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Headroom approach to device development : current and future directions
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Girling, Alan, Lilford, Richard, Cole, Amanda and Young, Terry (2015) Headroom approach to device development : current and future directions. International Journal of Technology Assessment in Health Care, 31 (05). pp. 331-338. doi:10.1017/S0266462315000501 ISSN 0266-4623.
An open access version can be found in:
Official URL: http://dx.doi.org/10.1017/S0266462315000501
Abstract
OBJECTIVES:
The headroom approach to medical device development relies on the estimation of a value-based price ceiling at different stages of the development cycle. Such price-ceilings delineate the commercial opportunities for new products in many healthcare systems. We apply a simple model to obtain critical business information as the product proceeds along a development pathway, and indicate some future directions for the development of the approach.
METHODS:
Health economic modelling in the supply-side development cycle for new products.
RESULTS:
The headroom can be used: initially as a 'reality check' on the viability of the device in the healthcare market; to support product development decisions using a real options approach; and to contribute to a pricing policy which respects uncertainties in the reimbursement outlook.
CONCLUSIONS:
The headroom provides a unifying thread for business decisions along the development cycle for a new product. Over the course of the cycle attitudes to uncertainty will evolve, based on the timing and manner in which new information accrues. Within this framework the developmental value of new information can justify the costs of clinical trials and other evidence-gathering activities. Headroom can function as a simple shared tool to parties in commercial negotiations around individual products or groups of products. The development of similar approaches in other contexts holds promise for more rational planning of service provision.
Item Type: | Journal Article | ||||
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Divisions: | Faculty of Science, Engineering and Medicine > Medicine > Warwick Medical School | ||||
Journal or Publication Title: | International Journal of Technology Assessment in Health Care | ||||
Publisher: | Cambridge University Press | ||||
ISSN: | 0266-4623 | ||||
Official Date: | 2015 | ||||
Dates: |
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Volume: | 31 | ||||
Number: | 05 | ||||
Page Range: | pp. 331-338 | ||||
DOI: | 10.1017/S0266462315000501 | ||||
Status: | Peer Reviewed | ||||
Publication Status: | Published | ||||
Access rights to Published version: | Open Access (Creative Commons) | ||||
Open Access Version: |
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