The sale is the smaller transaction
For a wide range of medical devices, particularly diagnostic imaging equipment, surgical instrumentation, and lab automation, the initial equipment sale represents a fraction of the revenue the device generates over its operating life. Servicing contracts, consumables, calibration, and spare parts typically account for the larger share, compounding annually for as long as the device remains in clinical use.
Despite this, aftermarket pricing in many manufacturers' commercial models is treated as a secondary function, priced reactively rather than as a designed revenue stream with its own strategy.
Why this gets underpriced
Aftermarket pricing tends to be set by service or operations functions with a cost-recovery mandate, disconnected from the commercial team that priced the original equipment sale relative to competitive alternatives. This organizational split means the aftermarket rarely gets the same rigor of value-based pricing analysis that the initial sale receives, even though switching costs for the buyer are far higher post-installation than pre-purchase.
Hospital procurement teams, once a device is installed and staff are trained on it, have limited practical incentive to switch service providers even if consumable pricing rises, a dynamic that is systematically under-monetized across the industry.
Where the value-capture opportunity sits
Manufacturers that model total lifetime value at the point of equipment pricing, rather than treating equipment and aftermarket as separate pricing exercises, can structure commercial terms (equipment discount tied to service-contract tenure, tiered consumable pricing against usage volume) that improve overall margin capture without increasing headline equipment price, which is often the more competitively scrutinized figure.
This also has implications for new-market entry: aftermarket infrastructure (local service capability, consumables supply chain) is frequently the actual barrier to entry in a new geography, more so than the equipment sale itself.
The strategic takeaway
Aftermarket pricing deserves the same analytical rigor as initial equipment pricing, not because it is a larger line item on paper, but because it is the segment of the relationship where the manufacturer has the most durable pricing power and the least competitive pressure.