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Health Care Reforms Target Medical Devices

Executive Summary

Welcome to 2009. If you haven't been paying attention to the health care happenings in the nation's capital this year, you should be. The President and powerful members of Congress have put themselves on the line to remake the US health care system; whistleblowers within FDA's device review office are charging management with breaking the law; federal mandates for more transparency in doctor-manufacturer relationships have become the lesser of evils for many in industry; and one of the most significant device-specific US Supreme Court decisions in recent memory has become a vulnerable target of leading Democratic lawmakers. As Steve Ubl, president and CEO of AdvaMed, recently observed, "What happens over the next 25 weeks could affect the industry over the next 25 years."

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Top Device Stories of 2009: A Year of Economic Revival and Regulatory Risk

2009 was the most difficult year the device industry faced in a long time, particularly given the boom years that preceded it. Public and private investors grew nervous and sat on the sidelines, as did most corporate acquirers. As a result, most start-ups found it difficult to raise money and VCs were frustrated by the poor returns being generated, especially compared with the previously frothy climate. The silver lining may be that there are signs that the economic environment may be improving and that corporate acquirers will continue to pay a premium for the right deal. Overhanging all of this, however, is the specter of health care reform and its impact on the device industry, whether through a device tax, comparative effectiveness or some unanticipated other result, meaning the industry is far from out of the woods.

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