Local Orthopedic Firms React To Health Care Bill
July 28, 2016 at 4:25 p.m.
By Daniel [email protected]
Once Senate democrats get a majority vote, which may be as early as today barring any procedural delays, the bill will become law and it will provide insurance to around 30 million Americans.
But the $940 billion bill will cause a new tax for medical device manufacturers.[[In-content Ad]]That includes the "Big Three" local orthopedic manufacturers.
Though a change to the bill Saturday lowered the tax on companies like Biomet, DePuy and Zimmer, a 2.3 percent tax will now apply to all Class I, II and III devices.
The 2.9 percent tax rate would have only included Class II and III devices.
The tax would hit those companies' books starting Jan. 1, 2013.
The result of the tax would result in roughly $20 billion in taxes on the medical device industry by 2019.
That is a change from earlier drafts of the bill that would have put a $40 billion tax on the industry starting this year.
Despite the decrease, the tax remains an issue for local orthopedic companies.
"I think at the end of the day, the excise tax reduces the ability of medical device companies to spend money on discretionary spending," said Bill Kolter, vice president of government affairs, public affairs and corporate communciations with Biomet. "That could have an effect on things like (research and development) and employment."
Kolter said Biomet will take a look at all of its discretionary spending if and when the tax comes into effect in 2013.
"The orthopedic industry is a great example of an industry of innovation and leaderships," said Kolter. "It provides economic benefits for the health care system."
In a statement released this morning, Brad Bishop, director of public affairs with Zimmer, gave his company's reaction.
"We applaud expanded insurance coverage for millions of Americans. Now that the House has passed the Senate reform bill and a separate, companion bill that modifies the Senate bill, we will monitor progress in the Senate and engage with our Congressional contacts as appropriate.
"While we continue to disagree with a tax on medical technology innovations, we are pleased that the House refrained from increasing the $20 billion device industry tax. We are also pleased that the House ultimately agreed to reduce the governing tax rate from 2.9 percent to 2.3 percent and to change the Senate fee structure to a deductible excise tax that will be delayed two years to 2013."
Bishop also laid out Zimmer's interests in terms of health care.
"Broadly speaking, our main interests with respect to any health care reform bill continue to be:
"n To protect patient access to the most effective technologies and treatments;
"n To preserve the financial incentives that will continue to spur medical innovation that leads to better treatments and care for patients;
"n To make sure medical care will continue to be determined by health care professionals in consultation with patients; and
"n To ensure that reimbursement for procedures will appropriately reflect the clinical and economic benefits of medical technology including our implantable devices."
Once Senate democrats get a majority vote, which may be as early as today barring any procedural delays, the bill will become law and it will provide insurance to around 30 million Americans.
But the $940 billion bill will cause a new tax for medical device manufacturers.[[In-content Ad]]That includes the "Big Three" local orthopedic manufacturers.
Though a change to the bill Saturday lowered the tax on companies like Biomet, DePuy and Zimmer, a 2.3 percent tax will now apply to all Class I, II and III devices.
The 2.9 percent tax rate would have only included Class II and III devices.
The tax would hit those companies' books starting Jan. 1, 2013.
The result of the tax would result in roughly $20 billion in taxes on the medical device industry by 2019.
That is a change from earlier drafts of the bill that would have put a $40 billion tax on the industry starting this year.
Despite the decrease, the tax remains an issue for local orthopedic companies.
"I think at the end of the day, the excise tax reduces the ability of medical device companies to spend money on discretionary spending," said Bill Kolter, vice president of government affairs, public affairs and corporate communciations with Biomet. "That could have an effect on things like (research and development) and employment."
Kolter said Biomet will take a look at all of its discretionary spending if and when the tax comes into effect in 2013.
"The orthopedic industry is a great example of an industry of innovation and leaderships," said Kolter. "It provides economic benefits for the health care system."
In a statement released this morning, Brad Bishop, director of public affairs with Zimmer, gave his company's reaction.
"We applaud expanded insurance coverage for millions of Americans. Now that the House has passed the Senate reform bill and a separate, companion bill that modifies the Senate bill, we will monitor progress in the Senate and engage with our Congressional contacts as appropriate.
"While we continue to disagree with a tax on medical technology innovations, we are pleased that the House refrained from increasing the $20 billion device industry tax. We are also pleased that the House ultimately agreed to reduce the governing tax rate from 2.9 percent to 2.3 percent and to change the Senate fee structure to a deductible excise tax that will be delayed two years to 2013."
Bishop also laid out Zimmer's interests in terms of health care.
"Broadly speaking, our main interests with respect to any health care reform bill continue to be:
"n To protect patient access to the most effective technologies and treatments;
"n To preserve the financial incentives that will continue to spur medical innovation that leads to better treatments and care for patients;
"n To make sure medical care will continue to be determined by health care professionals in consultation with patients; and
"n To ensure that reimbursement for procedures will appropriately reflect the clinical and economic benefits of medical technology including our implantable devices."
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