US Sen. Max Baucus, (D-Mont.), chairman of the Senate Finance Committee, released his health care proposal Wednesday morning.
Local orthopedic companies are voicing their displeasure.
Under Baucus's proposal, makers of medical devices would be taxed $4 billion a year as an industry. Each company's payout would be based on their share of the market.With Zimmer, Biomet and DePuy's world headquarters in Warsaw, there was local reaction to the proposal.
Both Zimmer and Biomet made comments while DePuy directed the Times-Union to Advamed, the trade association that represents medical device manufacturers among other entities. A call to a representative from Advamed wasn't returned as of this morning.
Brad Bishop, director of public affairs for Zimmer, released a statement to the Times-Union this morning that read, in part: "We have vigorously opposed the proposed Baucus device tax since it was announced last week and will continue to do so. We believe the tax unfairly targets an industry that improves the health of patients, allowing them to return to productive lives or avoid other costly medical conditions."
The statement also noted the tax would hurt Warsaw as one-third of the world's orthopedic device market is headquartered in the area.
"Our company alone employs approximately 2,800 workers in Warsaw. Across Indiana, there are approximately 300 medical device companies, both large and small, that provide jobs for 18,500 Hoosiers directly and for another 76,000 indirectly. This tax would compel such companies to consider investing less in the research and development that drives innovative new products and in future manufacturing expansions."
Bill Kolter, corporate vice president of Biomet, echoed the statements of Zimmer.
"Our position is that this is a tax on innovation," said Kolter this morning. "It increases the cost of products used in health care."
Kolter said he was unaware of any time a tax helped lower the cost of a product.
"This is really counter to the efforts of health care reform," said Kolter. "This hurts companies that can help in improving the quality of life."
Both Indiana senators, Evan Bayh and Dick Lugar, have come out publicly to oppose the tax, and Zimmer noted the senators' efforts to remove the tax from the health care bill.
The bill states the companies would have to send a report of its domestic sales for the prior calendar year to the Secretary of the Treasury who would then determine how much tax each company would have to pay.
The bill also mandates medical device manufacturers to annually report payments to or transactions with doctors, private practices or hospitals to the department of Health and Human Services.
Companies also would have to report any physicians who hold stock or have interest in the company.
Both Kolter and Bishop said that, in general, their companies support transparency but couldn't comment specifically on the details of Baucus' bill because they hadn't had a chance to go over the 223-page document.
