With rapid advancements in technology and conflicting political forces on regulation, the medical device industry is an exciting one to watch. Here are some of our insights and analysis moving forward in 2015.
1. Congress is Likely to Repeal the Medical Device Tax
A repeal is looking more and more likely for the ObamaCare tax on devices sold by for-profit companies in the U.S., which remained the largest medical device market in the world last year with a market size of around $110 billion.
The 2.3% tax was initially met with disapproval from some Democratic leaders such as Elizabeth Warren and John Kerry, who worried about hampering one of the biggest national industries. Now, with a Republican-controlled Congress, a repeal of this part of Obamacare is on many politicians’ agendas.
If the legislation is overturned, it would spare medical device companies an estimated 20 billion dollars of taxes to be paid in the next 10 years, a big “win” for any medical device manufacturers in the US.
2. 3D Printing will Catalyze Innovation in the Medical Device Supply Chain
Thanks to rapid advancement in technology, 3D printing has proven itself to be a viable tool in the medical device industry.
Surgeons in China successfully implanted an artificial 3D-printed vertebra into a 12-year-old bone cancer patient to help him walk again in August, and in a few years, scientists should be able to print a functional liver.
As awe-inspiring as these innovations are, they’re far from mass market. Medical device suppliers small and large should focus on using 3D printing as an incredibly useful tool for prototyping at rapid fire speed rather than an alternative to more conventional mass production processes.
“3D printing is used for rapid prototyping, not necessarily for the product itself. you can conceptualize it and create it the next day.” said Daniel Price, a biomedical engineering consultant. “But, as it currently stands, the material that comes out of a 3D printer isn’t up to the specifications to match the fairly rigorous FDA requirements, thats why it’s been limited in clinical use in the United States.”
3. The Mobile and Wearable Market
From stickers that monitor your heart rate to blood tests that only require a simple prick, compact innovations in consumer health are capturing consumer and investor attention.
Health wearables were the highlight of CES earlier this month, with fitness-tracking glasses and dog collars. And of course, there’s the much-anticipated Apple Watch and the already popular wearable devices.
“Never before have we been able to have a device is so tiny and so little power that could stay charged for long periods of time” said Price.
With the FDA’s recent news that they won’t regulate medical devices used for “general wellness”, we’re likely to see more innovations in this space. Both on the patient and care provider side, there seems to be a warm reception to the industry. 500 million smartphone users already have health-related apps, and this number will only increase. Close to 42% of physicians are comfortable relying on at-home test results to prescribe medication.
Kim Krueger, an analyst for Health 2.0, a research firm and major organizer of health conferences, closely follows the growing consumer device market. The key to success she says, is being able to reliably measure useful clinical metrics and incorporating providers into workflow to effectively analyze large sets of data.
“Providers have a tough relationship with technology, so passing along a continuous stream of data is not really everyone’s cup of tea. There are ways to make it more ‘bearable’ so to speak — checking in on trends and using devices for early detection.” said Krueger.