NCPA - National Center for Policy Analysis


September 17, 2009

The medical device industry is actively lobbying to remove or modify a provision in the Senate Finance Committee's health reform legislation that would require them to pay $40 billion in taxes over the next decade, according to the Wall Street Journal.

The taxes, which would be levied on a sliding scale depending on a company's market share, were included in the legislation after device makers did not provide the White House with a dollar amount in savings they would offer as part of reform, according to industry representatives and congressional aides.

  • The industry instead suggested that the federal government levy a tax on hospital-purchasing groups, who often are pitted against the medical device industry because they negotiate lower prices on supplies and some devices.
  • According to a letter from the Advanced Medical Technology Association to Senate Finance Committee Chair Max Baucus (D-Mont.), the proposal in the committee bill would assess all manufacturers at a rate based on U.S. sales needed to generate $4 billion annually starting next year.

Senate Finance Committee aides have said that the details of the tax are still under consideration.  Meanwhile, medical device companies are working and negotiating with senators and their staffs in crafting the legislation.  General Electric spokesperson Peter O'Toole said, "We're optimistic," adding, "We want to ensure patient access to these critical, lifesaving technologies is maintained."

Source: Alicia Mundy, "Medical-Device Makers Scramble to Avert New Fees in Health Bill," Wall Street Journal, September 15, 2009.


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