Pay Per Use model trends in Medical Technology Industry

Pay Per Use model trends in Medical Technology Industry: http://www.business-standard.com/article/companies/pay-per-use-the-new-model-for-med-tech-firms-in-india-116102200904_1.html

URL: http://www.business-standard.com/article/companies/pay-per-use-the-new-model-for-med-tech-firms-in-india-116102200904_1.html

Pay-per-use the new model for med-tech firms in India

Apurva Venkat | Bengaluru October 22, 2016 Last Updated at 22:24 IST

Medical technology start-ups are beginning to shift to a pay-per-use model for their diagnostic devices as they look to gain acceptance in a crowded Indian market.

These start-ups have been able to convert hospitals and clinicians into customers with the lure of not having to make a large initial investment to buy the device, but only smaller monthly payments. Several med-tech start-ups are now switching to a pay-per-use model, with TRICOG, Cyclops and BPL being among those that have seen some initial success.

While Bengaluru-based Cyclops' device that can diagnose vertigo based on eye expression costs half as much as imported devices, the company found more takers for its subscription model. Also, since the data collected through tests were now accessible to Cyclops, it is now focusing on early detection rather than diagnosis.

"For a start-up to offer a pay-per-use model, the advantage is that the access to the data remains with the company. When I have all the data, it is much easier to move from a pure diagnostics model to a preventive model, which I could have not grown into without the pay-per-use model," says Niranjan Subbarao, co-founder of Cyclops Medtech.

Clinics and small hospitals pay Cyclops a part of the machine's cost upfront after which they are billed monthly based on the number of tests that have been undertaken. The company negotiates with the hospital the percentage of earnings it will get from each customer billing.

The model also attracts customers due to the low investment and the ease with which the machine can be upgraded when a newer model is available.

"Unlike owning the machine, if an upgraded version is available, they can easily shift to that. It might require a little more deposit, but it is better than paying the whole cost," adds Subbarao.