Medical Device Firms In Focus On Expanded R&D Scope: 5 Picks

The U.S. Medical Device industry trend in 2018 is reflective of extensive discovery and innovation in the life sciences industry over the past few years.

Per a study published by CNBC, medical device companies have gained importance in the healthcare world on improved research and development (R&D) of technology. Far-reaching innovation like gene therapy, newer drug combinations, patient monitoring with the help of big data this year will shape up the medical fraternity of the United States.

Tax Suspension to Fuel R&D

The Medical Device market has further gained momentum owing to the recent two-year suspension of the controversial 2.3% Medical Device tax. The 2.3% excise tax was implemented in 2013 as part of Obamacare on MedTech manufacturers, significantly restricting R&D activities.

According to an article published in Xtalks, the Medical Device tax was responsible for a $34-million reduction in R&D spending along with a $188-million decline in overall sales.

However, it is to be seen whether the tax will be fully eliminated or resumed after the two-year period. For now, the deferral will encourage R&D activity in this space, which bodes well for MedTech companies.

Notably, in the past month, the medical instruments industry has rallied 3.8% against the S&P 500 index’s return of 1.5%.

R&D Leads to Revolution in MedTech

The MedTech space currently offers unprecedented opportunities for growth and market share expansion. Solid investment in R&D has helped manufacturers use the benefits from big data, artificial intelligence (AI) and medical mechatronics.

The industry is also catching up with the digital-data age. Enormous size of data can be captured through technology for arriving at business insights. This helps the healthcare sector provide better care and reduce wastage. The latest trend of adopting electronic health record (EHR) services in the U.S. MedTech space has also been gaining popularity.

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Daniel Robertson 2 years ago Member's comment

Don't forget $TRXC.