Demonstrating Value to Purchasers

www.valueconnected.com • [email protected] • Tel. +31 70 250 0078 • WTC The Hague, Prinses Margrietplantsoen 33, 2595 AM The Hague, The Netherlands

ROADMAP TO MARKET ACCESSDemonstrating value to purchasers

3rd Annual Medical Device Access Leaders ForumBerlin, Germany – 9th December, 2014

Ernesto M. NogueiraManaging Director, ValueConnected


Medical technology is the number oneinnovative industry in Europe

18 to 24 months innovation cycle

One new patent every 50 minutes

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Some facts:


A FEW YEARS AGO

TODAY

Demands have increased significantly

AVAILABLE TIME TO RESPOND TO MARKET

MARKET DEMAND FOR EVIDENCE

MARKET DEMAND FOR EVIDENCE


ANNUAL GROWTH OF MEDTECH EUROPEAN SALES

2000-2010 2010-2020 Source: BCG, 2013

While growth has decreased

10%

3%


Decisions come from two different groups:

More professional – consolidation into groups

PURCHASING1.

Higher demand for clinical and economic evidence

REIMBURSEMENT2.

PRICE


Options for establishing prices:

Immediate positive impact on revenues

Medium and long-term issues

• Pressure for further price cuts

• Weak differentiation point

• Quality of service

LOWER PRICES.01

Results may not be immediate

Medium and long-term opportunities

• Educate and develop market

• Build trust

• Unique market position

DEMONSTRATE VALUE.02

Â DOES NOT CREATE VALUE. Ã JUSTIFIES PRICE.


So what exactly is value?

01 Perception coming from the market

02 Benefits to different stakeholders

03 Comparable to alternatives

04 Measurable/quantifiable

05 Combines relevant clinical & economic aspects


Features vs Benefits

“Our new device comes in 5 different sizes that

are all easy to use”

THIS IS A FEATURE,NOT A BENEFIT.

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Value Value is the perception of market decision-makers about the clinical and economic benefits of your product.


How important is value for Purchasers?

“Value-based healthcare stood out as the top priority across all segments of respondents.”

Source: BCG 2013 survey


Every month, thousands of medical products are launched on the market, yet only a fraction will demonstrate enough value to achieve market adoption.

Our job is to make sure yours is one of them.

Welcome to ValueConnected.


Demonstrating value to purchasers

INTRODUCING AN INNOVATIVE TREATMENT.

Case Example:


One of the largest European markets had patient monitoring as the standard care pathway for a certain disease

Health Technology Assessment (HTA) agencies had givenpositive appraisal for the new technology

About 12% of patients would develop serious complications,including neoplasia, thus leading to expensive treatments

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However, local purchasers only focused on the upfront costs and did not understand the value of the innovation

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“More expensive than standard treatment”


HOW MUCH DOES IT REDUCE COMPLICATIONS?

WHAT IS THE IMPACT ON REDUCED HOSPITALIZATIONS?

HOW CAN WE JUSTIFY THE UPFRONT INVESTMENT?

WHAT IS THE EXPECTED IMPACT ON COSTS AND BUDGET?

Facing initial market barriers


Step 1:IDENTIFY DECISION MAKERS AND THEIR PROBLEMS.

CLINICAL GROUPS:Responsible for prescribing the treatment

Believed in the technology and could not justify its economic benefits!

PURCHASING DEPARTMENTS:Responsible for the final purchasing negotiation and decision

Uncertain about the budget impact from the acquisition of the technology!


WHICH EVIDENCEADDRESSES THE

PROBLEMS?

WHAT COST DATAIS NEEDED?

WHAT ARE THEEVIDENCE GAPS?

Step 2:

REVIEW EVIDENCE AND COLLECT DATA.


Step 3:

BUILD AND COMMUNICATE THE VALUE MESSAGES.

Reduced hospitalization days based on patient profilesÃ

Overall economic result and break-even analysisÃ


Prepare commercial teams to deliver value

messages.

Step 3:



And go from product supplier to business partner.

Step 3:


Partner



• Better understanding of real results as compared to the clinical evidence• Stronger arguments to request the technology

CLINICAL GROUPS.

• Detailed economic assessment of the new technology• “You are doing our jobs for us”

PURCHASING DEPARTMENTS.

Main results:

• Prepare teams to approach non-clinical decision makers• Increased sales

COMPANY.


Value justifies the price of medical technologies in the current cost-cutting environment

The ability to communicate value is as important as the skills to generate the value message

Before demonstrating value, companies must focus on the decision-makers and identify their problems

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Value-based strategies are more than only tools, they impact business models and selling approaches

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Key take-aways:


Ernesto M. NogueiraManaging Director

Office: +31 70 250 0078Mobile: +31 6 468 92 568Email: [email protected]: www.valueconnected.com

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t @ernestonogueira

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Thank You.

Business

Demonstrating Value to Purchasers