Thursday, March 25, 2010

Sen. Scott Brown moves to repeal medical device tax

Via Mass Device,
Sen. Scott Brown (R-Mass.) is apparently heeding the call of his medical device constituents, who are none too pleased about a new tax on the industry signed into law yesterday by President Barack Obama.

Brown is co-sponsoring an amendment with Sen. Pat Roberts (R-Kan.) to immediately repeal the medical device excise tax.

The levy, a 2.3 percent excise tax on sales of everything from bed pans to stents, was part of the landmark healthcare reform act passed by the U.S. House of Representatives March 21 and signed into law by Obama March 23.

Brown, in a statement condemning the bill, called it a "jobs-killing" tax that will only be passed on to consumers.

"With unemployment in my state near 10 percent, placing a tax on medical devices is the absolute last thing we should be doing right now," Brown said. "This tax will burden employers and cost jobs at a time we cannot afford one more job being lost. We should be adopting policies that put people back to work — not policies that will cause Americans, and hard-working families in my state, to lose good-paying jobs."

Brown owes at least some of his meteoric rise to the support of the medical device industry. In a widely publicized January tour of Zoll Medical Corp. (NSDQ:ZOLL) that attracted a throng of national reporters, he told MassDevice that he would "stop the healthcare bill" if elected. It was a promise that the Massachusetts Medical Device Industry Council has tried to hold him to, issuing an open letter immediately after the election calling for him to stick to his guns.

According to a MassDevice poll, the healthcare reform bill is desperately unpopular in medical technology circles, with more than 50 percent of respondents saying they "hate the bill."

An analysis of the tax's impact on 58 medical device firms also shows that the 10 largest medical device makers would have generated 86 percent of the $1.87 billion in excise taxes last year, had the healthcare reform law been in effect, with many smaller firms suffering substantial hits to their bottom lines and three pushed from black to red ink.

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