From Price to Value: How Procurement Practices Reshape Competition in Medical Device Markets

Abstract

Procurement affects both the prices paid for medical devices and the conditions under which suppliers compete. Broader value-based assessment may reward clinical performance and life-cycle savings but may also raise bidding costs and favor incumbents. This conceptual study examines that tension through a focused, non-systematic review of economic theory, peer-reviewed studies, and public procurement documents. It develops four conditional propositions on aggregation, verifiable quality, contractual governance, and evidence-related entry barriers. The framework separates static purchasing efficiency from dynamic market contestability, including supplier entry, switching, and innovation. Evidence from U.S. group purchasing, Canadian tenders, Dutch purchaser interviews, UK experiments, and European procurement frameworks is compared according to the claims each design can support. Available evidence identifies specific expenditure and decision-process effects but does not establish a universal causal impact of value-based procurement on long-run competition. The paper argues for independently verifiable criteria, proportionate evidence requirements, workable contract exit, and continuing opportunities for qualified suppliers. Price-based awards may remain suitable where products are genuinely comparable and downstream differences are small.