Some medical device makers acquiesce to healthcare reform tax

Some medical device makers are fighting tooth-and-nail against proposals to tax their industry to help pay for healthcare reform. But others, including one of the sector’s biggest players, say they understand that device makers must pay a share of healthcare reform’s estimated $900 billion tab.

Days after news broke that St. Jude Medical (SJM) was pulling out of AdvaMed in a dispute over the tax, the medical device industry’s national trade council chairman Michael Mussallem (also CEO of Edwards Lifesciences (EW)) said the industry accepts the tax idea, according to Reuters.

“We’re not huge fans of it, but I think at this point we very much believe that this is something that we need to do, that’s our contribution to healthcare reform to help pay for this big bill,” Mussallem said at the Reuters Health Summit in New York.

Those remarks came almost a month to the day after Mussallem, interviewing former President Bill Clinton at AdvaMed’s annual conference in Washington, said the tax would have “a pretty devastating impact” on the industry.

“We feel like we are creating innovations that really matter. We are creating jobs. And to some extent we are sort of killing the golden goose here. But we are struggling getting our message across,” Mussallem said, before asking Clinton for advice on how to better make the industry’s voice heard inside the Beltway.

“[M]y advice is simple. If you don’t like this, you need to go to the [Senate Finance Committee] and go to the Senate and make sure the conference committee knows exactly what is wrong with [the tax proposal] and why it would cost more over the long run, in retarding technology and quality of healthcare, than the benefits would be, and also suggest some other way for them to get the money,” Clinton said. “This should be an evidence-based opinion. … [I]f you look at the benefits that technologies have brought, in terms of lengthening quality and length of life, and in terms of reducing hospitalization, particularly, I think it ought to be fairly easy to figure out if there are some places where there are abusive selling practices and isolate them without tarring the whole industry.

“You ought to be able to make an unassailable case that medical technology has been a huge boon to American life and to the American economy. And then you ought to say to other people, ‘Where is your evidence that there have been abuses?’ Then, if the evidence is right, figure out how to fix that.”

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