Check out my new "Shifting Paradigms Within Scientific Culture" article on the biotech/medtech website Oxbridge Biotech review!
The Science Shakedown
Neuroscientist, science writer, blogger, audiophile. Melding my love of neuroscience, biotechnology and music using the Blogosphere.
Wednesday, July 3, 2013
Monday, June 10, 2013
iNeuron: Kickstarting STEM education using the iPhone
The website Kickstarter.com
has emerged as a hip and viable way for individuals or organizations to
get money for their underfunded projects or ideas. The excitement of
crowdfunding has spilled over into the world of science and technology
but practicality and sustainability for this sort of funding model remains in question.
Kickstarter-like websites, such as Microzyra.com and Petridish.org,
strive to help STEM (Science, Technology, Engineering and Math)
researchers fund the initial stages of their new and innovative research
projects. Microzyra and Petridish have already successfully helped to
fund a significant number of research projects (60+ according to their
websites). Is crowdfunding an appropriate medium to fund basic
laboratory-based research projects or can these sites be better
utilized?
I
think the best utilization for STEM crowdfunding is to help transition
science or scientific discoveries to commercial products. Products that
will have a more direct and immediate impact on society (ie., medical
device prototypes, science education).
This is best exemplified by iNeuron, a current Kickstarter program released by Andamio Games.
iNeuron is a new iOS-based application that elevates neuroscience
education to a new standard by turning an Apple device into a
multiplayer interactive mobile game. Ideal for the high school setting,
this app teaches basic neuroscience principles using story-based
challenges in combination with network-based student-to-student
interactions (ie., gaming). Pilot studies have shown iNeuron to improve
the retention of basic neuroscience concepts within high school students
(if interested in testing out iNeuron, you can get in on their
beta-testing phase here.).
iNeuron
was developed under funding secured by the National Institute of Mental
Health (NIMH) as part of the Innovative Neuroscience K-12 Education
program (Small Business Innovation Research (SBIR). Thus, rather than use the Kickstarter campaign to fund the development of iNeuron, Andamio Games
is leveraging social media campaign to help expedite the public release
of iNeuron along with its widespread distribution through iTunes.
Campaigns
like iNeuron make the best use of the new science crowdfunding
phenomenon. Microzyra, Petridish and Kickstarter should be leveraged for
projects that help established research or technology transition toward
a more commercially viable and available product. As such, if the
iNeuron Kickstarter program can achieve its funding goal it is likely
that you will see this app appear in iTunes start as quickly as the end
of 2013!
Wednesday, March 13, 2013
Improving the Minneapolis-St. Paul Life Science Industry: Hints from the competition
For
the second year in a row the Minneapolis-St. Paul (MSP) life science
industry can pat itself on the back. According to the “2012 Global Life Science Cluster Report” issued by Jones Lang LaSalle
(JLL), a real estate and investment firm, the Twin Cities is the home
to one of the most influential and productive life science clusters in
the Unites States. The JLL rankings, which grades clusters based on the
productivity of the existing life science industry and the
infrastructure’s ability to support further growth, placed MSP in the #9
slot. Although, this ranking is a sharp improvement over the "emerging
cluster" honorable mention in 2011, MSP life science industry earnings
and growth potential pales in comparison those located within the
Greater Boston area (#1) and San Diego (#2).
The JLL ranking system has it’s shortcomings, many of which are pointed out in this recent Xconomy article. However, valuable insights about the steps the MSP life science community needs to summit the U.S. biotech industry can be gleaned just by looking at the statistical data provided in the report.
Consolidating Suburban Sprawl
One key characteristic held by most of the top 10 clusters is the existence of a centralized “corridor” or “hub” for life science companies. MSP lacks such a central hub for life science development; most biotech companies are littered across the metro area (mainly focused around the 694/494 interstate halo). Although not negatively spun in the report, the fact that “No singular life sciences corridor exists within the Minneapolis-St. Paul MSA (Metropolitan Statistical Area)” clearly distinguishes the local industry from the leading competition.
Both Boston and Raleigh, NC (home of the research Triangle) have or are developing distinct biotech corridors. Such a corridor encourages cross-company interaction and promotes idea exchange and innovation. The Boston and Raleigh biotech hubs are strategically placed in close proximity to the local academic institutions. The University of Minnesota (UMN), which serves as the major source for R&D in the Twin Cities as well as the local supply for biomedical and life science talent, is the ideal locale for a centralized research/industry corridor in MSP. With a few exceptions, very few companies have set-up shop within close proximity to the UMN.
Fortunately, a life science corridor close to the University seems eminent. In the spring of 2013 the University of Minnesota will cap off construction of the Biomedical Discovery District (BDD) with the completion of the Cancer and Cardiovascular Research Building. The fruition of this innovative research district has renewed interest in the development of an industrial park adjacent to the University. Realization of a university-Industry research corridor could be a game changer for the Twin Cities life science community.
Sponsored research gap
According to the cluster report, in 2012 the UMN received $290 million in government-funding for scientific research, ranking it #18 amongst the top 20 U.S. life science clusters. The ability of a single university to secure nearly $300 million in funding is applaudable. However, this number is less than 1/3 the amount of the next highest top 10 cluster (Philadelphia; $824 million). This could be due to a difference in sheer density of research-based academic instructions within the region: the Twin Cities having just the University of Minnesota while #1 Boston has eight, including heavy hitters like Harvard and Massachusetts Institute of Technology. The single univeristy model is not completely restrictive. Seattle (#10) sports just one major research institution (UW-Seattle), which receives more public funding dollars than any public institution in the US, nearly $600 million more than the UMN.
The JLL ranking system has it’s shortcomings, many of which are pointed out in this recent Xconomy article. However, valuable insights about the steps the MSP life science community needs to summit the U.S. biotech industry can be gleaned just by looking at the statistical data provided in the report.
Consolidating Suburban Sprawl
One key characteristic held by most of the top 10 clusters is the existence of a centralized “corridor” or “hub” for life science companies. MSP lacks such a central hub for life science development; most biotech companies are littered across the metro area (mainly focused around the 694/494 interstate halo). Although not negatively spun in the report, the fact that “No singular life sciences corridor exists within the Minneapolis-St. Paul MSA (Metropolitan Statistical Area)” clearly distinguishes the local industry from the leading competition.
Both Boston and Raleigh, NC (home of the research Triangle) have or are developing distinct biotech corridors. Such a corridor encourages cross-company interaction and promotes idea exchange and innovation. The Boston and Raleigh biotech hubs are strategically placed in close proximity to the local academic institutions. The University of Minnesota (UMN), which serves as the major source for R&D in the Twin Cities as well as the local supply for biomedical and life science talent, is the ideal locale for a centralized research/industry corridor in MSP. With a few exceptions, very few companies have set-up shop within close proximity to the UMN.
Fortunately, a life science corridor close to the University seems eminent. In the spring of 2013 the University of Minnesota will cap off construction of the Biomedical Discovery District (BDD) with the completion of the Cancer and Cardiovascular Research Building. The fruition of this innovative research district has renewed interest in the development of an industrial park adjacent to the University. Realization of a university-Industry research corridor could be a game changer for the Twin Cities life science community.
Sponsored research gap
According to the cluster report, in 2012 the UMN received $290 million in government-funding for scientific research, ranking it #18 amongst the top 20 U.S. life science clusters. The ability of a single university to secure nearly $300 million in funding is applaudable. However, this number is less than 1/3 the amount of the next highest top 10 cluster (Philadelphia; $824 million). This could be due to a difference in sheer density of research-based academic instructions within the region: the Twin Cities having just the University of Minnesota while #1 Boston has eight, including heavy hitters like Harvard and Massachusetts Institute of Technology. The single univeristy model is not completely restrictive. Seattle (#10) sports just one major research institution (UW-Seattle), which receives more public funding dollars than any public institution in the US, nearly $600 million more than the UMN.
http://www.health.umn.edu/research/bdd/ |
The
UMN acknowledges the necessity to supplement its research funding
through non-government fundraising and has put forth a noble effort to
secure more private revenue. The face of this movement is the
University’s Office for Technology Commercialization,
which “facilitate(s) the transfer of UMN research to licensees for
development of new products and services that benefit the public good,
foster economic growth and generate revenue to support the University’s
research and education goals.” With the help of the OTC and programs
such as the Minnesota Innovation Partnership and the forthcoming Entrepreneurial Leave Program, the UMN saw 12 start-up companies arise from university-sponsored research in 2012.
Increase Pharma
Companies that focus on pharmaceutical generation and production are a cornerstone of leading life science clusters like San Diego. Although Minneapolis-St.Paul is widely acclaimed for its medical device industry, the local biopharma industry is clamoring for recognition and support. In 2010, Minnesota invested nearly 4-times as much on medical technology ($332 million) than on biotech/pharma ($86 million). Diversifying the local life science portfolio to include more biopharma may be a huge revenue and employment generator for the state.
Increase Pharma
Companies that focus on pharmaceutical generation and production are a cornerstone of leading life science clusters like San Diego. Although Minneapolis-St.Paul is widely acclaimed for its medical device industry, the local biopharma industry is clamoring for recognition and support. In 2010, Minnesota invested nearly 4-times as much on medical technology ($332 million) than on biotech/pharma ($86 million). Diversifying the local life science portfolio to include more biopharma may be a huge revenue and employment generator for the state.
Thursday, November 29, 2012
Epigenetics of Human Health
The most recent episode of Radiolab entitled, "Inheritance",
featured a segment suggesting that environmental factors experienced by
one generation of humans can affect the livelihood of future
generations. This story focuses on a Swedish study that looked at
familial health in response to well-recorded periods of famine in the
town of Överkalix.
The researchers asked how starvation in one generation of its citizens
affected the health of their progeny. The results, as echoed by Jad
Abumrad and Robert Krulwich of Radiolab, are quite astounding. The study
reported that a male individual that experienced famine between the
ages of 9-12 was more likely to have healthier children (and
grandchildren) of their own. This article specifically cited a reduction
in occurrence of heart disease (75%) and diabetes. The icing on the
cake, however, is the studies claim that the average life expectancy of
these progeny was approximately 30 years more than those of their
well-fed peers!
Not all, however, is peachy. In this study, male adolescents that had abundant access to food between the ages of 9 - 12 were four times as likely to have children and grandchildren that had increased heart disease or diabetes (4-fold increase risk).
Could these findings provide a commentary on the current health profile of the American population? As an example, let’s examine the incidence of diabetes and obesity in the United States. According to the Center for Disease Control (CDC), rates of Americans diagnosed with diabetes continue to increase yearly. And these are not meager gains; the percentage of diabetics in the U.S has double in 8 years (1998 to 2006), a feat that previously took almost 30 years (1970 - 1998). Similarly, obesity rates have skyrocketed in the U.S. in recent years, shocking the nation into re-evaluating their dietary and exercise habits.
Could an increase in obesity and diabetes amongst the American population be related to the eating habits and food availability during the nations previous generation? During the post-World War II era, considerable advancements were made in food processing techniques. This resulted in mass production, cheaper cost and greater availability of foods. In effect, the grandparents of the current youth were raised in a food abundant environment, which was probably not the case for the grandparent’s grandparents.
Not all, however, is peachy. In this study, male adolescents that had abundant access to food between the ages of 9 - 12 were four times as likely to have children and grandchildren that had increased heart disease or diabetes (4-fold increase risk).
Could these findings provide a commentary on the current health profile of the American population? As an example, let’s examine the incidence of diabetes and obesity in the United States. According to the Center for Disease Control (CDC), rates of Americans diagnosed with diabetes continue to increase yearly. And these are not meager gains; the percentage of diabetics in the U.S has double in 8 years (1998 to 2006), a feat that previously took almost 30 years (1970 - 1998). Similarly, obesity rates have skyrocketed in the U.S. in recent years, shocking the nation into re-evaluating their dietary and exercise habits.
Could an increase in obesity and diabetes amongst the American population be related to the eating habits and food availability during the nations previous generation? During the post-World War II era, considerable advancements were made in food processing techniques. This resulted in mass production, cheaper cost and greater availability of foods. In effect, the grandparents of the current youth were raised in a food abundant environment, which was probably not the case for the grandparent’s grandparents.
Thursday, November 15, 2012
Utilizing the Biologic Battery of the Inner Ear
In the most recent issue of Nature Biotechnology, a team of researchers from Massachusetts Institute of Technology and Massachusetts Eye and Ear Infirmary have published, for the first time, a method to tap into a limitless source of energy from a biological battery located in the most unsuspecting of locations - the inner ear.
Patrick Mercier and colleagues developed a microchip that can be inserted into the inner ear to harvest energy generated by the endocochlear potential within the cochlea. The endocochlear potential is essential for cochlear mechanotransduction, that is, converting auditory sound from waves in the cochlea into nerve impulses that travel up to the brain. The endocochlear potential is generated by the ionic concentration difference between two fluid compartments within the inner ear. This ionic imbalance is, in essence, a biologic battery, resulting in 70 - 100 mV electrochemical potential. By inserting electrodes into each of the fluid compartments of the guinea pig cochlea and connecting these electrodes to a specialized microchip, this study was able to utilize the biologic battery of the inner ear to fuel a 2.4 GHz radio for more than 5 hours.
As the global market for implantable devices, such as cochlear implants and the myriad of deep brain stimulation apparati, grows so does the need to improve methods for providing sustainable power to maintain their operation. Anatomical restrictions often limit the size of usable batteries, resulting in risky surgery for battery replacement or use of awkward out-of-body power sources. Harvesting energy from sources within the human body, as reported in this study, could revolutionize the accessibility and the practicality of implantable electronic devices by resolving the issue of sustainable power.
While transmitting a radio signal for 5 hours may seem like small cheese, this study illustrates the feasibility of utilizing within-human biological batteries to create sustainable power for implantable devices. With further optimization of electrode design, enhancements in microchip processing, and the continually advancement of wireless transmission capabilities, we may see biologic battery-operated cochlear implants in the not-so-distant future.
Thursday, November 8, 2012
Turn down your iPod: How can biotech help prevent hearing loss?
The widespread use of iPods (and other portable mp3 players) continues to raise concern amongst heath care professionals and parents about the hazards of excessive exposure to loud music. Recent studies show that listening to loud music through headphones can result in temporary hearing loss. While the verdict is still out about whether loud music through iPods can result in permanent hearing loss, studies show that between 10- 20% of teenagers are
listening to music on their mp3 players at volumes known to be at high
risk for permanent hearing damage. This debate will likely be resolved
in decades to come when hearing loss can be studied in adults from the
iPod-generation. Nevertheless, precautions must still be taken in the
present to prevent hearing loss in the future.
Noise-induced hearing loss is caused by the loss of sound-sensitive cells in the cochlea, which relay auditory information to the brain, following exposure to loud noise. These cells, once damaged, are permanently lost resulting in irreversible hearing impairment.
So, what qualifies as “loud”? According to guidelines from the National Institute for Deafness and Other Communication Disorders sounds above 85 decibels (dB) can lead to noise-induced hearing loss. The sound output of many mp3 devices exceed this 85 dB threshold. For example, maximum volume output form an iPod can surpass 115 dB. While very few people listen to their mp3 players at the highest volume, exposure to moderately loud (85 dB) music for extended periods of time will cause permanent damage to the sensory cells in the ear. As a general rule, the louder the sound, the quicker hearing loss damage can occur.
The good news, however, is that music listened to at or below 75 dB, even over extended periods of time, rarely results in permanent hearing damage. Thus, devices that make iPod listeners more aware about the intensity of the sounds they are putting in their ears or, even better, prevent the listener from exposing themselves to harmfully loud music altogether, are necessary. Design and use of such devices will have a significant impact on future hearing loss. Some currently available technological solutions that attempt to do just that are discussed below.
The most simple and accessible option to proactively preserve your hearing is by utilizing the “volume limit” feature that appears on a number of mobile device. The limiter is built into the device and allows you to choose the maximum volume output of your player. This feature is not available on all portable mp3 players, but can be found on all Apple products (iPod, shuffle, & nano). The use and setting of the volume limit option is dependent on the listeners awareness of and motivation to use it.
The volume limiter, although a good start for hearing loss prevention, provides a somewhat false sense of security. First, volume controls on mp2 players vary widely and can only be trusted as an arbitrary indicator of volume level. Measuring dB sound pressure level from the headphone speaker is a more accurate way to assess music volume. Second, it turns out that headphone quality and construction greatly impact the dB output of the mp3 player. Thus, a more effective hearing loss prevention product should limit sound output directly from the headphones. This strategy has been targeted by a number of companies, particularly focusing on preserving hearing in children and teenagers. Earbuds and headphones created by KidzSafe and Earzone limit the decibel output of headphones to less than 85 dB, effectively eliminating the worry for noise-induced hearing loss. Alternatively, EarSaver makes a low-priced adapter that reduces the output of factory headphones by an average of 18 dB. Although marketed towards kids, these products can also be used by adults.
Noise-cancelling and sound-isolating headphones limit the need for excessive volume music listening by reducing the amount of external noise that reaches the listener’s ears. In fact, loud environmental noise (i.e., airplane engines, subway, traffic) is one of the most likely reasons why people crank up the volume on their iPods. Drowning out background noise by increasing headphone volume inadvertently puts the listener’s ears in harms way. Noise-cancelling headphones contain a microphone in the earbud that samples noise in the environment. The headphone then supplies an inverse audio signal that effectively cancels out the impact of the external noise. This technology, while fabulous at reducing the listening volume on iPods, can be spendy. Good quality noise-cancelling headphones will range from $100 - $400.
Unfortunately, the successful use of the aforementioned products falls squarely on the shoulders of the owners of iPods and mp3 players. It is clear that a greater outreach is need to educate young listeners about the potential harm of mp3 player volume on hearing. Likewise, the available options for hearing loss prevention need to be more visible. Placing more overt warnings on mp3 packaging, rather than tucked away in an instruction manual, would be a good start. Recent research suggests that exposure to intense, or even moderate levels of noise can result in inner ear damage years before the perception of hearing loss. Thus, negative consequence from iPod use will only be measurable a decade or two from now, when hearing aid demand and hearing related health care costs from the iPod generation skyrocket. At that time, it is likely that government mandated warnings won’t seem so extraordinary. In the future, we may also need to consider implementing safety standards that limit the maximum volume delivery on portable mp3 device, much like those found in Europe.
Until then, the challenge remains to increase the visibility and affordability of quality, easy-to-use hearing prevention devices for portable mp3 players. The consumers are waiting. The awareness about the ills of constant, loud headphone listening is increasing. Industry needs to capitalize on the millions of headphone wearing teenagers and students and create more volume-reducing products that are affordable and accessible. They need to tweak their marketing strategy to entice the millions of iPod listeners to want to use the volume-limiting application because of it’s ease, to make the listener want to purchase the noise-cancelling headphones because they are equal in price or cheaper than existing earbuds, and to ultimately make a difference in the movement to prevent noise-induced hearing loss.
Noise-induced hearing loss is caused by the loss of sound-sensitive cells in the cochlea, which relay auditory information to the brain, following exposure to loud noise. These cells, once damaged, are permanently lost resulting in irreversible hearing impairment.
So, what qualifies as “loud”? According to guidelines from the National Institute for Deafness and Other Communication Disorders sounds above 85 decibels (dB) can lead to noise-induced hearing loss. The sound output of many mp3 devices exceed this 85 dB threshold. For example, maximum volume output form an iPod can surpass 115 dB. While very few people listen to their mp3 players at the highest volume, exposure to moderately loud (85 dB) music for extended periods of time will cause permanent damage to the sensory cells in the ear. As a general rule, the louder the sound, the quicker hearing loss damage can occur.
The good news, however, is that music listened to at or below 75 dB, even over extended periods of time, rarely results in permanent hearing damage. Thus, devices that make iPod listeners more aware about the intensity of the sounds they are putting in their ears or, even better, prevent the listener from exposing themselves to harmfully loud music altogether, are necessary. Design and use of such devices will have a significant impact on future hearing loss. Some currently available technological solutions that attempt to do just that are discussed below.
The most simple and accessible option to proactively preserve your hearing is by utilizing the “volume limit” feature that appears on a number of mobile device. The limiter is built into the device and allows you to choose the maximum volume output of your player. This feature is not available on all portable mp3 players, but can be found on all Apple products (iPod, shuffle, & nano). The use and setting of the volume limit option is dependent on the listeners awareness of and motivation to use it.
The volume limiter, although a good start for hearing loss prevention, provides a somewhat false sense of security. First, volume controls on mp2 players vary widely and can only be trusted as an arbitrary indicator of volume level. Measuring dB sound pressure level from the headphone speaker is a more accurate way to assess music volume. Second, it turns out that headphone quality and construction greatly impact the dB output of the mp3 player. Thus, a more effective hearing loss prevention product should limit sound output directly from the headphones. This strategy has been targeted by a number of companies, particularly focusing on preserving hearing in children and teenagers. Earbuds and headphones created by KidzSafe and Earzone limit the decibel output of headphones to less than 85 dB, effectively eliminating the worry for noise-induced hearing loss. Alternatively, EarSaver makes a low-priced adapter that reduces the output of factory headphones by an average of 18 dB. Although marketed towards kids, these products can also be used by adults.
Noise-cancelling and sound-isolating headphones limit the need for excessive volume music listening by reducing the amount of external noise that reaches the listener’s ears. In fact, loud environmental noise (i.e., airplane engines, subway, traffic) is one of the most likely reasons why people crank up the volume on their iPods. Drowning out background noise by increasing headphone volume inadvertently puts the listener’s ears in harms way. Noise-cancelling headphones contain a microphone in the earbud that samples noise in the environment. The headphone then supplies an inverse audio signal that effectively cancels out the impact of the external noise. This technology, while fabulous at reducing the listening volume on iPods, can be spendy. Good quality noise-cancelling headphones will range from $100 - $400.
Unfortunately, the successful use of the aforementioned products falls squarely on the shoulders of the owners of iPods and mp3 players. It is clear that a greater outreach is need to educate young listeners about the potential harm of mp3 player volume on hearing. Likewise, the available options for hearing loss prevention need to be more visible. Placing more overt warnings on mp3 packaging, rather than tucked away in an instruction manual, would be a good start. Recent research suggests that exposure to intense, or even moderate levels of noise can result in inner ear damage years before the perception of hearing loss. Thus, negative consequence from iPod use will only be measurable a decade or two from now, when hearing aid demand and hearing related health care costs from the iPod generation skyrocket. At that time, it is likely that government mandated warnings won’t seem so extraordinary. In the future, we may also need to consider implementing safety standards that limit the maximum volume delivery on portable mp3 device, much like those found in Europe.
Until then, the challenge remains to increase the visibility and affordability of quality, easy-to-use hearing prevention devices for portable mp3 players. The consumers are waiting. The awareness about the ills of constant, loud headphone listening is increasing. Industry needs to capitalize on the millions of headphone wearing teenagers and students and create more volume-reducing products that are affordable and accessible. They need to tweak their marketing strategy to entice the millions of iPod listeners to want to use the volume-limiting application because of it’s ease, to make the listener want to purchase the noise-cancelling headphones because they are equal in price or cheaper than existing earbuds, and to ultimately make a difference in the movement to prevent noise-induced hearing loss.
The Affordable Care Act and the future of the Medical Device Industry
This article was originally published on October 31, 2012 at the OBR Roundtable Review.
The United States has the world’s largest medical device industry, with an estimated worth of $105.8 billion dollars in 2011. US companies are pioneering medical device innovation and creation worldwide and are responsible for the direct employment of ~ 400,000 workers. The continued success and growth of the medical technology sector will have a significant impact on the nation’s economic progress out of the current recession. It will also directly affect the accessibility of affordable and necessary medical care for individuals across the country. Representatives from the medical device industry as well as both Democratic and Republican politicians claim that the future of the lucrative and world-leading biomedical device industry in the US is in jeopardy with the upcoming Presidential election. The issue at hand: The Patient Protection and Affordable Care Act (PPACA).
In March of 2010, President Barack Obama signed into law the PPACA, initiating the largest overhaul of the US healthcare system since the creation of Medicare and Medicaid in 1965. The goal of the PPACA, or “Obamacare”, is to reduce the number of uninsured Americans and decrease the cost of health care. So why is the medical device industry up in arms? Increased costs associated with health care reform require new streams of federal revenue. One such source, which was included in the PPACA, is through the taxation of medical device manufacturers and importers.
The Medical Device Tax (MDT), which is estimated to generate $20 billion in ten years, will impart a 2.3% tax on all device manufacturers and importers in the US. The governmental justification for this tax is that the PPACA will increase the number of insured people in the US, translating into new business for medical device companies. This will generate a new source of revenue for the device industry effectively offsetting the cost of the new tax.
Opponents of the PPACA state that it will critically harm the industry by stifling innovation, reducing employment and encouraging the exodus of medical device production outside of the US. Industry professionals and politicians from Minnesota are leading this charge to repeal the MDT. Minneapolis and St. Paul is one of the largest medical device hubs, housing notable companies like 3M, Medtronic, American Medical Systems and St. Jude Medical. Through the initiative of LifeScience Alley, a trade association that facilitates development of Minnesota’s medical device and biotech industry, the local industry has lobbied for a repeal of the MDT. These actions have gained the support of local politicians, including US congressman, Erik Paulsen (R-MN). Such vibrant opposition is also found in other medical device hotspots across the country, including Colorado and California. Thus far, all action towards repeal of the tax have been thwarted by the Supreme Court decision in June 2012 upholding the constitutionality of the PPACA and ensuring its continued implementation.
With the next presidential election fast approaching, the fate of the PPACA and it’s impact on the medical device industry is imminent; Romney vows to repeal Obamacare if elected, while re-election of President Obama most certainly solidifies the completion of health care reform. So, let us examine the argument for and against the MDT.
Medical device bullying: Opponents have suggested that the Obamacare has unfairly targeted the medical device industry by placing such burdensome tax on their products. The truth, however, is that the medical device industry is just one of many sectors that will see increased taxation to help offset the costs of universal health care. Again, the tax was justified by a speculated increase in device users due to the new healthcare subscribers under the PPACA.
Industry oversea exodus: Contrary to the claims by its opponents, the MDT creates no incentive for US companies to shift their operations overseas. In fact, the PPACA was carefully designed to avoid such a manufacturing exodus by applying the tax equally to both imported and domestically manufactured products. In addition, US manufactured devices that are exported are tax-exempt. This exemption may actually help to expand the market for US made medical devices by encouraging export.
Stifling innovation: The 2.3% Medical Device excision provision, which taxes all companies that manufacture and import medical device related products, will affect large and small companies differently. Larger companies will have to re-examine the efficiency of their administrative and manufacturing operations in order to offset the costs of the excision tax. In the short term this may require a workforce reduction. A study released and financed by AdvaMed, an industry trade association, suggests that the MDT could result in a net loss of over 45,000 jobs in the US. A few companies, such as Minnesota-based St. Jude Medical Inc. and Michigan-based Stryker Corporation, have cited anticipation of the tax law to support the recent release of hundreds of employees and as justification for considerable administrative restructuring.
While a 2.3% tax is unlikely to dramatically affect the operations of larger medical device companies, smaller startup medical device companies will be burdened with additional financial hurdles. This is because the MDT taxes the total revenue of the company, regardless of whether it turns a profit. Small device companies often spend more of their earnings on research and development than the revenue they collect from sales. Thus, many businesses will owe more taxes than they generate from their operations. This puts a greater financial burden on start-up medical device companies just to sustain their product development.
Defenders of the tax say that any loss in revenue from the excision will be more than made up for by increased business through new health care beneficiaries. In Massachusetts, where universal health care was put into place in 2006 by then-governor Mitt Romney, local medical device companies have not seen increased revenue or product use despite an increase in people with health care. Many healthcare providers rely on medical products from providers across the country, thus, extrapolating the effects of Massachusetts health care reform on local medical device profitability is misleading.
In the end, it is clear that under the MDT companies will be forced to undergo a severe cost-restructuring, eliminating inefficient business operations to absolve the cost of the tax. With restructuring comes layoffs, which, in the short term, will elevate the already high unemployment in the US. In the long run, however, operations overhaul will result in a more cost-conscious and efficient business model. I expect that a brief lull in innovation and creation will occur while medical device industry adapts to the new tax, but will be followed by a return of the illustrious and prolific US medical device industry.
With just under a week until the next US Presidential election, the future of the PPACA and the medical device industry is on the line. Unfortunately, claims by both the advocates and opponents of the new tax are really only speculation. With that in mind, it is up to the voters to assess how much they want to gamble on nationalizing healthcare in the US? Specifically, are the potential negative effects on the medical device industry worth upholding the PPACA? And, would these negative effects be permanent?
The United States has the world’s largest medical device industry, with an estimated worth of $105.8 billion dollars in 2011. US companies are pioneering medical device innovation and creation worldwide and are responsible for the direct employment of ~ 400,000 workers. The continued success and growth of the medical technology sector will have a significant impact on the nation’s economic progress out of the current recession. It will also directly affect the accessibility of affordable and necessary medical care for individuals across the country. Representatives from the medical device industry as well as both Democratic and Republican politicians claim that the future of the lucrative and world-leading biomedical device industry in the US is in jeopardy with the upcoming Presidential election. The issue at hand: The Patient Protection and Affordable Care Act (PPACA).
In March of 2010, President Barack Obama signed into law the PPACA, initiating the largest overhaul of the US healthcare system since the creation of Medicare and Medicaid in 1965. The goal of the PPACA, or “Obamacare”, is to reduce the number of uninsured Americans and decrease the cost of health care. So why is the medical device industry up in arms? Increased costs associated with health care reform require new streams of federal revenue. One such source, which was included in the PPACA, is through the taxation of medical device manufacturers and importers.
The Medical Device Tax (MDT), which is estimated to generate $20 billion in ten years, will impart a 2.3% tax on all device manufacturers and importers in the US. The governmental justification for this tax is that the PPACA will increase the number of insured people in the US, translating into new business for medical device companies. This will generate a new source of revenue for the device industry effectively offsetting the cost of the new tax.
Opponents of the PPACA state that it will critically harm the industry by stifling innovation, reducing employment and encouraging the exodus of medical device production outside of the US. Industry professionals and politicians from Minnesota are leading this charge to repeal the MDT. Minneapolis and St. Paul is one of the largest medical device hubs, housing notable companies like 3M, Medtronic, American Medical Systems and St. Jude Medical. Through the initiative of LifeScience Alley, a trade association that facilitates development of Minnesota’s medical device and biotech industry, the local industry has lobbied for a repeal of the MDT. These actions have gained the support of local politicians, including US congressman, Erik Paulsen (R-MN). Such vibrant opposition is also found in other medical device hotspots across the country, including Colorado and California. Thus far, all action towards repeal of the tax have been thwarted by the Supreme Court decision in June 2012 upholding the constitutionality of the PPACA and ensuring its continued implementation.
With the next presidential election fast approaching, the fate of the PPACA and it’s impact on the medical device industry is imminent; Romney vows to repeal Obamacare if elected, while re-election of President Obama most certainly solidifies the completion of health care reform. So, let us examine the argument for and against the MDT.
Medical device bullying: Opponents have suggested that the Obamacare has unfairly targeted the medical device industry by placing such burdensome tax on their products. The truth, however, is that the medical device industry is just one of many sectors that will see increased taxation to help offset the costs of universal health care. Again, the tax was justified by a speculated increase in device users due to the new healthcare subscribers under the PPACA.
Industry oversea exodus: Contrary to the claims by its opponents, the MDT creates no incentive for US companies to shift their operations overseas. In fact, the PPACA was carefully designed to avoid such a manufacturing exodus by applying the tax equally to both imported and domestically manufactured products. In addition, US manufactured devices that are exported are tax-exempt. This exemption may actually help to expand the market for US made medical devices by encouraging export.
Stifling innovation: The 2.3% Medical Device excision provision, which taxes all companies that manufacture and import medical device related products, will affect large and small companies differently. Larger companies will have to re-examine the efficiency of their administrative and manufacturing operations in order to offset the costs of the excision tax. In the short term this may require a workforce reduction. A study released and financed by AdvaMed, an industry trade association, suggests that the MDT could result in a net loss of over 45,000 jobs in the US. A few companies, such as Minnesota-based St. Jude Medical Inc. and Michigan-based Stryker Corporation, have cited anticipation of the tax law to support the recent release of hundreds of employees and as justification for considerable administrative restructuring.
While a 2.3% tax is unlikely to dramatically affect the operations of larger medical device companies, smaller startup medical device companies will be burdened with additional financial hurdles. This is because the MDT taxes the total revenue of the company, regardless of whether it turns a profit. Small device companies often spend more of their earnings on research and development than the revenue they collect from sales. Thus, many businesses will owe more taxes than they generate from their operations. This puts a greater financial burden on start-up medical device companies just to sustain their product development.
Defenders of the tax say that any loss in revenue from the excision will be more than made up for by increased business through new health care beneficiaries. In Massachusetts, where universal health care was put into place in 2006 by then-governor Mitt Romney, local medical device companies have not seen increased revenue or product use despite an increase in people with health care. Many healthcare providers rely on medical products from providers across the country, thus, extrapolating the effects of Massachusetts health care reform on local medical device profitability is misleading.
In the end, it is clear that under the MDT companies will be forced to undergo a severe cost-restructuring, eliminating inefficient business operations to absolve the cost of the tax. With restructuring comes layoffs, which, in the short term, will elevate the already high unemployment in the US. In the long run, however, operations overhaul will result in a more cost-conscious and efficient business model. I expect that a brief lull in innovation and creation will occur while medical device industry adapts to the new tax, but will be followed by a return of the illustrious and prolific US medical device industry.
With just under a week until the next US Presidential election, the future of the PPACA and the medical device industry is on the line. Unfortunately, claims by both the advocates and opponents of the new tax are really only speculation. With that in mind, it is up to the voters to assess how much they want to gamble on nationalizing healthcare in the US? Specifically, are the potential negative effects on the medical device industry worth upholding the PPACA? And, would these negative effects be permanent?
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