Increased Guarantees of Compensation for Underperforming Medical Devices

Medical Device Investing

Confronted with lagging sales figures, Reuters reports that medical device makers are beginning to increase guarantees of compensation if a product does perform as predicted. Currently, the burden of replacing medical devices typically falls to health insurers and patients, although they sometimes gain some compensation in court.

Confronted with lagging sales figures, Reuters reports that medical device makers are beginning to increase guarantees of compensation if a product does perform as predicted. Currently, the burden of replacing medical devices typically falls to health insurers and patients, although they sometimes gain some compensation in court.
As quoted in the article:

Medtronic Plc, Johnson & Johnson and St Jude Medical Inc are among the first to provide the newer guarantees, some of which offer to share in the cost of follow-up treatment tied to their heart devices, company executives told Reuters. Orthopedic implant makers are exploring such agreements for hip and knee devices.
Hospital officials, however, are seeking even more robust performance guarantees, including pledges to cover the cost of the surgery when a device needs to be replaced. Some see the new offers as a starting point for manufacturers to begin to share more of the financial risk of procedures.

Click here to read the full Reuters article.
 

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