Innovating for the Safety Net: Sources of Funding

By Will Boenig, Lyn Denend, Ruby Majumdar, Daniel Riskin, Stefanos Zenios
2010 | Case No. OIT102
In the current healthcare environment, there is a significant need for new medical technologies that promise to expand access to important diagnostics, treatments, and specialty services by reducing costs, without sacrificing quality relative to prevailing standards of care. These technologies have high “social value” because of their potential to transform the way that care is delivered to traditionally underserved populations who lack access to health care. However, they may not necessarily generate the high financial returns that investors who typically fund the development and commercialization of new technologies expect. This note examines the funding environment for new medical technologies—specifically, it explores traditional financing mechanisms and the barriers that commercial investment criteria create for medtech innovations with high social value but relatively “low” potential returns in a reasonable investment timeframe. It then proposes alternative solutions that may help innovators secure funding for important technologies that can benefit low-resource environments.
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