Could The Repeal of The Medical Device Tax Cure a Lagging U.S. Device Market?
ROCKVILLE, Md., July 27, 2018 /PRNewswire/ -- Healthcare market researcher Kalorama Information believes this week's vote to repeal the medical device tax in the House could have real effects on a relatively slow-growing U.S. device market, though those effects might be long-term. The United States device market revenues grow 22% slower than the global market, according to the firm's report The Global Market for Medical Devices, 8th Edition. The firm said that although the largest component of the market is in the United States, the majority of sales are non-US, and considerable future growth is occurring in other markets.
"Repeal won't immediately lead to a spike to revenues, but we do suspect some revisited R&D budgets and more interest from venture capital in medical devices," said Bruce Carlson. "That in turn could fuel investment which may lead to new products, and new innovations boost markets."
The same report said the market for medical devices was estimated at $386.1 billion in 2016. With average 3.8% growth, the market will grow to $483.8 billion in 2022. The United States is the largest medical device market with 47% of the global market and over $180 billion dollars in revenue. Growth in device sales are expected to be at 3.1% over the next five years. The use of technologically superior devices combined with a steady replacement rate to remain competitive in the industry will be significant factors for growth.
Another development that could be even more helpful for the U.S. device tax repeal – aging population with more healthcare needs and shifting many reusable devices for single-use devices due to risk mitigation strategies to reduce healthcare acquired infections.
As part of the Affordable Care Act, the medical device industry was taxed 2.3% on medical devices products sold. The healthcare market researcher said that while there are other challenges U.S. devicemakers face, such as limited reimbursement, recent increases in registration fees and FDA approval processes, the tax was an additional burden and its repeal will be welcomed by the industry.
Beyond the market dynamic, Kalorama believes medical devices also have impacts on the general healthcare economy and patient outcomes. While medical device spending has grown, as total spending has, the price of most medical devices have not risen as fast as other medical services and products. The cost of medical devices has remained constant as a share of total national health expenditures. During much of the past fifteen years, a significant driver of changed medical practice has been the development of new medical devices from stents to implantable defibrillators to artificial hips and knees to new imaging modalities to new diagnostic tests to new surgical tools.
About Kalorama Information
Kalorama Information, a division of MarketResearch.com, supplies the latest in independent medical market research in diagnostics, biotech, pharmaceuticals, medical devices and healthcare; as well as a full range of custom research services. Reports can be purchased through Kalorama's website and are also available on www.marketresearch.com and www.profound.com.
We routinely assist the media with healthcare topics. Follow us on Twitter, LinkedIn and our blog on our company website: https://www.kaloramainformation.com/.
Press Contact:
Bruce Carlson
212 807 2262
[email protected]
SOURCE Kalorama Information
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