Which Go-to-Market Channels Should a Medical Device Startup Prioritize in 2027?

By Kory White · Updated Nov 2026 · 16 min read

A hospital imaging room with a ceiling-mounted C-arm X-ray system, a patient table and a wall of monitors, photographed in the 1980s

Direct answer

Prioritize in this order: first the channels that clear your regulatory and payment gates, then the sales model that fits your deal size. For most early device companies that means a small direct team (or a tightly managed set of independent reps) in a few launch accounts, a payment pathway worked in parallel from the start, and distributors or a strategic partner added only where the market is far away, the call point is narrow or a partner brings access you cannot build.

Three gates come before any channel choice. The FDA pathway (510(k), De Novo or PMA) decides the date you may sell. The payment pathway (a billing code, Medicare coverage and a hospital or office that can get paid) decides whether a buyer can say yes. The compliance design (Open Payments reporting and the Anti-Kickback Statute) decides how you may pay reps, distributors and group purchasing organizations.

No source I found publishes a benchmark for startup channel mix, distributor commission rates or the cost of a direct team, so I give none. The sections below use FDA, CMS and federal-code pages read in November 2026, plus two public companies' own investor pages, and mark my own judgment as judgment. This is a planning guide, not legal, regulatory or reimbursement advice.

What public data exists, and what does not

Nothing I read publishes a benchmark for how early device companies split sales across direct reps, distributors and partners, what distributors are paid, or how long a hospital value analysis review takes. Treat any such number from a vendor blog as unverified unless it names its method and date.

What is published is the rulebook: the FDA premarket pages, CMS coding, coverage and disclosure pages, and the federal anti-kickback statute and safe harbors. That is enough to tell you which channels are open to you and what each one asks of you. It is not enough to tell you which will win, so the framework later on is judgment and I label it that way.

For selling metrics once you are live (placements, procedures per system, capital versus recurring revenue), see our separate page on sales KPIs for commercial medical device sales. This page is about the earlier question of which door to knock on first.

Gate 1: the FDA pathway sets the date any channel can start

No channel can sell until FDA has said the device may be marketed. On the 510(k) page (content current as of August 22, 2024), FDA says a submitter may not proceed to market until it receives an order finding the device substantially equivalent, and that this determination is usually made within 90 days. The same page says a 510(k) is required at least 90 days before offering a device for sale.

If there is no legally marketed predicate, the De Novo page (content current as of September 30, 2025) describes the route for novel devices that can be classified into class I or II. FDA recommends a Pre-Submission first, requires eSTAR for De Novo requests starting October 1, 2025, and cites a goal under MDUFA IV of a decision in 150 review days, which excludes days the request is on hold for more information. A declined request leaves the device in class III with no right to market it. The 150-day figure is a review-day goal, so it is not the calendar time to launch.

For class III devices, the PMA page (content current as of May 16, 2019) says the applicant must receive approval before marketing and that FDA charges a fee for review. The page is older than the others I read, so check FDA's current pages and fee notices before you plan a budget.

Why this matters for channels (judgment): a cleared device with a predicate can start building accounts and a payment file almost at once, while a De Novo or PMA device has a long runway in which the best use of money is clinical and payment preparation, not a large field team. Hire sales capacity to match the date you may sell, not the date you hope to.

Gate 2: reimbursement decides whether a buyer can say yes

FDA authorization is not the same as payment. The CMS HCPCS Level II page (last modified October 2, 2026) says HCPCS Level II codes cover services, supplies and equipment that the Level I CPT codes do not identify, that anyone may submit a request to modify the code set, and that a code does not of itself determine coverage or payment. CMS says it decides code additions independently of coverage and payment decisions. I did not read the AMA's process for CPT codes, so I make no claim about it.

Timing matters. For non-drug items the page lists a biannual cycle: an application deadline in January takes effect in October, and one in July takes effect in April of the following year. CMS says it typically does not review applications off cycle. If your device needs a new HCPCS code, a missed deadline can add months to your launch plan. The page also describes C codes, which are used to report devices under the Hospital Outpatient Prospective Payment System.

For some breakthrough technologies, CMS has a coverage route. Its TCET fact sheet (August 7, 2024) says the pathway applies to certain FDA-designated Breakthrough Devices, that CMS expects to accept up to five candidates per year, and that its goal is a national coverage determination within six months after FDA authorization. It also says manufacturers may send a letter of intent roughly 18 to 24 months before expected FDA authorization and a nomination about 12 months before an FDA decision, with candidates accepted quarterly. I read the 2024 notice, so check CMS for later changes. The page also says most diagnostic tests that get Breakthrough status are expected to keep going through the Medicare Administrative Contractors instead.

A real-world sign of how much this can drive a channel plan: Inspire Medical Systems' press release dated August 3, 2026 says its revenue decreased 7.6% to $200.6 million in the quarter, and that the U.S. decline was driven primarily by the impacts of the evolving coding and reimbursement environment. I make no comment on the technology. The point for a startup is that a payment change can move a direct-sales business more than any field tactic.

My judgment: a channel is only as good as the buyer's ability to be paid. If coding or coverage is unsettled, prefer a lean channel you can pause or scale, and hold back from long, exclusive distributor commitments until the payment route is clear.

Direct team, independent reps and distributors, or a strategic partner

There are three basic structures. A direct team means your own employees sell and support. An independent rep or distributor model means a separate business sells, and the details differ (a distributor may buy and resell; a rep may represent you for a commission). A strategic partner or OEM model means a larger company sells your product under its own channel or brand, or supplies it into theirs.

The public companies I could read show the mix is a live decision, not a one-time choice. Medistim's August 21, 2026 results release says the second quarter of 2026 was its first quarter of direct sales to end customers in Japan, after it set up a direct sales operation there in March 2026. Inspire's August 3, 2026 release lists, among its risks, its ability to expand, manage and maintain its direct sales and marketing organization and to market and sell outside the United States. Each shows a company building or defending a direct presence, which says nothing about whether that is right for a company with no revenue yet.

I tried several other device companies' investor pages (Inspire's own site, Pulmonx, Profound Medical, Establishment Labs, TransMedics, ICU Medical and others) and sec.gov. They returned access errors to a plain automated request, so I did not read them and quote only the two companies above. Their channel mix descriptions are therefore not covered here.

Here is how I would compare them, as judgment rather than data. Direct selling gives you control of the message, training and customer data, and it costs fixed salary and time before revenue. Independent reps and distributors convert some fixed cost into variable cost and can add local relationships, but you give up some control and you take on the compliance design in the sections below. A strategic partner can add reach and credibility, but you may give up margin and the customer relationship, and the contract terms (exclusivity, minimums, termination) carry the real risk. No source I read quantifies any of these trade-offs.

Choose direct when the sale needs heavy clinical education or case support, the first accounts are few and concentrated, and you need to learn from every early user.
Choose independent reps or distributors when the call point is broad or distant, the product is simple to support, and you can supervise them under a written agreement that fits the compliance rules below.
Choose a strategic partner when a larger company already holds the access you need and you can keep ownership of the data, the brand terms and a path to take the channel back.

Hospital purchasing: GPOs, IDNs and value analysis committees

A group purchasing organization (GPO) negotiates contracts for member hospitals. The federal safe harbor at 42 CFR 1001.952(j) (eCFR current text, read November 8, 2026) defines a GPO as an entity authorized to act as a purchasing agent for a group of providers that is not wholly owned by the GPO. It says vendor payments to a GPO are not treated as remuneration if the GPO has a written agreement with each member that either states vendors will pay a fee of 3 percent or less of the purchase price or specifies the amount, and, for provider members, if the GPO discloses the amounts received from each vendor in writing at least annually.

CMS also treats GPOs as reporting entities in Open Payments, discussed below. For a startup, the practical read (judgment) is that a GPO contract is a distribution channel in its own right. It can open many hospitals with one agreement, but a GPO agreement does not by itself make a hospital buy your device. Do not assume it will, and do not offer anything of value to a GPO outside a written agreement your counsel has reviewed.

An integrated delivery network (IDN) is a health system with multiple hospitals and sites. I found no federal page that defines the term, so my use is the common industry one. A value analysis committee (VAC) is the internal group a hospital or system uses to review new products. I found no federal or other official source that sets its process, membership or timeline, so I give no timeline and none should be assumed.

Judgment on how to use that: ask your first clinical champion who sits on the committee, what evidence and cost information it asks for, how often it meets, and whether a GPO contract changes anything for that system. Write down the answers per account. They are your best evidence of how a channel will really behave.

Compliance that shapes channel design: Open Payments

The Sunshine Act program is run by CMS as Open Payments (page last modified June 30, 2026). It publishes payments that reporting entities, including device companies, make to covered recipients such as physicians. The Program Year 2025 data covers 17.07 million published records totaling $14.67 billion in payments and other transfers of value, so plan on payments and transfers of value to clinicians being reportable and public (I did not read the reporting thresholds or exclusions).

The CMS glossary (last modified March 16, 2026) defines applicable manufacturers as entities that produce, prepare, propagate, compound or convert a covered device, and says the definition does not include distributors or wholesalers that do not hold title to the product. Covered recipients are physicians, physician assistants, nurse practitioners, clinical nurse specialists, certified registered nurse anesthetists, certified nurse-midwives and teaching hospitals, with the exception of bona fide employees of the reporting manufacturer. Reporting entities are applicable manufacturers and applicable GPOs.

The annual cycle, per CMS: collect data January 1 to December 31, submit February 1 to March 31, a pre-publication review and dispute window April 1 to May 15 (45 days), and publication on or by June 30.

What it means for channel design (judgment): who holds title to the product may affect who is the reporting entity, and you still need to track consulting fees, meals, travel, speaker fees and research payments that you or your channel make to clinicians. I did not read CMS rules on payments made through third parties, so ask counsel how your specific structure is treated before you sign a distribution agreement.

Compliance that shapes channel design: Anti-Kickback basics

This is a plain-language summary of public text for planning. It is not legal advice. Have a healthcare attorney review every sales-compensation, distributor, GPO and consulting arrangement before you sign. The HHS-OIG fraud and abuse page returned an access error and I did not read it, so I rely on the statute and the regulation text.

The Anti-Kickback Statute, 42 U.S.C. 1320a-7b(b) (U.S. Code, 2023 edition, read on govinfo.gov), makes it a felony to knowingly and willfully offer, pay, solicit or receive any remuneration, including a kickback, bribe or rebate, in return for referring or for purchasing, ordering or recommending an item payable in whole or in part by a federal health care program. The listed penalty is a fine of up to $100,000, up to 10 years in prison, or both, for each such offense.

The regulations at 42 CFR 1001.952 list payment practices that are not treated as criminal. Two matter for commissions. Section (i) covers amounts an employer pays a bona fide employee. Section (d) covers payments from a principal to an agent, and the text includes these conditions: a written, signed agreement; services specified; a term of at least 1 year; compensation set in advance at fair market value in arm's-length transactions; and compensation not determined in a way that takes into account the volume or value of federal-program business generated between the parties. An agent is any person other than a bona fide employee.

What I will not say: whether a particular commission formula for a distributor or independent rep fits that safe harbor. Percentage-of-sales pay is common in the industry, and whether it fits is a question for counsel. The safe harbor is also not the only way to be lawful, and falling outside it does not by itself mean a violation. I did not read OIG advisory opinions or guidance on this point.

Practical design (judgment): decide who is an employee and who is an agent, put every external relationship in a signed agreement, document fair-market-value reasoning, train all channels on what they may and may not give to clinicians, and keep a record of payments you will need for Open Payments.

International distributors

Outside the United States, distributors are the usual way to start because they bring local registration knowledge and relationships. The Medistim example above shows the reverse move too, a company establishing a direct operation in Japan in 2026. Neither disclosure tells you what share of any company's sales came through distributors, so I give no share.

FDA's exporting page (content current as of January 30, 2026) says foreign customers or governments often ask for proof of a device's U.S. regulatory or marketing status. CDRH issues four export certificate types, including the Certificate to Foreign Government, issued electronically since January 2, 2024, at a fee of $175.00 for the first certificate and $85.00 for each subsequent one from the same request. Your distributor will probably need one of these for a registration filing.

What I did not verify: any other country's registration rules, distributor margin norms or the legal terms that govern termination in a given country. Treat the contract (territory, exclusivity, minimum purchases, ownership of registrations, termination and transfer rights) as the main risk control, and ask a local adviser to review it.

A decision framework (judgment, not data)

Score each candidate channel against the same few questions. I use yes, partly or no and do not add the answers into a single number, because the questions are not equal. A single no on a gate question usually settles it.

Authorization gate. Can this channel legally sell my device today, given the FDA pathway and date? If not, hold it.
Payment gate. Does a billing code, coverage route and a payer or budget exist for the buyer this channel reaches?
Buyer fit. Does the channel reach the person who decides, whether a physician office, a hospital value analysis committee or a system contract?
Support load. Can this channel give the training and case support the product needs without my team in the room?
Learning value. Will I see the real objections, the price pushback and the usage data, or will the channel hide them?
Compliance fit. Can I put this channel in a signed agreement, document fair market value and track any payments that Open Payments reports?
Reversibility. Can I change or exit the channel, and keep the accounts, data and registrations, if it does not work?

Once you are selling, track results with the measures on our medical device sales KPIs page so the channel decision is revisited with data, not opinion.

A step-by-step plan

Step 1. Pin down the FDA pathway and date. Confirm whether you need a 510(k), De Novo or PMA, and consider a Pre-Submission. Write the earliest date you may sell, and plan hires around it.
Step 2. Map the payment route. Find out whether an existing code covers your device, whether you need a new HCPCS code, and the cycle deadline. If you may qualify as a Breakthrough Device, read the TCET notice and its timing.
Step 3. Pick the call point. Decide whether your first buyers are physician offices, outpatient facilities or hospitals, and learn how each buys, including any value analysis committee and GPO contract.
Step 4. Run a small direct pilot. Use a few accounts to learn the sale, training and objections. Record what the buyer needed to say yes.
Step 5. Build the compliance basics before the first external hire. Agree a policy for paying reps, distributors, consultants and speakers, and set up Open Payments tracking. Have counsel review the templates.
Step 6. Add distributors or a partner where the pilot shows a gap. Use a written agreement with territory, minimums, data sharing and a way to take the channel back. Start with a defined territory and a short term.
Step 7. Open international markets one at a time. Get the FDA export certificate your distributor needs, check local registration with an adviser and decide who owns the registration.
Step 8. Review the mix every quarter. Compare channels on cost, learning and payment results, and change the mix based on evidence. Re-check FDA and CMS pages each time, since rules and cycles change.

Questions people ask

Should a medical device startup start with a direct sales force or distributors?

No public source I read says which is better. A reasonable starting point (my judgment) is a small direct team in a few launch accounts, so you learn the sale and the payment route, then add distributors or a partner where a clear gap appears. Match hiring to the date FDA lets you market the device.

Does FDA clearance mean hospitals and Medicare will pay for the device?

No. FDA pages describe marketing authorization. CMS says a HCPCS code does not of itself determine coverage or payment, so coding, coverage and payment are separate workstreams to run alongside the FDA pathway.

What is TCET?

Transitional Coverage for Emerging Technologies is a CMS pathway for certain FDA-designated Breakthrough Devices. In its August 7, 2024 fact sheet, CMS said it expected to accept up to five candidates per year and aimed to finalize a national coverage determination within six months after FDA authorization. Check CMS for any later change.

Do Open Payments rules apply to distributors?

CMS defines applicable manufacturers as entities that produce, prepare or convert a covered device and says the definition does not include distributors or wholesalers that do not hold title to the product. Who reports in your structure is a question for counsel, and a manufacturer still needs to track its own payments to clinicians.

Can I pay distributors or reps a commission?

Commissions are common, but the Anti-Kickback Statute reaches payments made to induce purchases of items paid for by federal programs. The regulation at 42 CFR 1001.952(d) lists conditions for payments to agents, including a written agreement and compensation not set by the volume or value of federal-program business. Whether your formula fits is a question for a healthcare attorney.

What is the GPO safe harbor?

Under 42 CFR 1001.952(j), vendor payments to a GPO are not treated as remuneration if the GPO has a written agreement with each member that states a fee of 3 percent or less of the purchase price or specifies the amount, and discloses amounts received from each vendor to provider members in writing at least annually. This is a summary of the text, not legal advice.

How long does a hospital value analysis review take?

Not published in any source I read. Ask each target hospital how its committee works, what it asks for and how often it meets.

How much should a startup budget for a direct sales team or a distributor commission?

No public source I read gives a reliable figure, so none is stated. Build the budget from your own price, expected cases and the compensation your counsel approves.

Sources

FDA: Premarket Notification 510(k) (content current as of August 22, 2024) · Substantial equivalence order before marketing; 90-day determination
FDA: De Novo Classification Request (content current as of September 30, 2025) · No-predicate pathway, eSTAR, 150 review-day MDUFA IV goal, declined requests
FDA: Premarket Approval (PMA) (content current as of May 16, 2019) · Class III approval before marketing; review fee
CMS: Final notice fact sheet, Transitional Coverage for Emerging Technologies (August 7, 2024) · TCET eligibility, up to five candidates per year, six-month NCD goal, nomination timing
CMS: HCPCS Level II coding process (page last modified October 2, 2026) · Who may request codes, cycle deadlines, code does not decide coverage
CMS: Open Payments (page last modified June 30, 2026) · Program Year 2025 data and the annual reporting calendar
CMS: Open Payments glossary (page last modified March 16, 2026) · Applicable manufacturers, covered recipients, reporting entities
U.S. Code, 42 U.S.C. 1320a-7b(b), 2023 edition (govinfo.gov) · Anti-Kickback Statute text and penalties
eCFR: 42 CFR 1001.952 (current text, read November 8, 2026) · Safe harbors for agents (d), employees (i) and GPOs (j)
FDA: Exporting Medical Devices (content current as of January 30, 2026) · Export certificates and fees
Inspire Medical Systems: second quarter 2026 results press release (August 3, 2026) · Revenue change attributed to coding and reimbursement; direct sales organization risk statement
Medistim ASA: results for the second quarter and first half of 2026 (posted August 21, 2026) · Direct sales operation established in Japan in March 2026
Hero photo: Carol M. Highsmith, Hospital medical equipment, 1980s, Library of Congress (no known restrictions on publication; cropped) · Hospital imaging room

Figures and dates were read from the linked official pages on November 8, 2026. HHS-OIG pages, sec.gov and several company investor sites returned access errors and were not read, and I found no public benchmark for channel mix, distributor commissions, direct-team cost or value analysis committee timelines, so none is stated. This is a planning guide, not legal, regulatory, reimbursement or financial advice.