Innovative in a price sensitive world

Close you eyes and imaging yourself in the following dream for a moment: You are attending a big meeting at the Ministry of Defense, you know, shiny shoes, sharp uniforms, lots of guys with very short hair, everybody sitting straight. The meeting has been called by the Air Force procurement department and is intended to inform defence contractors about its development program. The general gets up, silence.

"Ladies and gentlemen, thank you all for coming. As you are aware, we will need to replace our fighter jet in about 15 years. We called you in today to let you know that it is time to start the development process. Now, we don't know exactly what the threat scenario will be in 15 years and so we cannot tell you for which capailities and features we are looking." 
"And we cannot predict how many planes we will buy and at what price. This is a joint European procurement project, so please keep the needs of our allied forces in mind when designing the plane. However, I caution you that they might be looking for different products and pay differently. I would encourage you to obtain their guidance as well."

"So how about you start developing and come back in about 10 years with prototypes? We will then tell you whether they are airworthy and we can talk about prices and volumes a few years after that. We are unable to answer any further questions at this point."

Sounds absurd, yet vaguely familiar? Have you just spent 10 years and a tidy amount of money developing a product, and a now trying to navigate the competing interests of patients, providers and payers while keeping regulators, health technology assessment agencies and politicians happy? You will be in good company during the 4th EPP Life Sciences Forum on  June 4th and 5th in Montreux, where we will discuss how to remain innovative in a price sensitive world. 

Follow this link for more information on this event

Soeren Mattke is the Managing Director of RAND Health Advisory Services, the consulting practice of RAND Health and a Professor at the Pardee RAND Graduate School. His work focuses on improving chronic illness care through redesign of delivery systems, payment reform and better products and technologies. Dr. Mattke serves as adviser to several international organizations, such as the OECD, the WHO, the European Commission and the World Economic Forum. Prior to coming to RAND, Dr. Mattke worked at the OECD in Paris, in the healthcare practice of Bain & Company and at Harvard University. He trained as an internist and cardiologist at the University of Munich and received his doctorate in health policy from Harvard. He lives in Boston with his wife Katharina and their three daughters and keeps his heart healthy with walking the dog, red wine and daily aspirin.   

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