The medical device industry’s share of the healthcare reform effort would be $4 billion a year of Sen. Max Baucus gets his way.
The Senate Finance Committee chairman released a “framework” version of the committee’s healthcare reform bill that contains a “medical device manufacturers fee,” allocated by market share, of $4 billion a year beginning in 2010.
“To the best of our knowledge, this is the first time such a medtech deal has been publicly disclosed in writing by a key government official,” Wells Fargo analyst Larry Biegelsen said in a note to investors Tuesday, according to Dow Jones Newswires.
It’s sure to meet stiff resistance from the industry, starting with the Advanced Medical Technology Assn. (AdvaMed), which has already issued a press release condemning the measure.
AdvaMed president and CEO Stephen Ubl said the medical device manufacturing industry plans to “vigorously oppose” the tax, which would amount to a $40 million levy over 10 years.
“This tax will raise the cost of care for all patients, especially those in greatest need of advanced treatments and diagnostics. It is a form of double taxation, since a portion of the hundreds of billions in cuts aimed at our customers, including hospitals, nursing homes, and home health care agencies will be passed on to us,” Ubl said in the statement. “Moreover, the tax will fall most heavily on the small and emerging companies that are the backbone of our industry, often driving development of cutting-edge treatments and cures, and are least able to pay new taxes.”
The framework also indicates that some sort of federal gift ban is likely, mandating increased transparency of industry payments to physicians:
“Drug, device and biologic manufacturers would be required to report any payments or transfers of value, with limited exceptions, made to a physician or teaching hospital. The [Dept. of Health and Human Services] Secretary would publish such information in a clear and searchable format. The provision would not preempt any state or local laws that go beyond the scope of this federal requirement.”