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Comment by tn13 | Hacker News Reader

Those ridiculous pricing policies are necessary to recover the cost of regulatory compliance which is seriously huge component of anything medical in USA.

As a side note, I know a company in India that manufactured a state of art blood test device. They tried to market it in USA and eventually gave up. Currently the company has tie up with Singapore hospitals which send blood to India for testing via flight and reports are mailed electronically automatically. There is a rig of blood testing machines in Powai-Mumbai which tests thousands of blood samples each day. This machine clearly can not be sold in USA (last time I checked was 6 years ago) because the cost of regulatory compliance is prohibitive.

If the medical device manufacturers indeed made windfall profits I would love to invest in their stock but they don't seem to be doing as well as the hatred directed towards them.

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My portfolio is about 50% medical supply and machinery manufacturers, and they're incredibly steady investments which pay strong dividends even and especially when the stock price is down. Furthermore, they're often able to make biotech plays and their guaranteed revenue means they're strong candidates for acquisition: http://www.bloomberg.com/quote/HSP:US

Do you have any sources for your claim that regulatory compliance is hurting profits beyond a one-off anecdote? Because my experience has been that it's an industry rife with windfall profits.

Also, what's the name of this Indian company, and what's the brand name for the device? If it does what you say it does, you would be pretty foolish not to invest.

"More than three-quarters of the cost to bring a medical device from concept to the U.S. market is spent clearing regulatory hurdles, according to a Stanford University report."[1]

I am not saying the companies aren't profitable. They aren't profitable the way people make them out to be.

And if there are indeed windfall profits to be made what is preventing smart-ass entrepreneurs from jumping in and making those profits ?

Tim Cook says that the Apple Watch won't become a regulated medical device, but Apple might make another product that is. Cook made the comments earlier today in an interview with The Telegraph, stating that putting the Apple Watch through Food and Drug Administration testing would slow its release cycle down too much and "hold [Apple] back from innovating."

[1] http://www.massdevice.com/study-fda-related-activities-cost-...

"And if there are indeed windfall profits to be made what is preventing smart-ass entrepreneurs from jumping in and making those profits?"

Incredibly high barriers to entry and very large established players who have already cornered the market? Following your logic, oil companies must not be very profitable since there aren't very many entrepreneurs buying their own offshore drilling platforms.

"They aren't profitable the way people make them out to be."

Who are these people? What is this way?

What concrete assertion are you refuting? How do you explain the P/E ratios of the biggest medical device companies?

If the cost of regulation is such a drag on profits and innovation, why are medical supply companies that primarily serve the US market so much more profitable in the long term than their counterparts in other countries?

Are you alleging that there's a bubble, or that they're cooking their books, or that they're not one of the most consistently profitable industries?

Wish there was something for medical manufacturing like pricepain.com - including a reduction in unecessary red tape. Sad, how it stifles innovation and actually harms more than it helps.

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