J
Joerg
rickman said:I would love to hear some sort of rational explanation of how that is
happening.
Many reasons. A major one is the new medical device tax. This will skim
2.3% off the top. From revenue. It means that start-up companies that
typically do not turn a profit for easily the first 10 years will get
burdened with it. For others that are in the disposables business and
run on 5-10% profit margins one can easily see that it will wipe out a
huge chunk of that.
Then there's rationing that'll happen. Medical is a zero sum game, we
can't run it on hot air (a.k.a. bonds) forever. We have already seen
slashing of reimbursements. This will make certain higher end products
unprofitable, and high-end is where our country excels. So while now
everyone may be entitled to a free enema or flu shot there are likely
going to be growing waiting lists when you need help with some serious
stuff. Just like there are in Canada. This means less revenue for
manufacturers.
Next, capital gains taxes. Funding a start-up is a major risk for the
investors. So if the rewards they can reap are majorly cut down by tax
increases they will, obviously, curb their risk exposure. That's what I
am seeing the most in the med venture space, a risk-averseness that I
have not encountered ever in the past. And I am in med tech since the 80's.
I could go on and on, but hopefully this suffices to explain some of the
effects that I (and a lot of others) see coming or have already
experienced. Personally I've seen things not being funded that used to
be a sure thing 10 years ago, plus whole projects got canned that had
progressed quite far. While people like me can move to other areas in
engineering because I have kept a generalist attitude all my life that
is no so for many others. My former employer is in the process of moving
production to Costa Rica. Other companies have started layoffs:
http://www.examiner.com/article/stryker-lays-1-000-people-off-blames-obamacare-s-medical-device-tax
Where will these people find work?