Why medical product business cases tend to be too optimistic

Almost every financial model for a medical product shares a blind spot. It is not in the discount formulas or the sales projections: it is in how they treat regulatory time. And that blind spot is enough for a project that looks profitable in the spreadsheet to turn out, in practice, far less attractive, or outright unviable.

The invisible mistake: sampling the delay without connecting it to money

The more careful models already acknowledge that ANMAT or ANVISA approvals do not arrive on a fixed date: they model them as uncertain variables. The problem is that, very often, that uncertainty stays isolated. The registration timeline is sampled, but it is not connected to what waiting costs the project: the locked capital, the cash cushion that has to be sustained, the sales that do not happen in the meantime.

When the delay is sampled but not wired to cash flow, the model ends up systematically optimistic. Not out of bad faith, but by architecture: the risk is represented on one side of the model and absent on the other, exactly where profitability is decided.

Why it matters: regulatory time is cost of capital

In a medtech project, every month of regulatory delay is a month of locked investment and revenue that does not arrive. Connecting that time to the finances can change the magnitude of the result substantially and, in the most sensitive portfolio cases, even flip the sign of the decision: what looked worthwhile stops being so once regulatory risk enters the equation.

What to do: a single model that connects formula, cost, finance and market

The way out is not another spreadsheet, but integration. Instead of an “average” case, simulate thousands of scenarios and look at the full distribution: the probability the project is profitable, the worst case, and how much it would be worth to reduce uncertainty before committing capital. And let a single model connect the technical decision (which formulation, at what cost) with the financial one (what return, with what risk) and the commercial one (how the product is adopted, how competitors react, in which order to enter each market).

That integration is what separates a projection that reassures from a decision that withstands the scrutiny of an investor or a technical committee.

The framing

This approach is prospective and rests on declared assumptions, calibrated with real data as it appears. It does not promise certainty: it offers an honest way to decide when not everything is known yet, which is exactly the situation in which a launch is decided.