The US market for medical devices has faced numerous obstacles and changes over the last several years. While some are easily resolved, many challenges facing our industry continue to linger. A recent article on Becker’s Orthopedic and Spine’s website featured an article which focuses on the pressing challenges currently facing the medical device industry.
The dreaded 2.3% Medical Device Tax:
As the article points out, “Many companies are threatening layoffs or closing facilities, saying the tax will increase their costs and the cost to the patient. For instance, orthopedic device manufacturer Stryker announced in November of 2011 it would layoff 5 percent of its workforce by the end of 2012 to provide efficiencies and realign resources in advance of the new Medical Device Excise Tax scheduled to begin in 2013.” Currently industry lobbyists are actively protesting the tax law in hopes of an appeal.
FDA 510(k) Clearance Process:
The 510(k) process has long been a source of tension to those in the industry. However, it isn’t the just the confusion and unclear processes surrounding the 510(k) process, it’s also the money. In fact, the article elaborates that while “changes have been made to the FDA's 510(k) clearance process for medical devices, among which the process' fees will be 17 percent higher for companies seeking premarket approval. The FDA has also broadened the definition of who needs to apply for regulatory control and approval so more people have to register and go through the process.”
The Rising Costs in Operational Expenses:
The challenge will always remain, how can a company bring a safe, effective product to market as cost-effectively as possible? Well, it appears those margins are becoming even slimmer. The article plainly states, “Some professionals believe there are now so many costs to operating a device company that unless you have a product that will bring a large payoff, it may not be the time to break into the industry.” Will this mean a rise in the number of clinical trials going over seas?
With great challenge comes great opportunity- right? Well, it’s clear the medical device industry faces numerous obstacles. But, it’s important to remember on the other side of that winding pathway to approval is a patient who is waiting for that device.
Markets are forever changing; sometimes change is for the better, and other times it’s a difference of opinions. We’d like to hear yours. How do you think the medical device industry will overcome the current challenges it faces? Share your thoughts below.
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