The U.S. Supreme Court’s decision to uphold the the healthcare reform law shocked the world this morning, but it doesn’t stop the fight to repeal the medical device tax, according to several medical device company leaders.
Cook Group chairman Steve Ferguson told MassDevice he isn’t disheartened by the Supremes’ decision.
"We never thought that it would affect the tax," Ferguson told us. "Whichever way the decision went, we felt we would still have to move forward with the repeal efforts."
Ferguson, who has estimated that the 2.3% excise tax on revenues will kill up to 15% of Cook Medical’s profits, said his sights are squarely focused on the battlefield of the U.S. Senate, where Sen. Orrin Hatch’s (R-Utah) S.17 "Medical Device Access and Innovation Protection Act" currently has 29 co-sponsors – none of whom are Democrats.
The U.S. House of Representatives opted to repeal the medical device tax in a contentious 270-146 vote June 7. However, that vote was mostly symbolic, as senior White House advisors vowed to block the bill, H.R. 436, should it ever reach President Barack Obama’s desk. That gesture may have galvanized Democratic opposition to the bill’s offset, which would take a stronger hand in recouping over-paid tax subsidies from low- and middle-income households.
For his part, Ferguson thinks the tide is turning in the medical device industry’s favor.
"There are a substantial number of senators, both Republicans and Democrats, who have expressed support for the repeal of the tax," he told us. "The question is, will leadership allow it to come to the floor for a vote? I think if it comes to the floor for a vote, there are sufficient votes to pass the repeal."
In fact, Ferguson told us today’s ruling could be a counter-intuitive bonus, by removing any remaining obstacles from getting the upper house of Congress to vote.
"Up until now there were 2 reluctances that we heard from senators. One was that the House hadn’t passed anything, and 2 was, ‘Let’s wait until after the Supreme Court makes a decision.’ Both of those things have now occurred, so it’s squarely in the Senate’s jurisdiction to make the decision," he explained. "It’s time to make a decision."
The med-tech industry’s Washington lobbies went into high gear as soon as the decision came down shortly after 10:00 a.m., issuing press releases reiterating their support for repealing the medical device tax.
"Today’s decision adds new urgency to repealing the medical device tax so that patients and providers can continue to expect innovative devices and technologies. While MDMA and our members still have seen no evidence or reports showing any ‘windfall’ for medical device companies as a result of the ACA, it is clear that this misguided policy has already led to job losses and cuts to research and development," according to Medical Device Manufacturers Assn. president Mark Leahey. "If the true goal of healthcare reform is to reduce costs and to improve patient care, then Congress and the president need to repeal the device tax so America’s medical technology innovators can continue to develop cutting edge products. Doing so will be a win-win for patients and jobs."
"We have consistently opposed the $29 billion medical device tax because of its damaging effects on economic competitiveness, jobs and the research and development needed to find tomorrow’s treatments and cures. The House has already voted to repeal the device tax, and we are heartened by the number of senators who have said they oppose the tax," added AdvaMed CEO Stephen Ubl. "We will continue to work with policymakers on both sides of the aisle to achieve this goal."
Medical device companies also issued statements on the ruling.
“We began planning for implementation of the measures in the Affordable Care Act long ago. We have been engaged in payment and delivery system reform changes that started before passage of the ACA in the private sector and that will continue," according to a statement from Medtronic (NYSE:MDT), as reported in the Minneapolis Star Tribune. "We remain committed to executing on our key strategies which will allow us to succeed in any environment."
"We believe that the medical device tax is misdirected policy," Bill Kolter, vice president of government affairs at Biomet, told the Indianapolis Star. "It is contrary to the government goal of promoting well paying jobs, American leadership in manufacturing and the promotion of technological advances that deliver cost effective care."