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Medical device tax, the UDI and other capital equipment challenges: Q&A with Siemens' David Fisher

by Brendon Nafziger, DOTmed News Associate Editor | December 10, 2012
David Fisher (Photo courtesy of Siemens)
An old Chinese curse says, "May you live in interesting times." For companies that make capital medical equipment, times sure are interesting.

The medical device excise tax, the unique device identifier rule, global economic woes, a U.S. health care market moving towards value-based purchasing — it all means the industry has a lot of changes to face in the coming years.

At the Radiological Society of North America's annual meeting in Chicago in late November, DOTmed News sat down with David Fisher to talk about some of these changes. Fisher knows his way around the medical imaging OEMs. He was formerly the executive director of the Medical Imaging & Technology Alliance, a trade lobby for manufacturers. He stepped down to become vice president of health care policy and strategy at Siemens Healthcare, an appointment that was made in February. What follows is an edited version of our talk.

DOTmed News: For medical device companies, the big policy question is the 2.3 percent excise tax on device sales that goes into effect next year. What's the outlook on that?

Fisher: We're preparing like we're going to be writing checks in the beginning of January to the government to pay our taxes, but in reality we don't even know what the rules are. [Editor's note: The final rules were released more than a week after our talk.] It's going to take some time for us to modify our systems once we get those rules in order to accurately pay our taxes. In our view there needs to be a delay. It's not responsible government to put a rule out in December, if that's what happens, and enforce a tax 30 days later.

What is the sort of political climate around delaying or repealing the tax?

You saw, I'm sure, over the summer, there was a strong bipartisan vote to repeal the tax. I think 30 some Democrats supported it in the House. [Editor's note: The House of Representatives voted 270-146 to repeal the tax on June 7, but the bill never got voted on in the Senate.] I think it's an uphill battle. In the scheme of the fiscal cliff this is small time, and I think at this point we would be happy with good government, which is a responsible delay to allow us to actually read the rule and implement it effectively, appropriately, so that we know we're actually paying the taxes.

Does Siemens know what sort of hit you'll take from the tax?

We have an idea based on the proposed rules, but we don't know exactly. It's substantial.

The proposed unique device identifier rules were also released this year. For those who don't know, this will create a public database and new labels for medical devices to better track them through the supply chain. How is Siemens preparing for that? What are your thoughts on that?

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