R2G’s Global Price and Business Model Benchmarking: First results discussed at the Health.Tech Conference 2024

First data from R2G’sGlobal Digital Health Pricing and Business Model Benchmark” project are released for digital neurology, diabetes, cardiology, and mental health, and discussed at the Health.Tech Conference in Munich 5-6th June. Prices differ significantly. With 1,137 solutions in the database, the survey still invites global digital health providers to participate, enhancing industry transparency and informed decision-making.

Research2Guidance (R2G) has initiated a new project, the Global Digital Health Pricing and Business Model Benchmark, designed to equip stakeholders to enhance competitive pricing and business model transparency within the digital health industry.

Finding a competitive price and business model were also one of the main topics at Health.Tech in Munich this year. In addition to the reimbursement-based business models (such as DiGA), the solutions with licensing models and direct-to-patient sales were also presented.

To further support the discussion on the pricing and business model strategies of digital healthcare companies, Research2Guidance is publishing the first results of the global price and business model benchmarking initiative.

With data from 1,137 digital health solutions already gathered, the preliminary results presented in the whitepaper “Global Digital Health Pricing and Business Model Benchmark “ shed light on a range of factors that affect pricing and business models in diabetes, mental health, neurology, and cardiology market segments.

R2G invites all digital health solution providers around the world to participate in the survey of this ongoing project and contribute to the growing database allowing benchmarking in other therapeutic areas.

Considering factors like service offerings, revenue models, customer groups, country markets, reimbursement status, and payment durations, the initial results across the four therapeutic areas indicate that neurology solutions charge the highest prices per user, averaging $449 per quarter, compared to diabetes and mental health.

Digital mental health solutions also charge 24% more than diabetes solutions ($280). Digital cardiology, waiting for more responses in R2G’s survey, is a potential market segment that could surpass the average quarterly price of the neurology solutions market.

Mobile health app services are the core of most digital health solutions, with an average quarterly price of $235 per user. They typically include features and services like reminders, education, and symptom tracking.

When mobile health app services are bundled with additional services, such as coaching and tools for accessing healthcare providers (HCPs), the average quarterly price per user increases by 6%. Furthermore, a 47% price increase occurs when connected devices are included alongside the mobile health app and additional services.

Moreover, the predominant revenue source across the digital health markets is currently the app usage fees. They are particularly favoured in the mental health segment, where 74% of solutions rely on app usage fees, and in varying degrees in neurology, diabetes, and cardiology markets. Additionally, market segments like diabetes and cardiology tend to bundle services and include connected devices, balancing out the reliance on app usage fees, and offering a diversified revenue stream.

Customer targeting strategies are mainly similar across different segments, except one. Digital mental health, diabetes, and neurology solutions primarily target consumers and patients, followed by HCPs and healthcare facilities. In contrast, digital cardiology solutions focus more on HCPs and healthcare facilities, with a secondary emphasis on consumers and patients.

Reimbursement plays a role as another price driver. Solutions that offer reimbursement options (by statutory and/or selected health plans) command an average price of $340 per user per quarter, significantly higher than the $125 for non-reimbursed solutions. This considerable price difference underscores the value that reimbursement brings to digital health solutions, and facilitates access to more comprehensive service offerings, which in turn justifies the higher pricing.

Geographic market focus also impacts pricing. In Germany, digital health solutions are priced at an average of $348 per quarter, making it the highest among the USA ($250) and the UK ($140).

Overall, R2G’s Global Digital Health Pricing and Business Model Benchmark project already provides critical insights into the pricing and business strategies of digital health providers in the four disease areas.

With an aim to expand the database, improve data confidence levels, and share insights from more of the therapeutic areas, R2G invites digital health solution providers to join in this ongoing benchmarking project by participating in the survey. An updated benchmarking report will be shared with all the participants after consolidating their data.

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R2G has been constantly monitoring the global digital health industry since 2010. We provide strategic advice for how to build and grow a successful digital health business within all therapeutic areas, business models and regions. We are happy to talk and share our experience! For more information reach out to [email protected]