An automated external defibrillator looks like a costly investment. On the low end, you can expect to pay between $900 and $1,200 for an entry-level model. On the higher end, the price of an AED can exceed $2,000.
The right question to ask is not how much does an AED cost? but rather Why do they cost so much? When you break down the advanced features, the research and development, the production costs, and the true cost of ownership, it becomes apparent that AEDs are actually quite a bargain.
AED Research & Development Costs
Research and development make up a sizable majority of spending for most medical device manufacturers, including AED manufacturers. Consider Philips, makers of the HeartStart series of AEDs. In 2017, the company spent nearly $460 million on R&D just for its personal health division. And some manufacturers have been known to spend considerably more. In 2011, Medtronic (original makers of the Physio-Control Lifepak series) spent over a billion dollars on R&D alone, and they were distinguished as having one of the highest research budgets in the world.
Why is R&D so expensive? First, it’s important to note that the research costs aren’t just for AEDs. The budget is allocated for all medical devices made by the company. Still, AEDs cost tens of millions of dollars to research because they must meet a number of essential criteria before they can be brought to market:
- They must be meticulously designed and developed according to current medical science and guaranteed not to harm a patient in an emergency—such as by administering shock when shock is not needed or by delivering too much electricity to a patient’s heart
- They must improve on previous and competing models by offering enhanced technologies like Wi-Fi integration, biphasic waveform algorithms, and ECG recording capabilities. In most cases, the manufacturer must develop and fine-tune proprietary software systems that coach users, interpret heart rhythms, measure device readiness, and perform specialized features like toggling between multiple languages.
- They must be tested to meet all federal regulatory requirements before they’re submitted for FDA premarket approval (after which they’ll undergo even more testing).
- They must be tested for aircraft safety, as the FAA requires AEDs to be available on all commercial flights.
- They must undergo trials to ensure that laypeople can easily use them in an emergency.
- They must undergo stringent drop testing, vibration testing, and water resistance testing to ensure physical durability. Many devices are submitted to the International Electrotechnical Commission to receive an official Ingress Protection (IP) rating, thereby certifying the device’s resistance level.
- Specific components, like batteries and pads, must be developed and tested individually and also in conjunction with the device. Batteries are subject to especially rigorous testing, as they are usually required to last a minimum of four years. They must offer reliable thermal protection to prevent explosion and accurate capacity monitoring to ensure device readiness.
Most importantly, medical devices like automated external defibrillators must be tested much more rigorously than other products because they require everyday people to oversee a potentially life-saving medical treatment.
These devices are equipped with high-voltage components containing 2-6 KV capacitors. If even one device is found to contribute to a patient’s death by malfunctioning or failing to function at all, the entire series is subject to recall, resulting in the potential for millions or even billions of dollars in losses for the company.
Regulatory Costs for AED Manufacturers
Because they’re medical devices, defibrillators are strictly regulated by the Food and Drug Administration. Recently, the FDA has been cracking down on unregistered defibrillators, mandating that all device manufacturers must file for premarket approval by February 3rd, 2020 or cease operations. Premarket approval is reserved for devices considered the riskiest, and AEDs fall into this category because they require often untrained laypeople to administer electrical shocks to the hearts of cardiac arrest sufferers.
Premarket approval costs medical device companies an average of $94 million. The FDA user fee alone costs nearly $235,000, and clinical trials can account for tens of millions of dollars. Although clinical trials are required for premarket approval, they aren’t merely a regulatory inconvenience. They actually benefit the AED maker by rendering them less liable in the event of a lawsuit. FDA approval means that the device maker has undergone rigorous evaluation and been deemed safe by the nation’s foremost regulator.
In addition, most manufacturers employ an entire department of regulatory specialists to navigate the labyrinth of FDA requirements and ensure that the company remains in federal compliance—as failure to do so can result in costly fines, recalls, and even the loss of FDA approval.
Cost of AED Parts
As previously noted, the individual parts can get very intricate and sophisticated. Because they serve such an important purpose, they cannot be assembled with cheap plastic and AA batteries.
The casings are made with specially molded thermoplastics like Santoprene and ABS, which are ruggedized and designed to absorb shock, withstand direct impact, and repel water.
The rigorously tested single-use batteries are specially developed to provide long-lasting thermal protection and to communicate with the device. A typical battery for an automated external defibrillator lasts from 4 to 8 years and consists of long-life lithium manganese dioxide primary cells. For this reason, the battery alone can retail from between $150 and $400—this is part of what you’re paying for when you purchase a new defibrillator.
The pads are designed with a specialized bonding agent that seeps into the pores and allows for firm adherence to the skin. This is why defibrillator pads typically expire within 18 to 30 months. In addition, they’re equipped to transfer an electrical charge and ensure that the precise level of shock is always administered. A good set of pads can add $50 to $100 to the value of your automated external defibrillator.
Finally, the software must be powerful and versatile, often comprising several gigabytes’ worth of life-saving data. It interprets heart rhythms, provides customized instructions to the user, and sometimes even provides a visual display that users can follow. Some models, like the Defibtech Lifeline, even record ECG information on a data card that can be saved or provided to medical personnel.
How MAP Pricing Impacts AED Prices
After all of the production and regulatory costs have been absorbed and the device is ready to go to market, the AED manufacturer sets the price for its distributors. It’s the classic wholesale-to-retail operation. The manufacturer decides on a fair price for its distributors, and the distributors then resell the device at a higher cost to earn a profit. In most cases, though, the distributor is limited in terms of the price point it can set.
Most AED retailers are subject to what’s known as MAP pricing. MAP stands for “minimum advertised price.” The purpose of MAP pricing is to create a level playing field and prevent massive organizations from undercutting smaller distributors. So if the manufacturer sells you X AED for $1,000 and sets the MAP at $1,200, you are required to list X AED for no less than $1,200 in any mass marketing formats—even if you can still turn a profit at $1,150.
In other words, the AED price you see advertised at the distributor’s website often isn’t even chosen by the distributor. It’s chosen by the manufacturer. Some distributors are still able to offer superior value by selling AED packages. In other words, they bundle the device with valuable accessories to offset some of the retail price and provide buyers with more bang for their buck. In addition, if customers call in, better pricing can often be offered.
The True Cost of Owning an AED Machine
It’s easy to look at the upfront cost of an automated external defibrillator and be discouraged, but if you break it down in terms of annual cost of ownership, the price is actually pretty reasonable in most cases.
One comprehensive review of AED cost-effectiveness found that the true cost of owning a defibrillator is about $200 per year. The researchers estimated this number based on the average cost of a new AED ($2,000) divided by the average expected lifespan of the device (10 years).
To ensure the lowest cost of ownership, look at the type of warranty that’s offered. Many manufacturers offer an 8 year warranty, thus guaranteeing close to a decade of dependable use before a replacement device is required. For example, the popular HeartSine 350P is available for as low as $1,295 and comes with an 8-year warranty.
So if we break down the AED cost annually, it comes to just $162.89 per year to have life-saving assistance at your fingertips. Considering that a standard Netflix account costs $156 per year, it’s a small price to pay for such an invaluable piece of equipment—especially if you live with a high-risk individual or operate a business or organization where emergencies might occur. The cost is especially impressive when you consider that the production, R&D, and FDA investments may have cost the company close to a billion dollars.
So next time you’re wondering if a new AED machine is worth the cost, consider the immense benefits and the long-term cost of ownership. The peace of mind alone is worth more than the dollar amount.