Excise Tax Threatens Medical Device Industry
Posted by Michael E. Marotta on 12/20, 7:58am

A special tax has been levied on makers of cardiac pacemakers, cardiac stints, and artificial joints,ultrasound and x-ray machines to pay for the Patient Protection and Affordable Care Act (PPACA), commonly called Obamacare.

From the Forbes article:
The medical device industry is being ravaged by unwise public policy, including a devastating 2.3% excise tax scheduled to go into effect on Jan 1 as part of ObamaCare. This tax is especially pernicious because it is assessed on sales, not profits. To put this in perspective, imagine that you’re a manufacturer of medical devices and had a profit of $100,000 on sales of $1 million after all your costs and expenses—everything from materials and labor to research. The excise tax would be $23,000, wiping out almost a quarter of your profits.

"Medical devices range from simple tongue depressors and bedpans to complex programmable pacemakers with micro-chip technology and laser surgical devices. In addition, medical devices include in vitro diagnostic products, such as general purpose lab equipment, reagents, and test kits, which may include monoclonal antibody technology. Certain electronic radiation emitting products with medical application and claims meet the definition of medical device. Examples include diagnostic ultrasound products, x-ray machines and medical lasers." FDA Website here.

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