Survey: Healthcare reform will have a negative impact on the medical devices industry

Comprehensive healthcare reform will give a big lift to healthcare information technology and generic drugs, but it will hurt the medical device industry, according to a survey by Wachovia Capital Markets LLC.

The report, “The Changing Face of Heathcare,” was compiled from data of a survey of more than 200 institutional investors, more than half in the northeastern United States.

About 71 percent of respondents thought Congress would pass some sort of healthcare reform in 2009, but less than 25 percent thought a single-payer system, similar to Canada’s or Great Britain’s, was likely.

As for its impact on business, more than 76 percent of the investors said healthcare reform would have a modest to negative impact on the medical device industry. Orthopedics, cardiovascular and medical equipment budgets might face the biggest challenge, according to investors, while diagnostics would likely fare better.

And comparative effectiveness research will likely have a deflationary effect on pricing, they indicated. More than 80 percent said the new emphasis on evidence-based medicine would have a slight to substantially negative effect on medical technology pricing. Most of the respondents said pricing pressure from hospitals would be a graver threat to the sector’s health.

The report contained a sliver of a silver lining: Respondents seemed to think the impact wouldn’t be immediate, with the most dramatic effects occurring about five years out.

Meanwhile, they said, generic drug makers and HIT firms would benefit significantly from the efforts underway in Washington.

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