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InsiderOnline Blog: November 2012

ObamaCare’s Medical Device Tax Is Already Killing Jobs and Innovation

… reports Quinn Hillyer:

The president's health law imposes a 2.3% tax on all medical device sales. This doesn't sound like much, but that's misleading. The tax is not on profits, but on gross (total) receipts. For smaller device manufacturers with narrow profit margins, the tax could actually exceed their profits, pushing them into the red. Such is the case with companies known as ConMed (with possible job losses in swing states Colorado and Florida), Symmetry Medical (job centers in swing states Michigan and New Hampshire), and ultrasound pioneer Sinosite.

Some medical-device makers, such as Stryker (headquarters: Kalamazoo, Michigan) and Zimmer Holdings (job locations in Nevada, Minnesota, Ohio, and Pennsylvania), already have announced layoffs (1,000 and 450, respectively) as a result of the tax.

In all, some 43,000 jobs could be lost due to the tax, according to a widely-cited, but industry-funded study. Another report, out just two weeks ago, showed venture capital fleeing the medical device industry, presumably in response to the new ObamaCare tax. Such investment is down for the third straight quarter, to levels as low as in 2004. [USA Today, November 3]

Posted on 11/07/12 05:30 PM by Alex Adrianson

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