There has been much debate regarding how the proposed 2.3% medical device tax will harm the industry. There have been arguments that the increased levy will push jobs and trials overseas, there also has been much talk over the hidden costs in the Medical Device Tax. Overall there has been a consistent message linked to articles we’ve read about the tax- claims this will cost jobs and slow industry innovation.
- The medical device industry uses the argument about potential job loss to keep attention away from great margins
- Industry pricing structure is opaque and it would be impossible for economist to determine who will actually pays the tax
- The industry’s best-selling products are minor variations of earlier products, which can be sold at higher prices because the companies claim they are substantially better than earlier versions
The article points out that “the industry is one of the most profitable in America, racking up an estimated $40 billion in earnings on $130 billion in sales last year.” This is a tremendous profit! Those that oppose the tax believe the tax will take money out of the public and give it to rich companies. But is this true? Or are those in opposition using the old smoke and mirrors routine?
Do you think device firms are using the argument that a 2.3% tax will damage the industry to distract attention from an opaque pricing structure that many claim are increasing health care costs? Share your thoughts and concerns below.
Photo Credit: 401K 2012