"More than three-quarters of the cost to bring a medical device from concept to the U.S. market is spent clearing regulatory hurdles, according to a Stanford University report."[1]
I am not saying the companies aren't profitable. They aren't profitable the way people make them out to be.
And if there are indeed windfall profits to be made what is preventing smart-ass entrepreneurs from jumping in and making those profits ?
Tim Cook says that the Apple Watch won't become a regulated medical device, but Apple might make another product that is. Cook made the comments earlier today in an interview with The Telegraph, stating that putting the Apple Watch through Food and Drug Administration testing would slow its release cycle down too much and "hold [Apple] back from innovating."
"And if there are indeed windfall profits to be made what is preventing smart-ass entrepreneurs from jumping in and making those profits?"
Incredibly high barriers to entry and very large established players who have already cornered the market? Following your logic, oil companies must not be very profitable since there aren't very many entrepreneurs buying their own offshore drilling platforms.
"They aren't profitable the way people make them out to be."
Who are these people? What is this way?
What concrete assertion are you refuting? How do you explain the P/E ratios of the biggest medical device companies?
If the cost of regulation is such a drag on profits and innovation, why are medical supply companies that primarily serve the US market so much more profitable in the long term than their counterparts in other countries?
Are you alleging that there's a bubble, or that they're cooking their books, or that they're not one of the most consistently profitable industries?
I am not saying the companies aren't profitable. They aren't profitable the way people make them out to be.
And if there are indeed windfall profits to be made what is preventing smart-ass entrepreneurs from jumping in and making those profits ?
Tim Cook says that the Apple Watch won't become a regulated medical device, but Apple might make another product that is. Cook made the comments earlier today in an interview with The Telegraph, stating that putting the Apple Watch through Food and Drug Administration testing would slow its release cycle down too much and "hold [Apple] back from innovating."
[1] http://www.massdevice.com/study-fda-related-activities-cost-...