How medical device and pharmaceutical companies use commission to drive sales of equipment, drugs, and healthcare solutions.
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The medical industry combines high values, complex sales processes, and strict regulation. With US medical device and pharmaceutical revenue exceeding $700 billion annually, the industry is a significant employer of commission-compensated salespeople. From pharmaceutical reps to medtech specialists, compensation models vary.
This page explains how commission structures work in the medical industry, which roles earn variable pay, and how effective commission administration can ensure compliance and motivation.
The medical industry uses several types of variable compensation:
| Product Type | Typical Commission |
|---|---|
| Capital equipment (MRI, CT, etc.) | 1-5% of sale value |
| Implants and devices | 3-10% of sale value |
| Consumables | 2-8% of sale value |
| Service contracts | 5-15% of contract value |
Pharmaceutical sales has traditionally been less commission-driven and more bonus-based. Typically 70-80% fixed pay and 20-30% variable based on territory sales goals. Direct commission is less common due to regulation.
Mix of capital equipment margin (low) and reagent sales (higher ongoing commission at 2-5% of consumable sales).
Territory Managers (Medtech): Primary sales role with OTE of $100,000-175,000. Top performers in high-value segments can reach $250,000-400,000. Typical 60/40 to 50/50 split.
Pharmaceutical Sales Reps: Call on physicians and hospitals. OTE of $80,000-120,000 with 20-30% variable. Bonus based on territory market share and sales growth.
Key Account Managers: Handle large hospital systems and group purchasing organizations. OTE of $120,000-200,000 with 30-40% variable based on contracts and agreements.
Clinical Specialists: Technical experts supporting sales and training users. OTE of $80,000-130,000 with 10-25% variable, often tied to customer training and adoption.
The medical industry is heavily regulated:
These rules affect how sales goals are set and commission is calculated. Focus is often on market share and activity rather than pure sales transactions.
Quarterly milestones: Bonus for reaching sales targets each quarter. Typically 20-40% of annual bonus.
Product launches: Accelerators on new products. Example: 1.5x commission in launch year.
Quality metrics: Bonus based on customer satisfaction, training activity, and compliance. Often 10-20% of total bonus.
The medical industry has unique complexities:
OTE varies by segment. Consumables: $90,000-125,000. Implants: $120,000-200,000. Capital equipment: $140,000-250,000 or more for top performers.
Yes, but it's regulated. Direct commission per prescription is prohibited. Territory-based bonus is allowed as long as it doesn't encourage unethical behavior.
Typically monthly or quarterly. Capital equipment is often paid at delivery or installation, not at order.
Tenders are often attributed to team or region rather than individual. Commission may be based on activity in the tender process or distributed by territory.