Who will pay for wearables in healthcare?
11 June 2016
The hope among most drug developers and makers of wearables is that, ultimately, payers will fund wearables, either as part of a therapeutic solution or as a solution in themselves – assuming they are proven to improve outcomes and/or lower the costs of unnecessary treatment and poor adherence.
Wearable technologies are not expensive relative to the costs of many drugs and of hospital care; furthermore, their cost is likely to fall, not rise. But sponsors cannot assume that wearables costs will simply be absorbed within existing payer structures. Device developers and their pharmaceutical partners will have to bear the costs of establishing evidence and evidence standards around wearables and their enabling more cost-effective outcomes. Most pharma companies are not expecting short-term profits as they experiment with wearables and digital health technologies more broadly, but understand that ultimately these will have to be paid for.
Importantly, wearables are likely to themselves enable outcomes data collection, thus supporting results-based reimbursement deals between payers and pharma firms that could, ultimately, mean higher reimbursement for pharma companies. This could pay back their investment in the technology, and justify their supporting its costs in the early stages. Over time, as certain technologies and data types become better recognized and trusted, pharma may be able to include technology costs within its overall product pricing.
Datamonitor Healthcare’s Wearables are Transforming R&D and Care Delivery content includes a detailed look at the rapidly evolving role of wearable technology in healthcare, drivers and resistors to their wider use and selected case studies of pharma’s experiments with wearables.
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