Challenges
Increasing life expectancy in Western industrialized countries, combined with the growing importance of healthy living, is driving strong demand for innovative medical technology and pharmaceuticals. Despite the market’s attractive size, the launch of new products remains challenging, as extensive regulation and legal requirements make market entry highly complex. This places particular pressure on sales organizations and pricing management.
Market structure
In healthcare, it is essential to distinguish between three central stakeholder groups:
- patients
- service providers
- payers
Target groups
Within these stakeholder groups, there are also a variety of specific target audiences, including:
- hospitals
- doctor’s offices
- pharmacies
- laboratories
- medical supply stores
- wholesalers
- healthcare providers
These stakeholders purchase, distribute, and use products for very different purposes.
In medical technology, we typically distinguish between two key areas:
- therapeutic medical technology (such as instruments, catheters, wheelchairs, or prostheses)
- diagnostic solutions (such as EEG, fMRI, immunodiagnostics, or sequencing)
In pharmaceuticals, the more common distinction is between prescription-only (Rx) and over-the-counter (OTC) therapeutics. Another possible segmentation is by therapeutic area: does the product address common conditions such as cough and cold or cardiovascular disease, or does it target rare diseases?
⇒ This complexity leads to a wide range of strategic questions
Who is the right contact for selling our products? Which target group finds our product most relevant? Where can the product be positioned in compliance with regulatory requirements? How can we design the optimal market entry? And who will ultimately bring the product to market?
Pricing and regulation
The German healthcare market illustrates these challenges particularly well. Its dual insurance system, with both statutory and private health insurance, creates fundamental differences in care structures as well as in willingness to pay. Private patients, for example, are often more willing to make out-of-pocket contributions for medical products.
![Drugs have different regulations internationally. Learn about your potential through Roll & Pastuch.]()
Price negotiation with health insurance companies
Price negotiation with health insurance companiesFor many products, the end-customer price is of little relevance. Instead, manufacturers must engage in lengthy and demanding price negotiations with statutory and private health insurers. The result is ongoing price pressure and the increasing use of flat-rate reimbursement models, often to the detriment of manufacturers and distributors.
Differentiation through pricing
Despite strong market growth, the sector remains relatively mature. Differentiation from competitors therefore often relies on incremental innovation, such as additional wheelchair features, as well as on pricing.
Varying regulations across countries
Because regulations vary significantly from country to country, a universal international product strategy is rarely sufficient. Not every medicine can be offered through every distribution channel. Ibuprofen, for example, is pharmacy-only in Germany, whereas in the UK it can also be purchased in drugstores.
Distribution channels and competition
One important market development is that manufacturers are increasingly bypassing distributors and wholesalers. Through direct-to-customer programs and their own healthcare service operations, they can reach patients directly and capture higher margins. In this highly competitive environment, more and more distributors are joining purchasing groups or being acquired by larger players. The result is rising market consolidation and increasing price pressure.
Competition from innovative software solutions
At the same time, new competition is emerging from data- and software-driven innovation. IT companies are becoming more deeply involved and are entering the market as new competitors. On both the diagnostic and therapeutic side, demand for digital health solutions is increasing. Examples include companion apps for psychotherapy and the electronic patient record, which supports closer coordination among specialists involved in patient care.
Health is people business
Long-standing relationships with field sales representatives, sometimes built over decades, remain highly relevant. This makes market entry for new solutions particularly difficult, because the interface is often already occupied. Additional untargeted sales activity only risks oversaturating key opinion leaders and should therefore either be avoided or planned with great care.
Solution approaches
Sustainable profit optimization can only be achieved through the combination of a clear market strategy and effective operational measures.
Strategic level
At the strategic level, medical technology and pharmaceutical companies must decide which products they want to bring into the market. In healthcare, choosing which proverbial horse to back is even more critical than in many other industries because of the market’s complexity and the challenges it presents.
Product testing and go-to-market strategy
Extensive product testing is essential and should be complemented by the right go-to-market strategy. The key question is: How should the product be positioned and presented to different target groups in order to achieve the strongest possible market position?
Channel management
Managing multiple sales channels remains a critical task. In the digital age, a capable multi-channel or omnichannel strategy is indispensable. Diversifying channels without creating internal conflict between them is a delicate balancing act. Sustainable success depends on combining established channels with new approaches such as direct-to-customer models.
Operational level
At the operational level, the professional design of pricing and commercial terms systems is especially important in medical technology. Contract management plays a particularly important role here, for example in negotiating exclusive contracts or managing accession agreements.
After successful market entry and positioning, many companies seek to accelerate growth. At that stage, the right growth and competitive strategy becomes decisive for long-term success.
Project experience
Prof. Roll & Pastuch has extensive project experience in the medical technology and pharmaceutical industries. Examples include consulting projects across a wide of pricing, strategy, and sales topics:
- development of a market entry strategy for one of the world’s top five MedTech companies
- development of pricing models for the products of a hospital equipment provider
- redesign of the pricing architecture for the services of an aesthetic surgery clinic
- market analysis to support a go/no-go decision on market entry for rare disease products of a therapeutic medical technology provider
- design of an e-learning platform for the sales organization in animal healthcare for a major pharmaceutical company
- price-band analysis for a leading pharmaceutical company in the DACH region
- introduction of anew compensation system across all hierarchy levels for a leading pharmaceutical company
- development of a value pricing concept for a new product line of a mid-sized MedTech company
Discover your pricing and sales potential in the healthcare sector
We will be happy to answer your questions and provide you with further information.
Prof. Dr. Oliver Roll
Prof. Dr. Oliver Roll is Managing Partner at Prof. Roll & Pastuch. He is one of the leading pricing experts in the DACH region and has led pricing, sales and strategy projects for numerous international companies. Furthermore Prof. Roll is a key note speaker on the topic of price management and has published numerous articles on various aspects of the pricing process. Prof. Roll holds the chair of “Price Management” at the Osnabrück University of Applied Sciences.
Kai Pastuch
Kai Pastuch is Managing Partner of Prof. Roll & Pastuch. Before joining as Managing Partner, he was Director at a leading international strategy and marketing consultancy. As a graduate in business informatics, he also manages our software company nueprice, which specializes in the pricing of spare parts with the product of the same name. Mr. Pastuch has extensive project management experience from numerous projects for large international companies and German medium-sized businesses in the areas of price management, marketing, sales and strategy. In addition to numerous publications in renowned journals and the publication of the reference books Praxishandbuch Preismanagement and Big Deal Management, he is a sought-after moderator and speaker on all aspects of sales and pricing. As a practice-oriented manager, he likes to get personally involved in our projects and contributes his broad experience in workshops and steerings.