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By the numbers: How the medical device tax shakes out
We wanted to come up with a reasonable minimum estimate of how much the tax will bring in, using as close to real-world numbers as we could find, and assess what its impact might be on companies’ bottom lines.
Because the tax is a 2.3% levy on U.S. sales only, we pored over the annual reports and filings of 49 companies selected from our Big 100 book of the world’s largest med-tech players to isolate domestic revenues for fiscal 2011.
There are some obvious problems with this method. For most of the companies on our list, which are pure-play device makers, this was relatively easy. But for the firms with business lines outside of the medical device space, this was a challenge.
More MassDevice analysis of the med-tech tax
Johnson & Johnson (NYSE:JNJ), for example, only breaks out U.S. sales for its medical device and diagnostics segment, making it well nigh impossible to parse U.S. sales for devices only. Other companies, such as Zimmer (NYSE:ZMH) or Fresenius (NYSE:FMS), report geographic segments for the Americas or for North America. Still others, like Symmetry Medical (NYSE:SMA), report U.S. sales as a percentage of total sales.
And we only looked at 49 of the Big 100 companies. There are hundreds of medical device companies selling into the U.S. market, meaning that the actual amount generated by the tax is likely to be a lot larger than our $2 billion, back-of-the-envelope calculation.
Footnotes
1: Medical device & diagnostics segment only, 2011
2 U.S. net sales, FY2011 (ended 4/29/2011)
3 U.S. sales, Healthcare segment – Americas, FY2011 (ended 9/30/2011)
4 Medical products segment, U.S. sales, 2011
5 Healthcare segment’s North American sales, 2011
6 U.S. sales, 2011
7 54% of 2011 net sales of $7.622B
8 Medical device segment’s U.S. sales, FY2011 (ended 9/30/11)
9 U.S. sales, FY2011 (ended 6/30/2011)
10 80% of U.S. sales, 2011 of $3.4B
11 U.S. sales, 2011
12 U.S. sales for vascular, diabetes and medical optics segments, 2011
13 U.S. sales, 2011 for dental, life science segments
14 Americas sales 2011
15 U.S. sales, 2011
16 U.S. sales, 2011
17 U.S. sales, 2011
18 U.S. sales,FY 2011 (ended 9/24/2011)
19 Fresenius KABI’s North American sales, Fresenius Medical Care’s North American dialysis product sales, FY2011
20 U.S. sales, FY2011 (ended 9/30/2011)
21 Medication management segment sales (24% of total 2011 sales of $4057.1B), 2011
22 U.S. sales, 2011
23 Patient-care services and therapeutic solutions segment sales = 89.1% of total sales (no significant OUS sales), 2011
24 U.S. sales, 2011
25 U.S. sales, FY2011 (ended 10/31/11)
26 U.S. sales, 2011 (TFX estimates $15M in 2013)
27 U.S. sales, FY2011 (ended 6/30/11)
28 U.S. sales, 2011
29 U.S. sales, 2011
30 U.S. sales = 62%, U.S. medical device sales = $915.1M, 2011
31 U.S. sales, 2011
32 U.S. sales = 75% of total sales of $579.0M, 2011
33 U.S. sales, 2011
34 U.S. sales, 2011
35 U.S. sales, FY2011 (ended 10/2/11) (ZOLL estimates $10M in 2013)
36 U.S. sales, 2011
37 U.S. sales, FY2011 (ended 4/2/2011)
38 U.S. sales, 2011
39 U.S. sales, 2011
40 U.S. sales, FY2011 (ended 7/31/2012)
41 U.S. sales, 2011 = 72.8% of total sales of $359M
42 U.S. sales, FY2011 (ended 9/30/11)
43 U.S. sales, 2011
44 U.S. sales, 2011
45 U.S. sales, 2011
46 U.S. sales = 45% of medical device sales of $489.1M, FY2011 (ended 12/30/2011)
47 U.S. sales, 2011
48 U.S. sales, 2011
49 U.S. medical sales = 89% of $161.7M, FY2011 (ended 7/31/11)
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