Medical device makers keep investing despite uncertainty

The past two years have been marked with financial uncertainty for everybody, including medical device manufacturers. In the face of new regulations and uncertainty over the future of current regulations, a number of device makers have decided to increase their budgets for research and development and increase their budgets for acquisitions.

Medtronic and Saint Jude’s Medical Center have led the trend in recent months. Although Saint Jude’s Medical has not found the market for heart rhythm devices to expand as fast as the organization might have liked, the hospital continues with its plans to buyout AGA Medical holdings. The potential buyout has an estimated cost of $1.08 billion dollars. AGA Medical holdings specializes in making devices that correct many heart defects. 

Medtronic, a company that has had cuts in many other areas, has decided to increase the amount of money it spends on research and development. A company spokesperson said that research would be one of the last areas the company would choose to cut because innovation is key to the company’s success. The announcement comes after Medtronic was forced to pay $268 million dollars for a recall of faulty heart-defibrillator wires. 

FDA safety rules that govern the approval of over 90 devices may change during the current review. Until the recommendations are made, businesses are not sure how the regulations will affect the medical device industry. Corporations will usually hold off on risky ventures until they know what impact new regulations will have on the industry that they represent.