Marketing innovation medical device prices follow the experience curve

A Brown, BJ Meenan, T Young

Research output: Contribution to journalArticle

14 Citations (Scopus)

Abstract

The ‘ experience curve ’ shows a consistent relationship between the cost (or price) of a product, and the total production volume to that point and is observable for a wide range of products, often over surprisingly long periods of time. Evidence is presented here to indicate that medical devices also follow such curves. The benefits to be gained from wider use of such curves by manufacturers and by health technology assessment organisations, particularly for reimbursement, are presented.
LanguageEnglish
Pages203-212
JournalJournal of Medical Marketing
Volume7
Issue number3
DOIs
Publication statusPublished - Jun 2007

Fingerprint

Biomedical Technology Assessment
Marketing
Organizations
Costs and Cost Analysis
Equipment and Supplies
Marketing innovation
Medical devices
Experience curve
Health technology assessment
Costs
Reimbursement
Long period

Keywords

  • experience curve
  • health technology assessment
  • price decline
  • medical devices
  • product lifecycle

Cite this

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abstract = "The ‘ experience curve ’ shows a consistent relationship between the cost (or price) of a product, and the total production volume to that point and is observable for a wide range of products, often over surprisingly long periods of time. Evidence is presented here to indicate that medical devices also follow such curves. The benefits to be gained from wider use of such curves by manufacturers and by health technology assessment organisations, particularly for reimbursement, are presented.",
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note = "Reference text: 1 NHS National Institute for Clinical Excellence ( 2004 ). Guide to the methods of technology appraisal. Available from http://www.nice.org.uk/download. aspx?o=201973 . 2 Wright , T . P . ( 1935 ) . Factors affecting the cost of airplanes . J. Aeronaut. Sci. 3 , 275 – 282 . 3 Alchian , A . ( 1963 ) . Reliability of progress curves in airframe production . Econometrica 31 (4) , 679 – 693 . 4 Henderson , B . D . ( 1974 ) . The experience curve — reviewed I . Concept 124 , 1 – 2 . 5 Henderson , B . D . ( 1974 ) . The experience curve — reviewed V . Price Stabil 149 , 1 – 3 . 6 Henderson , B . D . ( 1984 ) . The application and misapplication of the experience curve . J. Bus. Strat. 4 (3) , 3 – 9 . 7 Lieberman , M . B . ( 1984 ) . The learning curve and pricing in the chemical processing industries . Rand J. Econ. 15 (2) , 213 – 228 . 8 Zimmerman , M . B . ( 1982 ) . Learning effects and the commercialization of new energy technologies: the case of nuclear power . Bell J. Econ. 13 (2) , 297 – 310 . 9 Gelijns , A . & Rosenberg , N . ( 1994 ) . The dynamics of technological change in medicine . Health Aff. 13 (3) , 28 – 46 . 10 Bodenheimer , T . ( 2005 ) . High and rising health care costs. Part 2: technologic innovation . Ann. Intern. Med. 142 (11) , 932 – 937 . 11 Lubitz , J . ( 2005 ) . Health, technology and medical care spending . Health Affairs 24 , 81 – 86 . 12 Rettig , R . A . ( 1994 ) . Medical innovation duels cost containment . Health Affairs 13 (3) , 7 – 27 . 13 Newhouse , J . P . ( 1992 ) . Medical care costs: how much welfare loss? J. Econ. Perspect. 6 (3) , 3 – 21 . 14 Parmenter , E . M . ( 2004 ) . Health care benefi t crisis: cost drivers and strategic solutions . J. Financ. Serv. Professionals 58 (4) , 63 – 78 . 15 Neumann , P . J . , Rosen , A . B . & Weinstein , M . C . ( 2005 ) . Medicare and cost-effectiveness analysis . N. Engl. J. Med. 353 (14) , 1516 – 1522 . 16 Cohen , B . ( 2006 ) Drug eluting stents. www.Angioplasty.org. http://www.ptca.org/articles/des.html . Accessed 23rd August, 2006 . 17 Boston Scientifi c Inc. ( 2006 ) . Drug-eluting stenting , Boston Scientifi c Inc. Available at: http://www.bostonscientifi c.com/patient_ed/PEprocedureOverview.jsp?task=tskPEprocedureOverview.jsp & sectionId=3 & rel Id=1001,1016 . Accessed 23rd August, 2006 . 18 Cordis Corporation ( 2006 ) . Cypher: How does it work? , Cordis Corporation. http://www.cypherusa.com/cypher-j2ee/cypherjsp/about/how_does_it_work.jsp . Accessed 23rd August, 2006 . 19 Infl ationdata.com ( 2006 ) Historical CPI-U data from 1913 to the present Infl ationdata.com http://infl ationdata.com/Infl ation/Consumer_Price_Index/ HistoricalCPI.aspx . Accessed 21st August, 2006 . 20 Offi ce of National Statistics ( 2006 ) . Consumer Prices Index (CPI) , Offi ce of National Statistics. http://www.statistics.gov.uk/STATBASE/tsdataset.asp?vlnk=7174 & More=N & All=Y . Accessed 21st August, 2006 . 21 Buxton , A . E . ( 2003 ) . The clinical use of implantable cardioverter defi brillators: where are we now? Where should we go? Ann. Intern. Med. 138 (6) , 512 – 514 . 22 Buxton , M . , Caine , N . , Chase , D . , Connelly , D . , Grace , A . , Jackson , C . , Parkes , J . & Sharples , L . ( 2006 ) . A review of the evidence on the effects and costs of implantable cardioverter defi brillator therapy in different patient groups, and the modelling of costeffectiveness and cost-utility for these groups in a UK context , 10 (27) , 1 – 164 .",
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Marketing innovation medical device prices follow the experience curve. / Brown, A; Meenan, BJ; Young, T.

In: Journal of Medical Marketing, Vol. 7, No. 3, 06.2007, p. 203-212.

Research output: Contribution to journalArticle

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AU - Meenan, BJ

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