Medical-Device Industry Urges Repeal of Excise Tax
July 18 2011 - 4:36PM
Dow Jones News
More than 400 companies in a letter Monday urged Congress to
repeal a $20 billion medical-device tax scheduled to go into effect
in 2013.
Over 400 health-care companies, venture capital firms and other
associated organizations, including Boston Scientific Corp. (BSX),
Kimberly-Clark Corp. (KMB)'s health-care unit and the National
Association of Manufacturers, pushed for the repeal of a 2.3%
excise tax on medical-device manufacturers. The tax is designed to
help offset the cost of the health-care overhaul Congress passed in
2010.
"We believe that implementation of this $20 billion excise tax
will adversely impact patient care and innovation, and will
substantially increase the costs of health care," the coalition
wrote Monday in two identical letters to the top lawmakers in both
the House and Senate.
Congress passed the fee on medical device makers to help pay for
the health-care overhaul's expansion of coverage. The excise tax,
which requires manufacturers to pay a tax of 2.3% of a product's
gross sale price, is expected to raise $20 billion over 10 years.
An earlier version of the tax was intended to raise $40 billion
over 10 years, but was slashed in half following aggressive
lobbying from the industry.
Now the Advanced Medical Technology Association, the main trade
organization for the medical-device industry, is helping lead an
effort to repeal the tax. The joint letter sent Monday argues that
the fees will cut companies' budgets for research and development
and hiring, and could lead to higher health-care costs.
"If this tax is implemented in 2013, it will undermine our
industry's ability to create and maintain good jobs in the U.S.,
and worse, will lead to higher costs for patients, undercutting one
of the primary goals of health care reform," the trade group's
president and chief executive, Stephen J. Ubl, said in a statement
Monday.
Sen. Orrin Hatch (R., Utah), the top Republican on the Senate
Finance Committee, in January introduced a bill that would repeal
the excise tax.
-By Kristina Peterson, Dow Jones Newswires; 347-882-7215;
kristina.peterson@dowjones.com
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