Product development: Positioning new healthcare products in the marketplace

New healthcare products often begin with a technological innovation or biological insight that aims to address a need or improve current technology in the medical arena. To successfully position healthcare products in the market, product development must proceed with market, commercial and regulatory issues in mind.

Market research and analysis on healthcare products

Good market research and an analysis of the needs and economics of your target market are imperative to define the market potential of your innovation and develop your business plan.1 Market research and analysis enables you to:

Product development and the regulatory environment for healthcare products

On top of market research, the regulatory issues related to healthcare product development cannot be overlooked. In the KPMG Pharmaceutical Outlook Survey conducted in May 2012, 60% of executives said that regulatory and legislative pressures are the most significant barrier to their company’s growth over the next year.2 In addition to being aware of all the relevant industry regulations and guidance documents, it is important to identify the regulatory status or classification of other marketed healthcare products. This will guide you in positioning your product in the marketplace. The following sources offer information relating to marketed healthcare products:

  • Websites of competitors and regulatory agencies
  • Product labels
  • Marketing literature
  • Tradeshows
  • Published literature
  • Patient groups
  • Public databases

Pricing and reimbursement affect positioning and product development

Pricing and reimbursement are other factors that greatly affect the positioning of healthcare products as well as their product development. Start planning your pricing and reimbursement strategy early in the product development process. Do not wait until after a product is approved as these issues are complex due to the different systems employed in different jurisdictions.1 When structuring pricing and reimbursement for new healthcare products, it is important to know for each country:

  • Who are the payers―is it the government, the hospital or a third party (for example, an insurance company)? Is it the consumer (for example, over-the-counter products)?
  • What are the data requirements for these payers?
  • What are the pricing and reimbursement procedures?

Reimbursement planning should typically begin before clinical development of the product. It can help to:

  • Determine if the product can deliver appropriate returns
  • Develop specific clinical data on performance and benefit, to differentiate the product for payers and hospital and clinical customers
  • Identify possible strategic business relationships for product launch
  • Assist in the pharmacoeconomic evaluation necessary to support the reimbursement procedure

Product development: Good science alone does not lead to good healthcare products

Development of healthcare products is highly regulated. It is a long and expensive undertaking. In addition to the good science in support of the quality, safety and effectiveness of the product, factors such as market research, regulatory issues, and reimbursement and pricing strategies need to be evaluated. Such an overall appraisal will provide important feedback for the product development program. It can yield important insights to steer the positioning as well as decisions related to product design, its intended use, and the clinical trial design or types of studies that need to be conducted.1 In short, good science alone does not necessarily lead to a good product. Scientific expertise needs to be leveraged within the context of market forces in order to achieve a successful and profitable product.

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The information presented in these articles is intended to outline the general processes, principles and concepts of the healthcare product development lifecycle. Since regulatory requirements are ever-changing, it is current only as of the date of publication and not intended to provide detailed instructions for product development. Every healthcare product is unique and therefore so is its associated product development lifecycle. Specific advice should be sought from a qualified healthcare or other appropriate professional.

Published: October 17, 2012


  1. Mehta, S.S. (2008). Commercializing Successful Biomedical Technologies: Basic Principles for the Development of Drugs, Diagnostics and Devices. Cambridge: Cambridge University Press.
  2. PR Newswire. (2012, June 22). Pharma Execs Continue Looking For Growth Opportunities In Spite Of Increasing Regulatory Challenges: KPMG Survey. [Press release].Retrieved July 18, 2012, from