How to keep your customers for the long-term

“How should suppliers work with their customers to ensure they can continue to afford their products and services in the long term?”

That was the question posed to me last week by a group of healthcare procurement experts. We were sparring back and forth over topics to include in the agenda for HBI 2026 next March.

The theme is ‘Creating Value in Changing Times’, and against the current backdrop of spiralling costs, slashed budgets and reduced tariffs, one of the biggest value creation levers for businesses, investors and governments alike is the ability to negotiate better prices.

The discussion that followed this question was surprising, exciting, and full of hope. I don’t often dive into procurement — something I’d previously thought of as simply perfunctory and mundane. I now realise I was wrong.

Innovation in healthcare is seen as a boon to so many challenges. Leveraging robotics and automation to free up time for staff, increase diagnostics accuracy, perform more complex surgeries, get people back on their feet faster. A central challenge for innovation is funding it in a sector with relatively low margins. 

When everyone is squeezed, you risk parts of what is a relatively finely balanced ecosystem starting to crumble. Take the news this week that the UK’s NRS Healthcare owned by private equity firm, Graphite Capital and a major supplier of mobility equipment to the NHS is set to run out of cash by the end of the week. Breakages in the supply chain can wreak havoc in any business, but in healthcare (at the risk of sounding a touch dramatic) it could be a matter of life or death. 

So, should businesses consider cutting their prices for the greater good? Should, for example, higher-margin pharmaceutical businesses drop their prices to help out their customers? The market and industry reaction to what I might describe as a commendable order from President Trump to reduce drug prices for Americans is a clear ‘no’. 

Read more here.

So what could investors, CFOs and CEOs do to negotiate better rates? 

Rather than demanding price cuts, companies can engage high-margin suppliers around long-term contacts and volume commitments. By rationalising your supply chain to focus on fewer suppliers companies could see significant price drops. 

Such relationships could also include value-based contracts, where payments are tied to health outcomes rather than just volume. There is very little price transparency between countries in Europe. In some cases, neighbouring countries pay several times more than their counterparts across the border for the same products from the same suppliers.

We learned from a case study delivered by Vivalto Santé and XMED iQ that banding together through group purchasing organisations or procurement consortiums can create bargaining power.

When it comes to digital health, the power balance is often flipped. Start-up or scale-up digital companies need customers to continue developing their products, and can be receptive to relationships that create win-wins at favourable prices.

The reality is that procurement innovation is needed to keep healthcare innovation moving and reduce the risk of price pressure creating big holes in healthcare delivery. Pharma, medtech, devices and digital businesses all need to ask themselves: if they want their customers to keep being customers for the long term, what are they doing now to make that possible?