The development and approval of medical device technology is a complex process that requires significant time, effort, and resources. One of the critical steps in this process is obtaining approval from a value analysis committee (VAC). A Value Analysis Committee is a group of healthcare professionals responsible for evaluating medical devices’ clinical and financial value and making recommendations to hospital administrators and purchasing committees within a hospital or IDN (Integrated Delivery Network). As healthcare decision-making becomes increasingly collaborative, Value Analysis Committees (VACs) are playing a larger role in evaluating the value of medical products and services. VACs consider factors beyond just clinical benefits, such as patient outcomes and cost reduction, to make informed decisions that benefit the healthcare organization as a whole.
Securing healthcare facility acceptance to make your product available for institutional formulary use requires more than just a desirable medical technology able to consistently and even cost-effective deliver results to patients. Medical device and biotech manufacturers must undergo a Value Analysis Committee (VAC) evaluation process at each healthcare institution and prove the value of their technology, device, biologic, or service. The bar for acceptance can be significant, as healthcare providers and executive administrators hold each purchase to specific standards, including a comparison to current and competitive offerings. In addition to improving the quality of care, facilities and care entities are pressured to reduce the overall care costs by 10%, which drives significant scrutiny of product costs.
It is no longer sufficient to direct marketing strategy only towards clinicians, even a champion physician. In addition to physicians, Value Analysis Committees include executive health administrators, supply chain, financial and nursing leadership, in addition to other members of the healthcare management team. Hospital purchasing preferences are no longer built on only clinical benefits. Decision makers consider how the product or service provides increased value by improving patient outcomes and reducing the overall cost of care. Medical device manufacturers must understand the VAC requirements and how to address them.
Navigating the healthcare Value Analysis process is crucial for medical device and biotech manufacturers seeking to secure institutional formulary use for their products. This process requires a comprehensive understanding of the metrics driving selection and the evidence presented by competitors. To be successful, emerging technologies must build a well-outlined Value Analysis Strategy to guide their efforts.
The Value Analysis Strategy will provide actionable due diligence to guide sales and marketing teams and inform clinical trial design. A deep dive into current value analysis adoption programs helps teams to strategically focus resources to develop and prepare the requisite information to facilitate their product selection for formulary inclusion.
- Research the value of your technology’s improved outcomes compared to competitive vendors as perceived by VACs
- Focus on improved outcomes that substantiate stronger price negotiations
The strategy should focus on improved outcomes that can substantiate price negotiations. This may involve developing materials specific to the technology based on the Value Analysis requirements and conducting one-on-one interviews with Key Opinion Leaders and hospital VAC members to better understand their decision-making process.
The Value Analysis Strategy should cover research into the higher priced physician preference items (PPI) in the target clinical area. This will help identify the clinical factors driving adoption and the key decision-makers evaluating the technology. From there, it is vital to research the value of the technology’s improved outcomes compared to competitive vendors, as perceived by Value Analysis Committees.
The Value Analysis Strategy should also address potential hurdles that may arise during the evaluation process. This may involve identifying and addressing concerns about clinical effectiveness, cost-effectiveness, and ease of use. By anticipating potential obstacles, manufacturers can prepare evidence to address these concerns and increase the likelihood of approval.
To be successful in this changing healthcare landscape, medical device manufacturers must adapt their marketing strategies to demonstrate the clinical and financial benefits of their products and services to a broader range of stakeholders, including executives, administrators, supply chain managers, and nursing leaders. Manufacturers can increase the probability of successful commercialization in the marketplace by investing in research and development to create innovative and effective medical devices and developing effective marketing campaigns that communicate the value of their products to VACs.
In a nutshell, a well-outlined Value Analysis Strategy can provide actionable due diligence to guide sales and marketing teams and inform clinical trial design. By understanding the VAC requirements and how to address them, manufacturers can improve their chances of securing institutional formulary use for their products.
With VACs and other stakeholders taking an increasingly collaborative and multifaceted approach to decision-making, it’s no longer enough for medical device manufacturers to focus solely on clinical benefits. Strategy Inc. helps clients stay ahead of the curve by developing comprehensive medical technology value analysis strategies that consider the full range of factors driving decision-making, including patient outcomes, competitive vendor landscape supply chain management, and total cost of care.
Strategy Inc. Value Analysis Strategy includes:
- Confirmation of the required metrics the VAC considers when evaluating innovation
- Development of VAC materials specific to your technology and based on the Value Analysis requirements
Navigate the obstacles of the healthcare Value Analysis process for your life science innovation with a well-outlined Value Analysis Strategy to anticipate potential hurdles. Using a data-driven approach and cutting-edge research and analysis tools, Strategy Inc. works closely with clients to customize medical technology value analysis strategies that meet their needs and goals. The firm leverages its extensive expertise in the healthcare industry to identify market trends, assess the competition, and develop positioning that effectively communicates the value of clients’ products to VACs, executives, administrators, supply chain managers, and nursing leaders.
Strategy Inc. is a leading management consulting firm that provides strategic guidance to clients in the dynamic and ever-evolving healthcare industry. One of the company’s core areas of expertise is developing Value Analysis strategies, which have become increasingly critical for medical device manufacturers seeking to succeed in today’s marketplace. Contact us today to learn more about how our medical technology value analysis strategy can help you navigate the obstacles of the healthcare value analysis process for your life science technology.