Study: Health reform law will produce major gains for some device companies

The Affordable Care Act will help produce big gains in the coming years for device companies that produce blood glucose meters and other home care products, according to a new study.

As Forbes reports, the analytics firm IHS said the broader consumer medical device industry should expand anywhere from 5% to 9% in the next few years. Translated, that means revenue for the sector will jump from $7.9 billion in 2012 to $10.6 billion by 2017, the report concluded.

Companies including Roche ($RHHBY) and Johnson & Johnson ($JNJ) stand to gain here, Forbes notes, plus any others that make blood glucose meters, or monitoring devices that track things such as cholesterol and movement.

What are the drivers behind this? Aging baby boomers and a healthcare industry that focuses more on wellness and prevention are factors, Forbes and IHS noted. The Affordable Care Act also plays a big role here, the article reminds us, with an emphasis on free preventative care and home monitoring, as a way to keep care standards solid but also reduce costs. That's part of the health reform law's greater overall emphasis on payment for quality of overall care, versus the current fee-for-service model.

While one part of the device industry stands to gain from the health reform, the broader sector remains strongly opposed to one of its key elements: the 2.3% medical device industry tax. Device tax opponents have continued to lobby Congress to repeal the measure.

- here's the Forbes article
- see the IHS report