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Device makers continue fight against new tax

By July 02. 2012 11:09AM

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For much of the healthcare industry, last week's Supreme Court decision to uphold the Affordable Care Act meant the end of uncertainty and the start of implementation. But one corner of the industry is still holding out hope for a last-minute change to the law.

The medical device industry is continuing its fight to kill a new 2.3-percent sales tax on medical devices. The tax was included in the healthcare reform legislation as a funding mechanism to help the government extend insurance to an estimated 30 million Americans. The tax would generate some $29 billion over 10 years.

NPR had a fairly extensive story on the issue this morning, noting that device makers can't necessarily pass the tax on to customers since they would have to negotiate any price hike with healthcare systems and insurers. The story also notes that smaller device-makers could end up paying a hefty tax even if they're not yet profitable.

The AP reported Friday some industry watchers are still hopeful they can get the tax repealed before it takes effect.

In a statement last week, Medical Device Manufacturers Association President and CEO Mike Leahey said the "misguided" tax policy has already led to job losses and cuts to research and development.

"Today's decision adds new urgency to repealing the medical device tax so that patients and providers can continue to expect innovative devices and technologies," he said.

Another trade group, the Advanced Medical Technology Association, known as AdvaMed, noted that the House has already passed a bill to repeal the tax. In a statement, President and CEO Stephen J. Ubi expressed hope the Senate might follow the House's lead, saying "we are heartened by the number of senators who have said they oppose the tax."


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