• The medical device tax needs to stay

    Michael Hiltzik’s article in the LA Times doesn’t pull any punches:

    But you’d be hard-pressed to find a campaign against the ACA as narrow-minded and dishonest as the one mounted by medical device manufacturers.

    This campaign has been largely a data-free zone:

    The industry can’t cite a single objective study that supports its contentions that the tax will suppress innovation in the field and make U.S. manufacturers globally uncompetitive.

    Worth reading the entire thing.


    • Given how much in federal support goes towards research including that for medical device development, a tax is akin to a windfall profits tax given the IP rights enjoyed by device manufacturers.

    • The medical device industry is hugely, scandalously profitable, an industry that is funded in large part by the government. Of course, the same could be said about sectors in the health care industry, including physicians, hospitals, and insurers; indeed, the giant sucking sound you hear is that part of national income being consumed by the health care industry. So why single out the medical device sector? One, a big part of the rise in health care spending is attributable to very costly medical devices. Two, the medical device manufacturers are not innocent: it’s common business practice for the manufactures to have questionable business arrangements with physicians, arrangements that pay millions upon millions to physicians who use the manufacturers’ products the cost of which is paid for by somebody else. Indeed, the other ACA provision that targeted the medical device industry, the requirement for the industry to disclose the (questionable) business arrangements with physicians, will likely cost the industry more than the tax. Trial lawyers are anxiously waiting to mine the data and identify easy targets for qui tam lawsuits.

    • Device companies avoid doing trials by claiming new devices are “substantially equivalent” to prior devices, and then go out and market them as revolutionary advances. Its an industry shot full of dishonesty and greed.