The reason the government is slapping a 2.3 percent tax on medical device makers in 2013 is supposedly in exchange for the millions of patients that will come into the healthcare system as a result of the Patient Protection and Affordable Care Act.
But almost 100 percent of the companies surveyed saw no “windfall,” according to a report from an Orange County, Calif., investment bank that “pokes holes in the rationale
that healthcare reform will be a boon to medical device companies.”
The report from Roth Capital Partners centered on the performance of 9 medical device companies in Massachusetts, where the universal healthcare law passed in 2006 serves as a primer for national healthcare reform, Mass Device pointed out.
Eight out of the nine companies in the analysis did not see any sign of a windfall when universal healthcare was implemented in Massachusetts. “Even more striking, most saw relative under-performance in this state," said the report.
In June Republicans tried to ram through a bill in the House to remove the tax, not yet law, but were cut down by the Senate. Democrats say the growing medical device industry can easily afford the 2.3 percent tax, Alan Fram reported. “They describe the tax as part of the price device manufacturers and other providers agreed to pay in exchange for the tens of millions of new customers they will get through the sweeping 2010 health care law's expansion of health insurance coverage.”
The tax is expected to raise $20 billion over a course of 10 years to help pay for health care reform, according to healthsciencetechnology.wikispaces.com.
Medical device companies have recently been under the gun for going for – and attaining – FDA approval of items that had not been tested in humans. Devices are now cleared through the 510 (k) process, which most healthcare providers feel is seriously flawed. The process approves new devices if they are "substantially equivalent" to devices already on the market, some of which may already have injured patients.
Tony Saavedra and Courtney Perkes revealed that medical device manufacturers defend the 510 (k) process, saying less than one percent of the estimated 3,000 to 4,000 devices cleared each year are recalled because of concerns about death or serious injury. But those that are cause appalling harm, like the vaginal mesh implants that caused 4,000 cases of serious injury and three deaths, and coated heart stents that have had a failure rate of 15 to 30 percent, both approved by the FDA.
To begin to address this, legislation introduced in February, H.R. 3847, asked that lawmakers finally stop pushing through medical devices for approval by requiring that even revisions of failed products must go through the process again. And the FDA itself this summer proposed a unique device identifier system for medical devices to correct this, once and for all.
Edited by
Amanda Ciccatelli
