Survey: Medtech startups respond to the medical device tax

There are few surprises in the medtech industry’s outlook on the impact of the medical device tax, but the burden weighs heavier on the industry’s startups.

Most of the startup executives surveyed by Silicon Valley Bank said that the tax will affect their long-term growth, including delaying profitability and hampering fundraising efforts, but it has also hurt their morale.

Startup executives in the medtech industry were less optimistic than their peers in other industries about their general business environment, translating to lowered hiring and growth expectations, according to a survey conducted by Silicon Valley Bank.

"Foster incentives, not taxes for medical devices," an anonymous participant responded to the survey. "This is one industry where the U.S. used to lead the world and this position is eroding and at significant risk."

The survey depicted the tax yest another headwind the industry is facing, adding to regulatory uncertainty, delays and rising costs. Device makers have also had to content with an 11-year low in capital investments, further exacerbating an already stressed market, according to SVB.

The survey included the responses of 98 executives at U.S. medical device startups, who responded to questions about the current and projected impact of the medical device tax.

"Our team wants nothing more than to change the world for our patients. In the process this creates well paying jobs and prosperity," another respondent said. "It baffles me that the US government adds to the slope of the hill we have to climb with an unpredictable FDA process, uncertainty with regard to investment tax rates and pre-profitability corporate taxes."

The survey largely confirmed results gathered in other studies, noting the industry’s shift overseas and intention to pass most or all of the cost of the medtech tax on to customers.

The study queried 98 executives at U.S. medtech startups, finding that 30% expect to shift the cost of the tax, 25% will focus on expanding overseas rather than in the U.S. and 22% plans to spend less on R&D.

The wild card remains the handful of companies that don’t expect to feel much of a pinch as a result of the tax. Two in 10 survey respondents said they don’t believe the tax will affect their long-term growth.

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