Medtronic (NYSE:MDT) is likely charging $3,000 more for the Revo SureScan MR Conditional pacemaker than previous pacemakers, according to an analyst who attended the Heart Rhythm Society meeting in San Francisco this week.
If that’s true, it might not be so good for the Fridley, Minn.-based medical device monolith. Physicians at the conference believe Medtronic may be erring in pricing the device so high, even though it leads the market in this device category, wrote Morgan Stanley analyst David Lewis in a note to investors Monday.
In February, Medtronic’s Revo became the first MRI-safe FDA-approved implantable pacemaker to hit the U.S. market. The company has high hopes for the device.
“We believe this product will help to draw share and alleviate pricing pressure [on pacemakers]. So, I’m fairly bullish that this is going to be a real big opportunity for us,” CEO Bill Hawkins said in a Feb. 22 earnings call.
Although most clinicians at the HRS meeting consider Revo the most important product launch for the company, enthusiasm for the product was not consistent, at least according to Lewis — some docs felt it was nice to have, but not essential.
“Medtronic’s pricing strategy may be dampening enthusiasm for the product,” he wrote.”
Company executives seemed to be happy with how Revo is performing, although they would not confirm that sales were meeting internal projections. Lewis came away from the HRS meeting with the impression that Medtronic has no plans to alter Revo’s pricing strategy.
Medtronic is slated to release its first-quarter results for fiscal 2012 at the end of May.
