Michael Weinstein was right.
Last month, the JP Morgan & Chase analyst predicted that a 10-year, $40 billion tax on medical device makers proposed to help pay for healthcare reform would be cut in half.
New bills in the House and Senate would do just that, paring the device industry’s nut to $20 billion, according to the Wall Street Journal.
The Senate bill currenly being cobbled together by majority leader Harry Reid (D-Nev.) is expected to call for between $15 billion and $20 billion from the industry over 10 years, the Journal reported. That’s a far cry from the $40 billion levied by a bill passed by the Senate Finance Committee earlier in October.
The House version differs from the Senate’s proposals, which would set the tax rate based on companies’ prior-year market share. The House proposal is a point-of-sale excise tax, set to generate $20 billion total between 2013 and 2019.
That would shift some of the burden to wholesalers and distributors that sell cheaper devices. The tax would be exempted for retail products, unlike the Senate version that carried an exemption only for retail devices sold for less than $100.