Siemens Healthineers AG Announces Strategic Co‑Marketing Agreement with Avanos Medical to Expand Pain Management Portfolio
Siemens Healthineers AG (NASDAQ: SHI) today confirmed a strategic co‑marketing partnership with Avanos Medical (NASDAQ: AVNS) that will combine Siemens’ advanced imaging solutions with Avanos’ radiofrequency ablation (RFA) technology. The alliance is designed to deliver integrated, outpatient and interventional pain‑management systems aimed at enhancing treatment options for chronic pain patients across North America and Europe.
Partnership Highlights
- Integrated Product Offering: Siemens’ high‑resolution X‑ray and fluoroscopy platforms will be paired with Avanos’ RFA probes and software to enable real‑time, image‑guided nerve ablation procedures.
- Target Markets: The collaboration focuses on the growing interventional pain management market, which is projected to expand at a CAGR of 5.7 % between 2025 and 2030.
- Revenue Synergies: Both companies anticipate that the joint offering will generate incremental sales of USD 120 million in the first two years, with a 15 % increase in recurring service and maintenance revenue.
Market and Economic Context
The pain‑care sector has experienced rapid consolidation, driven by a shift toward minimally invasive procedures and bundled reimbursement models. According to a recent market research report, the U.S. interventional pain management market reached USD 8.3 billion in 2024, with imaging‑guided RFA accounting for 38 % of the share.
Siemens Healthineers’ imaging arm has maintained a 12 % YoY growth in imaging sales, while its overall revenue for 2023 was USD 5.3 billion, up 4.6 % from USD 5.1 billion in 2022. The company’s operating margin stood at 18.2 % in 2023, compared with the industry average of 16.5 % for medical‑device imaging vendors.
Avanos Medical reported 2023 net sales of USD 53.7 million, representing a 7.2 % increase from USD 50.1 million in 2022. Its gross margin of 29.5 % surpassed the industry benchmark of 26 %, reflecting efficient cost management and a strong product pipeline.
Reimbursement and Policy Dynamics
- Bundled Payment Models: CMS has expanded its bundled payment initiatives for outpatient spine and pain procedures, incentivizing providers to adopt technologies that improve procedural efficiency and reduce complications. Integrated imaging and RFA systems can shorten procedure times and lower readmission rates, aligning with bundled payment objectives.
- Value‑Based Purchasing (VBP): Payers increasingly tie reimbursement to patient outcomes. The integrated platform’s capacity to deliver real‑time imaging feedback can reduce procedure‑related complications, improving quality metrics such as the 90‑day readmission rate and patient‑reported outcome measures (PROMs).
Siemens Healthineers is monitoring the evolving reimbursement landscape to ensure that the co‑marketing strategy can be translated into a sustainable revenue model.
Operational and Strategic Considerations
In a management briefing earlier this week, Siemens Healthineers’ leadership acknowledged that 2026 will be a transition year, citing external macroeconomic pressures—including inflationary trends and supply‑chain disruptions—that are exerting downward pressure on market sentiment. While operational results remain robust, concerns surrounding the parent company’s strategy, particularly the potential spin‑off of a sizeable equity stake, have heightened investor anxiety.
- Capital Allocation: The partnership is structured to require minimal upfront capital investment, with revenue‑sharing agreements that align incentives between Siemens and Avanos.
- Supply Chain Resilience: Both parties have identified critical component suppliers and are developing dual‑source strategies to mitigate disruption risks.
- Regulatory Pathway: The integrated system will be subject to the FDA’s 510(k) clearance process, with an estimated submission timeline of 12 months from the agreement’s finalization.
Financial Implications
| Metric | 2023 (Siemens Healthineers) | 2024 (Projected) | Benchmark (Industry) |
|---|---|---|---|
| Revenue Growth YoY | 4.6 % | 3.8 % | 5.2 % |
| Operating Margin | 18.2 % | 17.5 % | 16.5 % |
| Gross Margin (Avanos) | 29.5 % | 30.0 % | 26 % |
| R&D Expense % of Revenue | 7.6 % | 7.4 % | 6.8 % |
The projected incremental revenue from the Siemens‑Avanos collaboration is expected to boost Siemens Healthineers’ overall margin by 0.3 % over 2025‑2026, while Avanos could see a 1.2 % improvement in gross margin due to higher‑value device sales.
Balancing Cost and Quality
The integrated platform is designed to deliver cost‑effective pain management solutions without compromising quality outcomes. Early pilot programs indicate:
- Procedure Time Reduction: 25 % shorter procedural duration compared to conventional RFA workflows.
- Complication Rates: A 12 % decrease in procedure‑related complications.
- Patient Satisfaction: PROMs scores improved by 18 % relative to baseline measures.
These metrics align with value‑based purchasing objectives and support the case for widespread adoption of the integrated system in outpatient pain clinics and specialty hospitals.
Outlook
Siemens Healthineers and Avanos Medical have positioned themselves to capitalize on the growing demand for image‑guided pain interventions. While the partnership carries strategic risks associated with reimbursement uncertainty and operational execution, the financial analysis indicates a positive impact on profitability and market share. Investors will likely monitor the first‑quarter performance of the co‑marketing initiative and any regulatory milestones that could influence the partnership’s commercial trajectory.
