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Today IBISWorld, the largest publisher of industry research in the US, released a study that shows the profitability of medical device companies may suffer as a result of the Patient Protection and Affordable Care Act of 2010. The Act places downward pressure on pricing and increases regulatory costs.
However, the overall industry should see an increase in revenues because it will increase the number of insured by a significant amount. According to IBISWorld, revenue is projected to increase by 7.4 percent in 2012 and at an average annual rate of 6.4 percent during the next five years to 2016, reaching to $82.1 billion.
In a release, IBISWorld analyst Nima Samadi said that the biggest hinderance will be the changing regulatory requirement, such as an excise tax on medical devices. The Los Angeles-based research company also expects that foreign outsourcing of R&D, manufacturing, and other operations, along with industry consolidation to shrink the industry in the US; China and Brazil will benefit.
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