Real Options: Medical Devices

Developing novel medical devices is inherently complex. Medical device companies have to navigate regulatory pathways, estimate costs and revenues, demonstrate clinical safety and effectiveness and traverse through the various reimbursement and regulatory environments of different markets. The available evidence to support the decision-making process at an early stage is incomplete and highly uncertain. In the paper by Johal et al., (J. Med. Market. 2008; 8(2):101-102) the Real Option Analysis technique is presented as a tool to support the decision to finance the development of a medical device.