Medical device tax becomes a political pinball

MassDevice.com covers the medical device tax

The medical device tax slated to go into effect next year has become an issue in the Republican race for the White House and a pair of Senate contests.

Mitt Romney, the former Mass. governor who’s all but assured to win the GOP nomination ahead of the November presidential ballot, decried the tax while on the stump at NuVasive’s (NSDQ:NUVA) California headquarters this week. And the tax is in play in Sens. Amy Klobuchar’s (D-Minn.) and Scott Brown’s (R-Mass.) defenses of their seats.

A MassDevice.com analysis shows that the levy, a 2.3% excise tax on U.S. sales of medical devices, could draw substantially more than the $2 billion a year it’s intended to raise.

"I just don’t think the president and his people understand that as they burden enterprise with taxation and with regulation, they hurt all of us," Romney said, according to ABC News. "These dreams that people like [NuVasive CEO Alex Lukianov] have had – these dreams are crushed, tax by tax, regulator by regulator, regulation by regulation. Washington is crushing the dreams, and crushing the dreamers. We can’t let it happen.

"The taxation burden and the regulatory burden that the president’s people have put in place has slowed down the recovery, and made this the most tepid recovery from a recession that we’ve seen since Hoover," he added. "I’m absolutely convinced that it’s time to replace the president with someone who understands what it takes to get good jobs and a rising economy and I intend to do that."

Lukianov said the medical device tax could mean layoffs for 200 NuVasive workers next year.

"These are issues that are not acceptable to the growth of our industry and really are not appropriate for our company," he said. "So we need to do everything we can to push back on these issues, to push back on Obamacare, to repeal it."

The tax has also reared its head in Minnesota, where Klobuchar is fending off challengers including Peter Hegseth, Minnesota Public Radio reported. Klobuchar’s vote for the Affordable Care Act has given her opponents an opening; Hegseth used it to claim that the law will cost Minnesota about 2,700 med-tech jobs.

“If the tax is allowed to take effect, nonpartisan experts expect major job reductions, with more than 2,700 med-tech jobs lost in Minnesota alone. The 83,000 Minnesotans employed as an indirect result of the industry will also be holding their breath,” Hegseth wrote in a March 22 op-ed in the Pioneer Press.

Klobuchar’s support for the health care law notwithstanding, she was 1 of the first legislators to seek to alter the med-tech tax. In 2009, an amendment to the ACA bill she co-sponsored with then-Sen. Evan Bayh (D-Ind.) that would have excluded medical device companies with less than $100 million in annuals sales failed to make it into the law.

Klobuchar was not available for comment.

The race for the Bay State’s junior Senate seat has also featured some rhetoric about the tax. This week Brown told MassDevice.com that he’s putting his eggs in the repeal basket, both for the device tax and for the health care law.

“It doesn’t help to modify it by going to a lower rate,” Brown told us. “No, the bottom line is the [tax] is just there to pay for a health care bill I didn’t support in the first place.”

Also this week, proxies for Brown and challenger Elizabeth Warren traded barbs over the levy, according to the Springfield, Mass., Republican.

“Elizabeth Warren’s vigorous support of Obamacare and its medical device tax will translate directly into job losses in Massachusetts,” Jim Barnett, Brown’s campaign manager, told the newspaper in prepared remarks. “New taxes taking effect in 2013 will harm the medical device industry in Massachusetts, which consists of more than 400 companies employing nearly 25,000 people. Scott Brown opposes Obamacare, and has already voted to repeal it. He believes health care should be left up to the states to decide on a case-by-case basis as we did in Massachusetts.”

"If Scott Brown and his fellow Republican hardliners get their way, they will kill the progress that has been made in providing health care coverage to millions of people, from young adults to seniors, and ending lifetime insurance limits and discrimination on pre-existing conditions," retorted Warren press secretary Alethea Harney. "Elizabeth believes problems with the medical device tax can be fixed without cutting health care coverage for millions of people or forcing Americans to fight the whole health care battle all over again."

RSS From Medical Design & Outsourcing

  • MSC Apex Diamond Python and Smart Midsurface speeds modeling to validation
    MSC Software announced a new release of MSC Apex, the company’s award-winning next generation Computer Aided Engineering (CAE) platform. The MSC Apex Diamond Python release introduces: · The fourth release of MSC Apex Modeler is a CAE Specific direct modeling and meshing solution that streamlines CAD clean-up, simplification and meshing workflow. New in this release is […]
  • Quality Metrics: FDA’s plan for a key set of measurements to help ensure manufacturers are producing quality medications
    Editor’s Note: This article is written by Ashley Boam and Mary Malarkey from the “FDA Voice” blog. Boam is an FDA’s acting Director of the Office of Policy for Pharmaceutical Quality, the Office of Pharmaceutical Quality and the Center for Drug Evaluation and Research. Malarkey is an FDA’s Director if the Office of Compliance and Biologics Quality […]
  • MasterControl’s CEO talks EQMS software and new partnerships
    MasterControl offers a quality and compliance software that helps device companies speed time to market and improve their bottom lines. Under Jon’s leadership, the company has blossomed into a market leader and has a unique corporate culture that fosters growth, excellence and quality. In this podcast, MasterControl’s CEO, Jon Beckstrand, will discuss electronic quality management […]
  • BIT Group launches white label IVD solutions
    BIT Group has launched a product line of customizable IVD white label instruments. During recent years, BIT has invested capital and resources developing customizable, ready-to-use IVD systems to address a growing demand. “The IVD market is challenging for our clients,” said Marius Balger, CEO at BIT. “OEM’s must adhere to a growing number of evolving IVD […]
  • Toshiba expands line-up of ARM Cortex-M-based microcontrollers
    Toshiba announced that it has enhanced its current “TX Family” of ARM core-based microcontrollers and started to develop three series of microcontrollers, “TXZ0 series,” “TXZ3 series” and “TXZ4 series,” as part of the “TXZTM Family.” The TXZTM Family is a new collection of flash microcontrollers that support low-power consumption and high-speed operation for IoT and M2M […]
  • Parker Hannifin consolidates, layoffs ahead
    Parker Hannifin plans to consolidate a number of internal divisions, close 2 facilities and expand its Mexican operations, according to an internally distributed letter from Andy Ross, Parker’s engineered materials group president. The company has confirmed the letter was authentic, but has not disclosed how many employees will be affected by the new plans or […]
  • 3-phase current transducer from PEM delivers all-in-one convenience
    The new RCTrms 3-ph current transducer from Power Electronic Measurements (PEM) delivers a convenient, safe and accurate solution for measuring current in three phases. It features a thin, clip-around, flexible sensor coil and provides accurate true rms measurement with 4-20 mA or 0-5 V output, enabling simple installation with PLC’s, SCADA systems or automation equipment. […]
  • Safety alert: Recall on two IV solutions from Baxter
    Baxter International announced it is voluntarily recalling two lots of intravenous (IV) solutions to the hospital and user level due to the potential presence of particulate matter. The particulate matter in each case was determined to be an insect and was identified as a result of a customer complaint. The matter was identified prior to […]
  • TSO3 begins shipment of STERIZONE VP4 Sterilizers to U.S.
    TSO3, a developer in sterilization technology for medical devices in healthcare settings, announced that the company has received purchase orders for multiple devices from the U.S. The orders are the result of the collaborative relationship between Getinge Infection Control, its sales and service provider, and TSO3. “Finally,” said R.M. Rumble, president and CEO of TSO3. “Our Vision is […]
  • Turkish medical company is seeking reseller and OEM partners in the U.S.
    UZUMCU Medical Equipment, one of Turkey’s first and largest manufacturers of medical devices, is seeking reseller and OEM partners in the U.S. The company has an array of FDA-certified OR tables, surgical lights, surgical suction units, electro devices and other medical equipment. “We want to bring our experience with distributors throughout Europe and the Middle […]
  • QImaging introduces new CCD cameras for microscopy with modern software to streamline image capture
    QImaging, a manufacturer of scientific cameras for life science and OEM applications, introduces a new series of Retiga CCD cameras, accompanied by QImaging’s new acquisition software to deliver high-performance tools for microscopy and imaging to researchers at an affordable price. The new QImaging Retiga R1, Retiga R3 and Retiga R6 cameras offer valuable technical features […]

Leave a Reply