Marketability

HOW DOES A PHYSICIAN DETERMINE IF AN IDEA IS MARKETABLE?

Physicians are skilled at identifying clinical needs from a medical perspective, but sometimes lose sight over the need for a company to sell the product at a price that will earn a profit and sell sufficient quantity to support a business.

Certain medical conditions occur in a very small population, which makes the business case for funding development of a device unsupportable. This is one of the reasons that few companies develop pediatric medical devices. Developing medical devices has technical risk, is expensive, and requires management of a myriad of regulatory hurdles. Gaining funding from a medical device company, venture capitalist, or other source is virtually impossible without a target market that can support millions of dollars in sales. Additionally, most companies will expect to sell a product for greater than 70% of the cost of making the device. Thus, if a physician or hospital cannot justify paying an adequate price for a new device, it will not be purchased.

Although defining the market potential can be speculative, there are current best practices that can establish benchmarks. Feedback from physicians and hospitals can also be helpful in establishing the market potential.