Commercial viability of medical devices using Headroom and return on investment calculation

Research output: Contribution to journalArticleAcademicpeer-review

8 Citations (Scopus)

Abstract

The market success of a medical product depends on its commercial viability, yet this may be hard to predict during the development process of medical devices. This paper aims to determine if applying the Headroom method combined with return on investment (ROI) analysis allows for estimation of the potential commercial viability of one therapeutic and five diagnostic devices. The devices were targeted at different disease areas. Information regarding the maximum additional health benefit that could be obtained with the new device, the estimated production price and expected sales volume was gathered from literature and expert opinions. A willingness-to-pay threshold for one additional Quality-Adjusted Life Years of €30,000 was assumed for Headroom calculation. The analysis showed that the device with the highest estimated headroom per unit was RAPAI: a computed tomography photo-acoustic instrument for imaging inter-phalangeal joints (€1,645,120), followed by CBPM: continuous blood pressure measurement device (€922,440), Home Brain Monitoring (HBM) device (€750,000), a portable point-of-care (POC-CKD) device (€36,250), and the IHP: injectable healing plasters (€22,100). The devices with the highest estimated ROI were RAPAI (€14,951,200), and POC-CKD (€14,100,000), followed by HBM (€9,450,000), CBPM (€8,624,400), and IHP (€7,050,000). Overall, RAPAI is expected to have the highest potential commercial viability and HBM and IHP the lowest. The presented combined method is feasible, useful, and informative to help assess the potential commercial viability of medical devices under development. It might be an answer to the growing need of performing value-based pricing of devices replacing currently dominating cost-plus pricing approach.
Original languageEnglish
Pages (from-to)338-346
Number of pages9
JournalTechnological forecasting and social change
Volume112
DOIs
Publication statusPublished - 14 Aug 2016

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Brain
Equipment and Supplies
Monitoring
Costs
Plaster
Blood pressure
Pressure measurement
Tomography
Sales
Acoustics
Health
Imaging techniques
Costs and Cost Analysis
Return on investment
Viability
Medical devices
Point-of-Care Systems
Quality-Adjusted Life Years
Expert Testimony
Insurance Benefits

Keywords

  • METIS-317620
  • IR-101028

Cite this

@article{328e1dba7505430fb1ccdab34c410392,
title = "Commercial viability of medical devices using Headroom and return on investment calculation",
abstract = "The market success of a medical product depends on its commercial viability, yet this may be hard to predict during the development process of medical devices. This paper aims to determine if applying the Headroom method combined with return on investment (ROI) analysis allows for estimation of the potential commercial viability of one therapeutic and five diagnostic devices. The devices were targeted at different disease areas. Information regarding the maximum additional health benefit that could be obtained with the new device, the estimated production price and expected sales volume was gathered from literature and expert opinions. A willingness-to-pay threshold for one additional Quality-Adjusted Life Years of €30,000 was assumed for Headroom calculation. The analysis showed that the device with the highest estimated headroom per unit was RAPAI: a computed tomography photo-acoustic instrument for imaging inter-phalangeal joints (€1,645,120), followed by CBPM: continuous blood pressure measurement device (€922,440), Home Brain Monitoring (HBM) device (€750,000), a portable point-of-care (POC-CKD) device (€36,250), and the IHP: injectable healing plasters (€22,100). The devices with the highest estimated ROI were RAPAI (€14,951,200), and POC-CKD (€14,100,000), followed by HBM (€9,450,000), CBPM (€8,624,400), and IHP (€7,050,000). Overall, RAPAI is expected to have the highest potential commercial viability and HBM and IHP the lowest. The presented combined method is feasible, useful, and informative to help assess the potential commercial viability of medical devices under development. It might be an answer to the growing need of performing value-based pricing of devices replacing currently dominating cost-plus pricing approach.",
keywords = "METIS-317620, IR-101028",
author = "Katarzyna Markiewicz and {van Til}, {Janine Astrid} and Steuten, {Lotte Maria Gertruda} and IJzerman, {Maarten Joost}",
year = "2016",
month = "8",
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language = "English",
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pages = "338--346",
journal = "Technological forecasting and social change",
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}

Commercial viability of medical devices using Headroom and return on investment calculation. / Markiewicz, Katarzyna; van Til, Janine Astrid; Steuten, Lotte Maria Gertruda; IJzerman, Maarten Joost.

In: Technological forecasting and social change, Vol. 112, 14.08.2016, p. 338-346.

Research output: Contribution to journalArticleAcademicpeer-review

TY - JOUR

T1 - Commercial viability of medical devices using Headroom and return on investment calculation

AU - Markiewicz, Katarzyna

AU - van Til, Janine Astrid

AU - Steuten, Lotte Maria Gertruda

AU - IJzerman, Maarten Joost

PY - 2016/8/14

Y1 - 2016/8/14

N2 - The market success of a medical product depends on its commercial viability, yet this may be hard to predict during the development process of medical devices. This paper aims to determine if applying the Headroom method combined with return on investment (ROI) analysis allows for estimation of the potential commercial viability of one therapeutic and five diagnostic devices. The devices were targeted at different disease areas. Information regarding the maximum additional health benefit that could be obtained with the new device, the estimated production price and expected sales volume was gathered from literature and expert opinions. A willingness-to-pay threshold for one additional Quality-Adjusted Life Years of €30,000 was assumed for Headroom calculation. The analysis showed that the device with the highest estimated headroom per unit was RAPAI: a computed tomography photo-acoustic instrument for imaging inter-phalangeal joints (€1,645,120), followed by CBPM: continuous blood pressure measurement device (€922,440), Home Brain Monitoring (HBM) device (€750,000), a portable point-of-care (POC-CKD) device (€36,250), and the IHP: injectable healing plasters (€22,100). The devices with the highest estimated ROI were RAPAI (€14,951,200), and POC-CKD (€14,100,000), followed by HBM (€9,450,000), CBPM (€8,624,400), and IHP (€7,050,000). Overall, RAPAI is expected to have the highest potential commercial viability and HBM and IHP the lowest. The presented combined method is feasible, useful, and informative to help assess the potential commercial viability of medical devices under development. It might be an answer to the growing need of performing value-based pricing of devices replacing currently dominating cost-plus pricing approach.

AB - The market success of a medical product depends on its commercial viability, yet this may be hard to predict during the development process of medical devices. This paper aims to determine if applying the Headroom method combined with return on investment (ROI) analysis allows for estimation of the potential commercial viability of one therapeutic and five diagnostic devices. The devices were targeted at different disease areas. Information regarding the maximum additional health benefit that could be obtained with the new device, the estimated production price and expected sales volume was gathered from literature and expert opinions. A willingness-to-pay threshold for one additional Quality-Adjusted Life Years of €30,000 was assumed for Headroom calculation. The analysis showed that the device with the highest estimated headroom per unit was RAPAI: a computed tomography photo-acoustic instrument for imaging inter-phalangeal joints (€1,645,120), followed by CBPM: continuous blood pressure measurement device (€922,440), Home Brain Monitoring (HBM) device (€750,000), a portable point-of-care (POC-CKD) device (€36,250), and the IHP: injectable healing plasters (€22,100). The devices with the highest estimated ROI were RAPAI (€14,951,200), and POC-CKD (€14,100,000), followed by HBM (€9,450,000), CBPM (€8,624,400), and IHP (€7,050,000). Overall, RAPAI is expected to have the highest potential commercial viability and HBM and IHP the lowest. The presented combined method is feasible, useful, and informative to help assess the potential commercial viability of medical devices under development. It might be an answer to the growing need of performing value-based pricing of devices replacing currently dominating cost-plus pricing approach.

KW - METIS-317620

KW - IR-101028

U2 - 10.1016/j.techfore.2016.07.041

DO - 10.1016/j.techfore.2016.07.041

M3 - Article

VL - 112

SP - 338

EP - 346

JO - Technological forecasting and social change

JF - Technological forecasting and social change

SN - 0040-1625

ER -