Posted: 11/17/14 06:36
by Dave Mindeman
In the Star Tribune there is an Op-Ed about the Medical Device Tax from an industry investor....
Ron Way, of Edina, is an investor representative on the boards of five medical start-ups.
The points he makes are the same points this blog and others have been making for some time....
While previous repeal attempts have failed, this time the repeal forces -- including Minnesota Democratic Sens. Amy Klobuchar and Al Franken and Republican Rep. Erik Paulsen -- will gain important leverage as leaders of the incoming Republican majority look for ways to emasculate the ACA But repealing the tax would amount to coddling a wealthy special interest at the expense of those least able to pay for health care.
(Bold emphasis is mine).
Oh, so true. And Mr. Way also gets to the heart of the repeal arguments:
1. "The tax will cause the export of 42,000 jobs," says the industry. But a Bloomberg analysis found the claim "not credible." The reality is that there's zero incentive to ship jobs overseas because the tax applies only to domestic sales and imports but not to exports, which are half of the estimated $110 billion in annual medtech revenue.
2. "The tax will increase device cost." The same Bloomberg analysis and the nonpartisan Congressional Research Service said that the tax is too small to affect demand and that consumers will scarcely notice.
3. "The tax will suppress research and development." Hardly. Every credible analysis shows that the ACA will increase demand, which is strong incentive to develop better, less costly devices. Indeed, there already is increased research and development (R&D) investment in companies and in small start-ups where much innovation occurs.
As usual, the "onerous" medical device tax has not been the industry problem that repeal opponents have predicted with such "certainty".
Will our Congressional delegation listen to the other side? I doubt it. The lobbyists always seem to win out in the end.
Mr. Way concludes with the reality....
In the 20 months that the tax has been in place, the financial calamity predicted by the industry has not happened. Simply, there's no credible basis for repealing the tax.