Last month, the U.S. House of Representatives passed H.R. 160 to repeal the 2.3% medical device excise tax passed as a part of the healthcare reform platform enacted by the Obama administration. The U.S. medical device industry is hopeful that reform of this tax might remove the inherent limits on R&D spending that were a natural evolution of the initial tax that was passed.
The effect of the tax is far-reaching and significant. Payments for major medical device firms are as high as $180M (Johnson & Johnson) and as low as $3.5M (CR Bard). While the amount that each company pays varies based on the types of devices they produce (some devices such as wheelchairs are exempt), the ongoing liability to tax paying companies is still generated by devices that incur significant R&D costs.
Source: NJ.com
