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With a population over 300 million, the USA is the third largest country in the world, behind China and India. The largest state is California, with a population of 37 million.
At an estimated US$120.4 billion in 2012, the US medical device market is the world's largest. Per capita expenditure, at US$381, is the second highest in the world.
Much of the market is in private hands; there is no single health system. Public healthcare systems, known as Medicaid, for those on low incomes, are operated by each State. Since 1960, the Medicare system has provided hospital care for the elderly; this has also provided prescription drug coverage since 2006.
President Obama succeeded in signing his healthcare reform bill into law on 23rd March 2010. The bill, formally called the Patient Protection and Affordable Care Act (PPACA) HR 3590, will eventually extend health insurance cover to an estimated 32 million Americans who do not have any form of health insurance.
In January 2012, the Obama administration said the bill is on track to being implemented, despite opposition from some States. The law requires all States to create new health insurance markets called exchanges, so that people who do not have insurance can buy tax-payer subsidised private cover. The law also expands eligibility for Medicaid so low-income adults who have no dependent children can get government insurance. Putting the two approaches together, more than 30 million Americans are expected to gain coverage by January 2014. At the end of June 2012, the Supreme Court upheld the entire law in a 5-to-4 decision which deemed that the mandate was constitutional under the taxing authority afforded to the federal government. Despite only 13 States having set up exchanges to-date, the re-election of President Obama may spur action from those which were waiting for the election result. The remaining States which are still opposed to the changes have until January 2013, one year before the exchanges are to be up and running, before the Federal government can intervene and manage the process.
The USA is home to many of the world's leading medical device manufacturers, such as Johnson & Johnson, General Electric, Baxter, Covidien and Medtronic. Seven out of the world's top ten medical device manufacturers are US companies.
Imports are forming an increasingly significant part of the market, and now account for around 30% of the total. This growth is partly explained by US manufacturers using cheap locations abroad, such as Ireland or Mexico, in order to re-export to the US market.
Imports grew by 8.9% to reach US$35.3 billion in 2011. All categories posted positive growth, with consumables recording the strongest rate of 12.1% for the period, reaching US$5.3 billion. The largest category, diagnostic imaging, rose by 7.4% during the period to reach US$8.3 billion.
The market is highly regulated, and can be an expensive one in which to operate. It is, however, transparent and 'rules-based'. The US is a major site for R&D and clinical trials.
A 2.3% tax on sales of medical devices comes into effect in January 2013 as part of the Patient Protection and Affordable Care Act (PPACA). Estimates suggest this will add US$2.5 billion to the 2013 tax bill of the US medical device manufacturing industry.
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