Forbes: Device Tax Will Raise Prices, Harm Innovation, Send Jobs Abroad

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The healthcare reform law's tax on medical devices, scheduled to go into effect in 2013, will raise prices, restrict research spending and send manufacturing abroad, according to an opinion piece in Forbes.


The Internal Revenue Service is set to release regulations on the 2.3 percent tax on medical device companies this summer, according to Forbes writer Sally C. Pipes. She urged Congress to repeal the tax.

 

Although the new device tax is projected to generate $20 billion over the next decade, it is expected to drive up healthcare costs. The chief actuary for Medicare and Medicaid estimated the device tax and similar levies on prescription drugs and insurance plans would raise national healthcare spending by as much as $18.2 billion in 2018 and $17.8 billion in 2019.

 

The tax would also hamper costly research and development of new devices. It takes $31 million to bring a low-risk medical device through the approval process and into the marketplace.

 

Some device-makers appear to be moving operations abroad to avoid the tax. China's medical device industry grew 15 percent last year, making it the fourth-largest worldwide in terms of revenue.

 

Read the Forbes report on medical devices.

 

Related Articles on the Medical Device Tax:

Medical Device Industry Hopes Intense Lobbying Will Overturn Excise Tax

Letter Shows Concern Device Tax Could Be Passed on to Hospitals

Proposed Legislation Seeks to Repeal Tax on Medical Device Company

 

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