A “top-down” analysis is based on current technologies or products that address the medical need your technology/product is intended to address, and the market defined by their sales figures.
The bottom-up analysis starts with identification and enumeration of the specific target patient population your technology/product will address. What is the patient population and what are the trends projected over the development of your product and its lifetime on the market?
It is important in the pricing decision to consider who your customers and decision-makers will be. Each of these stakeholders may value your technology/product differently, so their roles and opinions will have to be factored into the pricing projection.
CoGS will be a key factor in development decision-making, with low-cost choices made to limit CoGS. In the medical device field, the price typically needs to be four times CoGS to generate reasonable profit.
When you have an estimate of target patient numbers, price, and CoGS, you can do some simple math to get a revenue and profit forecast.