Cost Estimation

Wearable Medical Sensor Cost Estimation: What Drives Cost Per Unit and How to Quote It

A cost stack breakdown for wearable medical sensors, from BOM and scrap to sterilization lot charges and amortized biocompatibility, and how to quote it defensibly.

A disposable wearable sensor that sells for $25 to $60 typically carries a manufactured cost of $6 to $14, and the split surprises people coming from consumer electronics. Bill of materials usually runs 45 to 60 percent of unit cost, direct labor 8 to 15 percent, test and machine time 10 to 18 percent, sterilization and packaging 5 to 12 percent, and scrap plus overhead absorbs the rest. Regulatory and biocompatibility spending sits outside the unit cost until you amortize it, and that amortization is where most quotes fall apart. This guide walks the stack from BOM to landed cost and flags the five places estimates go wrong most often.

Price the BOM at the volume you will actually buy in year one, not the 100k price break. A representative continuous monitoring patch BOM at 250,000 units per year: flex circuit $0.90, analog front end IC $1.10, primary battery $0.45, adhesive laminate stack $0.55, enclosure and overmold $0.40, passives and miscellaneous $0.40, for $3.80 total. The same BOM quoted at 25,000 units runs $5.10 to $5.60, a 34 to 47 percent premium, mostly from the IC and flex. Medical grade adhesive rated for 7 day wear costs 2 to 4 times a commodity acrylic, roughly $0.35 versus $0.12 per patch at typical patch areas.

Yield loss multiplies material cost, and where the scrap occurs decides how expensive it is. A patch scrapped at lamination costs you $0.55 of laminate; the same unit scrapped at final test costs the full $3.80 BOM plus roughly $0.60 of accumulated labor and test time. At a 94 percent rolled yield, every good unit carries (1 / 0.94) times its inputs, adding about $0.28 per shipped patch on the example BOM plus labor. Use the Adhesive Patch Yield calculator to locate converting losses and the Packaging Scrap calculator for the end of line, where 2 to 4 percent of pouches and cartons commonly die to sealing and print defects that never make the yield report.

Sterilization is a step function, not a linear cost. Ethylene oxide at full pallet volumes runs $0.08 to $0.25 per unit, gamma $0.15 to $0.40, and e-beam sits between them with faster turnaround. The trap is the minimum lot charge: contract sterilizers bill $1,500 to $3,000 per cycle regardless of load, so a 5,000 unit pilot lot pays $0.30 to $0.60 each, 3 to 5 times the mature rate. Validation adds $15,000 to $50,000 per method up front. The Sterilization Option Cost calculator compares methods at your actual lot sizes, which matters because EtO also imposes 1 to 7 days of aeration inventory that gamma does not.

Biocompatibility and regulatory spend must land in the quote as amortized dollars per unit. An ISO 10993 panel for a surface contacting device worn over 24 hours, cytotoxicity, sensitization, and irritation at minimum, runs $25,000 to $80,000; add extractables and leachables and the program reaches $120,000 or more. Amortized over a 3 year forecast of 750,000 units, an $80,000 program adds $0.11 per unit; over a cautious 150,000 units it adds $0.53. The Biocompatibility Cost calculator forces that assumption into the open. Quote the amortization against committed volume, not the customer's forecast, and state the volume assumption on the quote so a shortfall triggers repricing instead of margin erosion.

Test time is machine time and it carries a burdened rate. A functional test station with fixtures, RF shielding, and a technician allocation costs $45 to $90 per hour burdened; at a 3 minute test that is $2.25 to $4.50 per unit before yield, often the largest single cost after the BOM. Size stations with the Final Functional Test Load and Bluetooth Test Capacity calculators, then price idle capacity honestly: a station utilized at 50 percent doubles its per unit charge. Label inspection is the quiet line item; the Label Verification Load calculator shows when 100 percent manual verification at 8 to 12 seconds per unit justifies a $30,000 vision system, usually near 400,000 units per year.

Build the quote bottom up: BOM at committed volume, labor from measured cycle times, machine time at burdened rates and realistic utilization, scrap at launch yield, sterilization at actual lot size, plus amortized regulatory and NRE, then margin. The five recurring failures: quoting mature yield of 96 percent when launch runs 82 to 88 percent, worth $0.40 to $0.70 per unit; omitting retest labor at 5 to 10 percent of test hours; using pallet sterilization rates for pilot lots; amortizing NRE over hoped for volume; and ignoring the 2 to 4 percent packaging loss. A defensible quote lists each assumption with a number next to it, because the assumptions are what the customer will negotiate.

Published 2026-07-02.