Why Are Medical Equipments So Expensive?

expensive medical equipments

Medical equipment is so expensive due to the high research and development costs, the costs of clinical studies, and market factors. An innovative medical device almost always has a premium price. In addition, manufacturers can set prices higher in the hope that the Centers for Medicare %26 Medicaid Services (CMS) will also set reimbursement rates higher. In the midst of a pandemic, governments are on their own to search, procure, and supply their populations with the medical equipment they need to prevent further deaths. As global overseers of their country’s systems, these governments are able to negotiate lower costs for medicines, medical devices, and hospitals.

At the same time, most new brand-name drugs were intended for conditions with relatively low prevalence and therefore contributed little to spending growth. Medical equipment is so expensive, and The Government Accountability Office (GAO) found that another important reason for the high costs of certain medical devices is the lack of transparency. Netflix’s new documentary, The Bleeding Edge, examines one of the most important healthcare costs for medical devices. For example, Medicare selected multiple winners in each product category, making it possible to select smaller suppliers rather than just selecting suppliers that were large enough to serve the entire geographical area itself.

These policymakers may find that the United States spends far more per capita on medical devices than the world’s second-largest buyer of medical devices, Japan, or the third-largest buyer, Germany (Table 5-). ECRI Institute learner concludes this session by discussing pricing practices and market practices for medical devices. As healthcare costs continue to rise rapidly in the United States, and medical procedures can cost three to ten times more here than in other first-world countries. The Bleeding Edge documents the complications and high costs of a variety of medical devices, including metal hip replacements, the Essure birth control pill, and the transvaginal network.

Drug pricing negotiations are mainly based on shifts in market share between competing drugs in a particular class of drugs. They can be combined with capital expenditures on buildings, and they can also include long-lasting medical devices. Wynn from Centers for Medicare %26 Medicaid Services shows that the durable medical device (DME) market is increasing prices by around 20 to 25 percent.


This blog does not provide medical advice. It is intended for informational purposes only. Do not use it as a substitute for professional medical advice, diagnosis, treatment or disease prevention.  Always seek the advice of your physician or another qualified healthcare provider for any questions you have regarding a medical condition.

The views and opinions expressed on this blog are solely those of the original authors and other contributors. These views and opinions do not necessarily represent those of Gabriel Nieves, LAC Healthcare Solutions, LAC.us Staff, and/or any/all contributors to this blog/site.

Gabriel Nieves

After experiencing a variety of shortages, crises, and inefficiencies in the status quo of the procurement and distribution industry, I undertook the responsibility of building an interface for large organizations to abstract away uncertainty throughout their supply chain under most conditions.

We are focused on building a framework from which our teams of professionals on the ground can provide a new generation of procurement support and professional services for supply chain critical organizations around the nation.

We understand that the marketing process of critical supplies is a matter of national security and public safety. In this, we found our passion and mission: developing technologies, supplier networks, and platforms for the organizations that need it most.