The medical device industry’s lobbying push to scale back a proposed 10-year, $40 billion tax is coming down to the wire, as a vote on the Senate Finance Committee’s healthcare reform bill nears.
The industry’s Washington mouthpiece, AdvaMed, wants the $4 billion-per-year proposal pared to just $1.5 billion a year, according to the Wall Street Journal (paid), an offer that is probably not enough to mollify the panel’s chairman, Sen. Max Baucus (D-Mont.), and other Democrats on the committee.
AdvaMed spokeswoman Wanda Moebius told the Journal reports of the counter-offer are mere “rumors and speculation,” but with a final Finance Committee vote on track for as early as Oct. 6 and a hearing on the full Senate Floor possible the following week, time is running out for the industry to convince lawmakers that the tax as originally proposed is just to large to swallow.
“AdvaMed continues to work with members of Congress to educate them of the onerous nature of this $4 billion tax — nearly half of the total of the industry’s research and development investment in 2007,” Moebius told the newspaper.
That effort has apparently gained traction with some legislators, according to the Washington Post.
A bloc of senators from both sides of the aisle is lobbying Senate majority leader Harry Reid (D.-Nev.) to lift the fees, the Post reported, and California’s senators added their two cents to their House counterparts in a letter to Baucus.
“We are concerned that this excise tax will have a disproportionate impact on California, and result in additional lost jobs in the middle of an already severe economic downturn,” wrote Democratic Sens. Dianne Feinstein and Barbara Boxer.
And twenty other Democratic representatives from Alabama, Georgia, Indiana, Iowa, Minnesota, New Mexico, New York, North Carolina, Ohio, Pennsylvania and Tennessee sent a missive to House speaker Nancy Pelosi (D.-Calif.) and majority leader Steny Hoyer (D-Md.), expressing similar sentiments.
“We are extremely concerned that this tax would harm our district’s economies, impede innovation, and ultimately deny access to life-saving medical devices for patients,” they wrote (see below for a list of signees).
On the industry side, the CEOs of three major device makers — Ed Ludwig of Becton, Dickinson & Co., Stryker Corp.’s Steve MacMillan and Tim Ring of C.R. Bard — wrote an op-ed piece in the Bergen (N.J.) Record claiming that the tax could force plant closures and layoffs for some device makers.
“Unfortunately, the Senate Finance Committee’s proposed $40 billion tax ($4 billion per year for 10 years) on medical device and diagnostics products would have an immediate and profoundly negative impact on patient outcomes as well as damage the economies of many states,” the trio wrote. “[T]his new tax would result in the loss of numerous jobs and could lead to the scale-back, or even closing, of medical technology facilities. … Ultimately, patients will suffer greatly.”
There’s debate over just about every aspect of healthcare reform, even within the committee’s Democratic ranks, let alone among Dems in the full Senate and the sometimes rancorous conflict between Democrats and Republicans in both houses of Congress.
Two Finance Committee Democrats, Sens. Ron Wyden (D-Ore.) and John D. Rockefeller IV (D-W.Va.), refused to sign on to the so-called “Baucus bill,” citing concerns over its cost to average Americans and the absence of a “single payer,” government-run insurance option, according to the Post.
“More needs to be done to hold insurance companies accountable, to hold premiums down for the American people,” Wyden told the Post. “I want to continue these discussions.”
As for Rockefeller, he and other fans of the public option in the Senate and House (which passed a healthcare reform bill containing provisions for a single-payer system) will fight for its inclusion in whatever final bill makes it to Pres. Barack Obama’s desk, according to the newspaper.
Massachusetts Democratic Sen. John Kerry, meanwhile, wants most businesses to cover a portion of their employees’ medical costs, citing the Bay State’s “employer mandate.” Bills out of the House and the Senate Health, Education, Labor and Pensions Committee both include employer mandates.
Support for a tax on device makers reaches as high as the White House, according to the Journal, and it seems that the industry did itself no favors with a proposal to tax hospitals and medical device distributors instead.
That drew unfavorable comparisons to the pharmaceutical and hospital lobbies, which separately offered a total of $235 billion in concessions earlier this summer to help pay the nearly $900 billion tab for healthcare reform.
And a deal could still be struck before the final Finance Committee poll, according to the Journal. Senators and governors from states with large medical device manufacturing clusters, including California, Minnesota Nevada, Indiana and Utah, have urged Baucus to ease the financial burden on the industry.
The headline-grabbing healthcare reform debate is cast against an increasingly positive backdrop for the health industry as a whole, which has added 300,000 jobs over the past year, even as the general economy shed about 6 million jobs. About 19,000 new healthcare jobs were added during September, according to the Wall Street Journal‘s Health Blog.
For medical device makers, the upshot is more jobs and growth for its end-users: doctors and hospitals.
Hospitals added 4,600 jobs in September alone, while doctors’ offices and nursing-care facilities tacked on a total of $5,500.
Signatories of the letter to Reps. Pelosi and Hoyer
- Jason Altmire, D-Pa.
- Michael Arcuri, D-N.Y.
- John Barrow, D-Ga.
- John Boccieri, D-Ohio
- Leonard Boswell, D-Iowa
- G.K. Butterfield, D-N.C.
- Andre Carson, D-Ind.
- Steve Cohen, D-Tenn.
- Lincoln Davis, D-Tenn.
- Joe Donnelly, D-Ind.
- Steve Driehaus, D-Ohio
- Brad Ellsworth, D-Ind.
- Parker Griffith, D-Ala.
- Martin Heinrich, D-N.M.
- Baron Hill, D-Ind.
- Daniel Maffei, D-N.Y.
- Michael McMahon, D-N.Y.
- Scott Murphy, D-N.Y.
- Zachary Space, D-Ohio
- Timothy Walz, D-Minn.