With big pharma already reducing its R&D budgets to fight the patent cliff and rising costs, the budget cut for government bodies could make the situation worse in terms of new and innovative research taking place in the field. University labs will be forced to work on shoe-string budgets halting research programs. It could also hugely affect clinical trial programs with demand rising for faster and more efficient trials.

The upside of Obamacare Act
Even as medical devices and drug companies fight pricing pressures due to increase in taxes and reduction in R&D budgets, the promise of an increase in the number of patients, as the US government expands its health insurance cover, will offset some of the losses to be incurred by the industry. The companies, however, are not hopeful that it would mean any kind of windfall gain for them.

The new Act is also expected to boost the sale of generics which in turn could mean a boon for the generics companies located in Asia, especially India, that are exporting to the US.

US President Barack Obama has hailed the deal reached as "just one step in the broader effort to strengthen the economy". Only time will tell if the US economy will avert another downward slide at the beginning of March 2013.