Sunday, February 05, 2012
A graphical look at how the regulatory policies of the Obama administration have hammered away at America's medical device industry, which creates jobs, is a net exporter, and adds immeasurably to the quality and length of lives of literally billions of people. And the rifle-shot excise tax aimed at the industry has not even kicked in yet!
Think of it: The Obama administration has, through both regulation and an industry-specific tax, intended as a policy preference to lower the rate of return of an industry that that supports a huge number of high paying jobs, exports billions of dollars of manufactures to other countries, and improves and lengthens the lives of countless people around the world. Why? Because it believes that capital ought to flow to some different use, such as clean energy. Seriously. This is what the White House believes. This is what lefty health policy wonks say in conversation.
It is unbelievable to the point of crazy.
I think it is not only that the present administration wants to support other industries instead but also that it wants to slow down new developments in the pharmaceutical and medical device industries as a way of reducing the cost of medical care. I think their reasoning is that doctors cannot prescribe or use what has not been invented or developed.
Cas, I'm not sure your reasoning is sound. If a person lives daily in the trenches of an issue, I would think that may add credibility, rather than detract from it, to any views on the subject. It would be akin to not believing the generals in the field of battle and discounting their input, which sadly too many administrations, inclduing this one have done.
Bureaucracy and healthcare reform also will adversely affect physicians.
As Dr. Jane Orient explains, healthcare reform "imposes huge additional compliance costs on physicians."
As a result, many physicians of this and other matters, many physicians are thinking about changing their occupation or, if they are old enough, retiring early.
I'm a med device biotech patent attorney, so it would be interesting to see a chart on how patent filings are holding up.
My guess is that they are down on a percent basis as a result of two factors.
The first is an attack by the judiciary and congress on the American patent system. The Supreme Court, which is largely a Bush era legacy, has introduced a great deal of uncertainty into the patent system with the KSR decision. And the America Invent Act, despite Obama's protestations to the contrary, does not favor the small individual inventor, but rather panders to the interest of large corporations and GATT. Finally, the US has been slow as a society to deal with the dilemas created by gene patents & stem cells, due to a combination of religious fervor (gop) and insurance questions (dems). Uncertainty in the IP system is not a good thing, since people tend to invest where they can expect more certainty of return.
The second is the generally poor investment climate for medical devices and biotech. Due to all the delays and uncertainties in the approval process, venture capital for startups has all but dried up. VC's are more interested in the next face book than traveling the difficult road of genentech. And pharma companies are now focused on marketing and government lobbying, rather than innovation.
This does not bode well for the future of the industry. I don't think it is part of a plan by the Obama people, but rather a general indifference by the federal government and the judiciary to the entrepreneurial aspects of our economy. Unfortunately, this is going to lead to ongoing industry consolidation and shifts to overseas manufacturing. And these are long term structural changes we are talking about. Once things are gone, it will be difficult to get them back.
The DC mentality is that this stuff doesn't matter, that the rest of us don't know what we are doing, and that it is annoying that they actually have to bother with getting reelected every few years. Its not that there is a plan, the problem is that there is no plan. With that kind of attitude I don't expect to see improvement anytime soon.