Thursday, June 28, 2012

Device Tax Stays For Now, As a Result of SCOTUS Decision on Healthcare Reform

NEW YORK, NY--(Marketwire - Jun 28, 2012) - While supporters and opponents of President Obama's healthcare reform legislation let out boos or cheers for the recent decision of the United States Supreme Court, one industry will not be pleased, according to Kalorama Information. The healthcare market research publisher says that the medical device industry will face additional costs because of a tax provision in the act that is set to begin in January of next year. This will likely be of concern to the $322 billion world medical device industry, according to Kalorama Information. 
The Patient Protection and Affordable Care law included new tax provisions intended to help fund healthcare reform, which require device manufacturers to pay a 2.3% excise tax on "taxable medical device" sales beginning January 1, 2013. The tax applies to medical device products intended for human use, but exempts eyeglasses, contact lenses, and hearing aids, as well as devices that are "generally purchased by the general public for retail or individual use." Some companies have warned investors of the taxes they expect to pay in 2013 as a result of the tax:

·         Johnson and Johnson, the largest device company, estimated that it will pay between $200-$250 million under the new law
·         Teleflex stated it would face $15 million in charges
·         Becton Dickinson said that 80% of its US revenues would be subject to taxes
Source: company 2011 annual reports

"These fees are not large compared to total revenues of the companies, but the burden of the fees is a concern for an industry that has been recovering from the recession," said Bruce Carlson, Publisher of Kalorama Information. "It will affect costs and profits, may affect R&D spending and may encourage cost-saving options such as outsourcing more production."

Kalorama notes that the Medical Device Manufacturers Association (MDMA) and other groups have fought to reduce the target size of the tax, as well as the rate. The group is currently working to repeal or change the provision in the Healthcare Reform bill. The repeal of the tax, popular in the medical device industry, has thus far been unsuccessful.

Kalorama Information's report, The Global Market for Medical Devices, 3rd Edition, includes profiles of companies in the industry, market sizing, forecasts and regional breakouts of the world device market, products in development and much more information. 

Healthcare Reform: Winners and Losers

The recent decision of the United States Supreme Court upholding the 2010 Patient Protection and Affordable Care Act, known generally as the healthcare reform bill leaves intact the mechanisms of concern to the industry and the provisions that some in the industry will look forward to in business planning.   These include an expanding patient base with potential for new customers, tax credits for a few select industries and taxes on pharmaceutical and medical device industry.     

Therefore Kalorama Information’s 2010 analysis of this law- including the likely impact on various healthcare stakeholders - will apply and may be of use to some healthcare customers today.  A lot of the industry has been ‘putting off’ consideration of the provisions pending the Court decision, so this may be a timely reminder of the provisions of the bill and expected industry impact from analyst Alison Sahoo.    There is no charge for the White Paper, though registration including a valid credit card number is required for our website. 

Wednesday, June 27, 2012

“Speed-Healing” Products Drive Wound Care Market

An array of new strategies is enhancing the healing time of wounds and boosting revenues at device makers, according to Kalorama Information.  Driven by innovative products that heal wounds faster and increased wound occurrence, the worldwide wound care market reached revenues of $16.1 million in 2011, per our just released report on wound care products and devices. 

 Several of the products within the worldwide wound care market are mature such as anti-infectives and pressure relief devices, while others such as biological dressings and negative pressure wound therapy are in the infant stages of development.  Conventional, mature products continue to generate the majority of sales; however, their growth rate is slow whereas the new biological products are growing faster and operate with less competitive activity.  Speed-healing products such as growth factors and protease modulating wound dressings are among the type of products showing stronger revenue growth as they demonstrate good results.

Kalorama Information’s recently published report World Wound Care Markets (Skin Ulcer, Burns, Surgical/Trauma) contains more information on this title including products, competitors in the market, revenue estimates for segment markets and regional breakouts for United States, Europe, Asia and other regions.  The report can be purchased at: