KILLING
MEDICAL DEVICE TAX TO HELP SMALL BUSINESSES |
On
7 June 2012 The U.S. House of Representatives voted to
repeal the 2.3 percent tax on medical devices that is parts
of President Barack Obama's healthcare law.
H.R. 436, “Health Care Cost Reduction Act of 2012”
received bipartisan support in the House and will now go to
the Senate.
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The
2.3 percent excise tax is scheduled to take effect in 2013.
It applies to the sale of medical devices by manufacturers
and importers. |
Industry association
such as the
Medical Device
Manufacturers Association (MDMA) and
Advanced Medical Technology Association (AdvaMed)
applauds the House passage of legislation to repeal the
medical device tax. According to AdvaMed this would amount
to a $30 billion excise tax on the medical device industry.
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There were approximately 5,300 medical device companies in
the U.S. in 2007, mostly small and medium-sized enterprises
(SMEs). In 2007, approximately 73 percent of medical device
companies had fewer than 20 employees, with 15% having as
many as 100 employees. The industry employed more than
365,000 people in the U.S. |
Medical device
companies are located throughout the country, but are mainly
concentrated in specific regions known for other
high-technology industries, such as microelectronics and
biotechnology. The states with the highest number of
medical device companies include California, Florida, New
York, Pennsylvania, Michigan, Massachusetts, Illinois,
Minnesota and Georgia. |
This is an industry
with high R&D investment. It is more than twice the average
for all U.S. manufacturers overall. |
The largest markets
for medical devices are the U.S. (which constitutes about
half the world market), EU, Japan, Canada, China, Brazil,
Taiwan, Korea and Australia. |
U.S. medical device manufacturers are the largest producers
in the world for medical devices. However, continued
shifts in trade patterns have resulted in China emerging as
a significant export of lower tech equipment and supplies to
the U.S. The U.S. is now importing more medical devices
than it is exported. Additionally, many countries still
maintain high tariffs on some medical products that results
in reduce net sale price of medical devices. |
Sources:
Medical Device Industry
Assessment
H.R. 436
By
Tim Miller
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