Medical product innovation getting tougher, Moody's says

Advances in medical products could slow down considerably in the future as obstacles to innovation mount, according to a new report by Moody's Investors Service. Moody's analysts argue that government regulations and reform efforts may impede the devicemakers' efforts to launch new products.

One of the major obstacles they see to product launches by devicemakers is a tougher FDA, which already has instituted stricter post-market rules for monitoring the safety of medical devices. In addition, they note, the FDA may tighten up its process for 510(k) clearance process, which allows manufacturers to get a device to market more quickly by avoiding human testing.

Moody's also worries that reforms such as widespread use of comparative effectiveness data could raise the cost of developing products and lower product margins.

Given these obstacles, the agency is predicting that smaller medical devicemakers may be more likely to acquire other firms with existing products than launch new R&D efforts. This could speed up the pace of R&D in the industry overall, Moody's says.

To learn more about this trend:
- read this press release

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