This is the Healthcare Marketplace Specialization.

Healthcare Marketplace Overview.

My name is Stephen Parente.

This is Module 5.3.5, Final Summary and Next Steps.

This really is concluding all the skills that really allow one to do

a market evaluation.

So we've talked about intellectual property,

we've talked about regulatory affairs, but we need to get this technology paid and

so fortunately, there are codes, otherwise known as diagnosis related

groups, that are used be Medicare to pay for impatient events.

And inside those DRGs are two of those, 306 and 307.

Cardiac congenital valvular [COUGH] disorders, excuse me,

with major complications and comorbidities.

And then the same idea here with major complications without those pieces.

Those would all be possible for reimbursement.

Also, we look at ICD codes that are already in place for Medicare.

We see that there's a set of other codes so

it makes sense for reimbursement in different technologies.

So how to price it?

This is another challenge.

The pricing in the US is going to be about $7,500.

Overseas which is OUS will be about $4,000.

So an average price point about $5,700, the expectation is that after six years,

there will be erosion from 7,500 to 6,500,

4,000 to 3,500 with an average price long run of about $5,000.

If we're doing evaluation technology, we have to look at what the discount rate is.

The more balt orders the higher discount rate is for financing.

So seed range is just friends and family,

things like that, could be as high as 80%, first stage will be 40 to 60%.

If we go for public financing, it might be a lot less than that.

We're basically going to out in a 47% rate.

Figuring that this is really first stage investment.

So the seed money has already come and gone.

And the funds will be reducing by two percent annually.

If we put this all together,

we can actually do it in sort of three different evaluations.

One is conservative, the other one is nominal, really the middle of the road,

and then a very aggressive launch in terms of what we expect market share to be.

So, for example here, five percent market share, end of the growth, one percent.

Nominal we're saying is going to be about 10% market share.

Two percent aggressive means we're going to go even faster than that.

So if we go with nominal,

what we actually find is that roughly half a billion of dollars

is the the net present value coming back from this technology can be really huge.

Granted much bigger for aggressive, but staying middle of the road for a second

here is positive, and that's a really really strong sign for technologies.

Most valuations that we do,

do not typically have this good financial portfolio.

So, more conclusions for this valuation, the IP landscape shows other firms

pursuing treatment, but there's not an obvious infringement with other patents.

They're going to need to continue to get their own IP protection to

make sure that they have the right IP generation.

They should consider outsourcing other partners,

because there's going to be major problems to get this into market quickly.

They need to get their PMA application in place.

They have a favorable reimbursement pathway,

the threat of new entrants and user adoption could be an issue, but

they could stay in the front of the industry for a while.

There's a growing population warrants further development and

clinical trials, knowing more about the population penetration and market share.

And the good news is that their net present is so

good it might be able to be leveraged for future financing to go forward.

Not always the case.

Many times, not the case when we do these types of technologies.

But at the end of the day, all these elements need to be in place alone

to understand what to do next for technology.

So in summary,

we've really checked off do we know if the positions and patients like this.

Most likely because it will be effective, we know it's feasible and defensible.

It has a good reimbursement scenario.

The markets estimates look great, the critical data looks reasonable, but

we need more human trials.

Information's a good possibility of growth.

Payback is favorable.

Could really disrupt the market.

So in the end we say investment is recommended.

And as folks go into looking at their capstone projects, they should consider

using this exact same template, thinking about a new technology or

service innovation to really know who the audience are and the landscape partners,

and see whether or not they are willing to go along with this technology.

This concludes this module on evaluating new medical technology,

and it also concludes all of the modules that go along

with the Healthcare Marketplace Overview Course.

Thank you.

5.3.5 Final Summary and Next Steps

Healthcare Marketplace

Meet the Instructors