Originally Published MX March/April 2004
EDITOR'S PAGE
Breaking the Barriers to Investment
The natural enemy of investment in any industry is unpredictability. World events and market forces that can cause sudden and unexpected turns in the marketplace are understandably nerve-racking for those whose willingness to invest depends on the predictability of obtaining a timely return.
When seeking to reassure skittish investors, executives of regulated medical technology companies suffer from a double dose of unpredictability. Medtech companies are subject not only to general market forces, but also to the policy issues and budget constraints that all too often prevent regulatory agencies from acting in a timely fashion. Such regulatory unpredictability can severely hamper the ability of medtech companies to raise funding.
Today, most medtech investors believe that reforms implemented at FDA have reduced the unpredictability associated with that agency. Instead, they say, their greatest concern is for the processes used to determine reimbursement coverage and payment rates--especially those of the Centers for Medicare and Medicaid Services.
Another area of concern--perhaps not so high on investors' lists as it ought to be--is the timely functioning of the U.S. Patent and Trademark Office (PTO), discussed in this issue by Benjamin H. Wallfisch, policy director of the Medical Device Manufacturers Association. Legislation that could prevent the PTO from becoming an obstacle to investment is now pending before Congress.
The House of Representatives has recently acted on this issue, passing H.R. 1561 by an overwhelming margin of 379 to 28. The final version of the legislation would end the practice of fee diversion, and incorporates compromise language that would protect small businesses and limit the outsourcing provisions of the bill. The focus now shifts to the Senate, where supporters hope that an identical version of the bill will soon be passed.
Medtech companies can benefit greatly from the currently expanding economy. It would be a major step in that direction if policy makers would assist in reducing the barriers that create unpredictability for investors.
Copyright ©2004 MX
