Archive for October, 2012

What Medical Device Embedded Developers and Vendors Need to Know About Obamacare

Medical device companies and embedded vendors that sell to this market segment are facing, depending on the outcome of the 2012 presidential election, a huge downturn in this market segment. Unless Romney is elected president and the Republicans get control of the senate, the provision of the Obamacare (Affordable Care Act) tax on medical device manufactures will have significant repercussions. It is ulikely that this tax will be overturned if the current makeup of congress and the white house remains in 2013.

Especially hard hit could be the hundreds of small companies developing medical software applications. Many of these apps can significantly impact and enhance the practice of medicine. The IRS is deciding now whether to treat apps as medical devices subject to the tax – somehow I don’t find comfort in the potential outcome.

As a result of the looming device tax, many medical manufacturer companies are moving production overseas, good jobs are going to Europe and Asia, and many cutting-edge medical devices will now be produced elsewhere for import into the U.S. It would be irresponsible for CEOs to wait until after the election and the seating of the new congress to not take appropriate actions to protect their company.

Therefore the impact of the Obamacare tax may cause irreparable disruptions. Embedded vendors will need to re-strategize their sales efforts and offerings to the medical device segment. Vendors will need to show:

  • That the use of their tools, operating systems, processors, etc. will result in a lower development cost (data based)
  • That these will result in products being shipped earlier meeting targeted windows of opportunity (again supported by data)
  • That such tools, OSes, etc., will be reusable for future designs and developments

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