers are just beginning to market such products. Chief among these challenges are the need for a new type of salesperson and the imperative to win acceptance of value-based prices by third-party payers. While providers have been the device industry's traditional customers, the providers' customers—the payers—are effectively the primary customers for combination products.