Contract management: The missing link in medtech & diagnostics revenue systems

In medtech and diagnostics, a significant share of revenue (typically over 80%) is contracted. Yet, few industry players have developed robust frameworks and processes to manage their contracts. This gap can be attributed, in part, to an environment of continuous price erosion and low focus on refining contract terms—adjusted only in conjunction with new product launches and without price increases.

However, changing macroeconomic environment, persistent inflation, and high interest rates have highlighted the importance of contract management for generating shareholder value. Further, the need for active contract management is also driven by contracting complexity. This includes increased product complexity and configurability, growing importance of software and service sales, and proliferation of innovative models such as (reagent) rentals, pay-per-X, risk-sharing, device-as-a-service etc.

Technological advancements also create new on- and up-…