Maximizing Margins in a Turbulent Medical Device Market

Jun 24, 2026

40 min watch

Maximizing Margins in a Turbulent Medical Device Market

Inflation, contract complexity, and siloed systems make gross to net one of the hardest problems in MedTech, and the pressure keeps growing. In this session, Conga and ZS Associates broke down exactly where MedTech gross to net (GTN) breaks and what leading teams are doing to close the gap before it hits the books.

Here Are the Key Takeaways:

Gross-to-net is the most impactful margin lever you control.

Gross-to-net (GTN) is the difference between a medical device company’s list prices and what it actually collects after rebates and contract-based deductions are settled. In many industries that gap is manageable. For medical device companies, it's a full-time problem. Group purchasing organization (GPO) agreements sit on top of distributor contracts, each carrying their own rebate logic and settlement timelines. The math changes every time a customer misses a committed volume or an escalator clause goes inactivated.

And unlike cost of goods, which moves with tariffs and suppliers, GTN is your contracts, your rules, your data. It's the lever you can move this quarter without a supplier negotiation or a headcount conversation.

The margin pressure is structural, not cyclical.

Since, 2020, compounding shocks have left manufacturers with no recovery window between them. Tariffs, supply chain disruption, reimbursement pressure, and geopolitical volatility. Teams waiting for things to normalize are going to be waiting a long time.

The MedTech GTN process is complex

The commercial model is unusually complex, with hospital systems, group purchasing organizations, and integrated delivery networks (IDNs) all sitting between the manufacturer and the patient. Each relationship carries its own contract terms and rebate structures, managed across disconnected systems that were never designed to talk to each other.

The gap shows up in margin leakage and forecast inaccuracy, and it creates real audit exposure. Most teams already know something is off, and pinpointing where it's coming from is where the real work starts.

Disconnected systems are the root cause.

Group purchasing organization (GPO) contracts, rebate schedules, enterprise resource planning (ERP) data, and settlement systems all tell a different version of the same deal. By the time data reaches finance, it's already wrong. Missed accruals, revenue misstatements, and retroactive rebate errors follow predictably.

2026 is a renegotiation year, and that makes GTN harder.

Every agreement being rewritten now needs tariff clauses, volume flex provisions, and cost-sharing mechanisms. Companies that can't model the GTN impact of new contract structures in real time will sign deals they can't accurately account for.

Recovered margins create innovation budgets

Getting GTN right frees up margin to fund digital platforms, clinical evidence, or portfolio expansion without asking for new budget. That's offense, not damage control.

Watch the on-demand webinar to learn more, or reach out to us to schedule a demo today.

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Frequently Asked Questions

What is gross-to-net in medical device?

Gross-to-net is the difference between a medical device company's gross revenue and what it actually collects after accounting for rebates, chargebacks, admin fees, volume discounts, and other contract-based deductions. Getting it right requires accurate data across GPO agreements, distributor contracts, and settlement systems, all of which typically live in separate places.
Why is gross-to-net harder for MedTech than other industries?

Medical device contracts are unusually complex. GPO and integrated delivery network (IDN) agreements involve tiered pricing, volume commitments, and admin fees that change by customer and by quarter. Distributor layers obscure who bought what at what price. Rebate calculations and tiered discounts depend on volume attainment that customers don't always hit.
What happens when gross-to-net goes wrong?

The consequences range from inaccurate accruals and forecast misses to revenue restatements and audit findings. Strained customer relationships are common too, particularly when rebate disputes arise from calculation errors neither side caught in time.
What's the difference between on-invoice and off-invoice leakage?

On-invoice errors happen at the point of sale: non-optimized prices, weak approval chains, promotional terms that persist past expiration. Off-invoice errors come after the sale: rebate accrual miscalculations, chargeback errors, admin fee disputes. Both erode net revenue. Off-invoice errors are typically harder to catch because they're estimated post-sale, often manually.
Where do most teams start when fixing this?

Most start with visibility. Before you can fix the leakage, you need to know where it's coming from. That means getting pricing, contracting, and finance data onto a shared source of truth so you can see the full picture from contract terms to net realized revenue.