DOTmed Home MRI Oncology Ultrasound Molecular Imaging X-Ray Cardiology Health IT Business Affairs
News Home Parts & Service Operating Room CT Women's Health Proton Therapy Endoscopy HTMs Mobile Imaging
SEARCH
Current Location:
>
> This Story


Log in or Register to rate this News Story
Forward Printable StoryPrint Comment

 

 

Business Affairs Homepage

Medtronic in $1.6 billion deal for Mazor Robotics 'We believe robotic-assisted procedures are the future of spine surgery'

DOJ clears Cigna, Express Scripts deal The $52 billion mega-deal will move forward

Trimedx to acquire Aramark's health tech business for $300 million Expands reach to more than 500 healthcare providers

UPDATE: Agfa responds to acquisition interest from Kanteron Systems X-ray leader 'has decided not to engage in discussions' at this time

Johnson & Johnson acquires Emerging Implant Technologies GmbH Company aims to improve spinal fusion technology and outcomes

Dr. Charles Stacey Accreditation Council for Medical Affairs appoints Accera CEO to board of governors

Will Agfa-Gevaert be acquired by Kanteron Systems? Software company pitches buy, points to stagnant Agfa Healthcare revenue and synergies

Stryker to acquire Invuity for $7.40 per share in cash Develops tools to boost visualization during surgery

ScImage, Cardiac Imaging forge partnership Bringing 'anywhere, real-time' access to cardiology images

From technology newcomers to data-driven wearable devices: The US healthcare market is quickly evolving Factors for success when prevention is better than a cure

Researchers say device tax hurt investment in research and development

by Thomas Dworetzky , Contributing Reporter
A new Iowa State University study looking at data from 2006 and 2015 shows that firms have cut R&D thanks to the the Affordable Care Act's medical device tax.

"Highly advanced equipment in hospitals is a critical aspect of medical care," said Daeyong Lee, an assistant professor of human development and family studies at ISU. "Some devices, such as coronary stents, require high research investment. If medical device firms stop or reduce that investment, we won't have better equipment and devices for complicated surgeries or procedures."

Story Continues Below Advertisement

Source-Ray, Inc. - Innovations In Portable X-Ray

SRI is a leading Developer, Manufacturer & Supplier of Innovative Portable Imaging Equipment. We offer Lightweight, Agile, Easy to Maneuver Portable X-Ray Systems ideal for maneuvering in tight spaces. Call us at 631-244-8200



His study, which is appearing in the journal Research Policy, looked at the 2.3 percent excise tax imposed on medical devices in 2013.

“The medical device tax significantly reduced the R&D investment, sales revenues, gross margins, earnings, and return on equity for medical device manufacturing firms,” said Lee.

The cuts he found included:

-R&D expenditures - $34 million
-Sales revenue - $188 million
-Gross margins - $375 million
-Earnings - $68 million

His research looked first at the real cost to makers, but discovered that the tax also hit operating and marketing costs.

The tax is surprisingly broad, too. It doesn't just hit the high end, but is slapped on everything from needles and syringes to coronary stents, defibrillators and irradiation equipment -- although it does exempt hearing aids, eyeglasses and contact lenses.

Lee also looked at different ways to mitigate the tax impact for firms, including raising prices, which did not really happen, he said, because of the buying clout of the bigger consumers like large hospitals and clinics.

Instead of bumping up pricing, medical device makers have responded by spreading out their customer base and boosting international sales – which don't get hit with the tax.

“The device tax significantly increased their international sales revenue, international diversification, and customer diversification in the U.S. markets,” stated Lee.

Firms also slashed sales operating costs and general and administrative overhead, but continued to spend for advertising and labor.

The congressional appropriations act in 2015 had a two-year moratorium on the medical device excise tax. Then, in January, that was lengthened until 2020, at which time, industry leaders praised the decision.

“AdvaMed applauds passage of the two-year suspension of the medical device tax,” president and CEO Scott Whitaker of the Advanced Medical Technology Association said in a statement at the time. “This suspension is good news for American patients and American innovation. Congress' action – just days before medical technology innovators were set to start cutting checks to the IRS – means funds will not be diverted from current investments in jobs, capital improvements and research into new treatments and cures.”
  Pages: 1 - 2 >>

Business Affairs Homepage


You Must Be Logged In To Post A Comment

Advertise
Increase Your
Brand Awareness
Auctions + Private Sales
Get The
Best Price
Buy Equipment/Parts
Find The
Lowest Price
Daily News
Read The
Latest News
Directory
Browse All
DOTmed Users
Ethics on DOTmed
View Our
Ethics Program
Gold Parts Vendor Program
Receive PH
Requests
Gold Service Dealer Program
Receive RFP/PS
Requests
Healthcare Providers
See all
HCP Tools
Jobs/Training
Find/Fill
A Job
Parts Hunter +EasyPay
Get Parts
Quotes
Recently Certified
View Recently
Certified Users
Recently Rated
View Recently
Certified Users
Rental Central
Rent Equipment
For Less
Sell Equipment/Parts
Get The
Most Money
Service Technicians Forum
Find Help
And Advice
Simple RFP
Get Equipment
Quotes
Virtual Trade Show
Find Service
For Equipment
Access and use of this site is subject to the terms and conditions of our LEGAL NOTICE & PRIVACY NOTICE
Property of and Proprietary to DOTmed.com, Inc. Copyright ©2001-2018 DOTmed.com, Inc.
ALL RIGHTS RESERVED