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CEO Corner: The Looming Excise Tax on Medical Devices

Commentary from CEO Shawn Regan

August 2011

I wanted to talk a bit about the looming 2.3% excise tax on medical devices.Part of President Obama's healthcare reform bill (i.e. the Affordable Care Act) includes a 2.3% excise tax on sales of most medical products.This tax is scheduled to take effect in 2013 and is widely regarded by medical device industry groups and companies as detrimental to innovation, patient care and job creation. It is feared that this will be particularly harmful to start-up and early stage medical device companies who will be taxed regardless of whether or not they generate a profit thus stifling job creation and innovation from the very companies which create the majority of jobs and innovation within healthcare. It will also likely raise the prices of many or all the medical device products you currently purchase as companies pass the tax off to consumers and patients.

For a more in-depth summary on how the tax can affect you read this article in Forbes written by Sally C. Pipes.

Nearly a year later Shawn revisited the topic to add this -

"In the Fall of 2011 I discussed the Affordable Care Act and how that will affect medical device manufacturers and ultimately patients and their care givers. In June (2011), the Supreme Court voted to uphold the individual mandate requiring Americans to buy health insurance or pay a tax which means that much of the proposed plan will go into effect. This virtually guarantees that the 2.3% excise tax on all medical device sales within the US will go into effect starting on January 1, 2013. I remain hopeful that eventually this part of the Affordable Care Act will be repealed or highly modified to avoid increasing health care costs, stifling innovation and ultimately leading to a loss of jobs. However, a change this late in the game isn't likely and at Rhythmlink we've been preparing to handle the additional regulatory and compliance requirements beginning January 1, 2013."

To read his latest comments on the subject check out the CEO Corner of our latest Pulse.


quip.comments (1)

  1. Whitney McCormac:
    Jan 17, 2017 at 02:57 PM

    great post!


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