"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-...