Category Archives: Advocacy and Regulations

BioCentury This Week: On The Brink of Disunioun

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When President Obama delivers the State of the Union address on Tuesday, he’ll be speaking to a polarized Congress where brinksmanship is the order of the day.  If lawmakers don’t act by March 1, budget sequestration will slash funding for biomedical research and oversight of the nation’s food and drug products. Continue reading→

Moving Up The Ranks

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Over the last decade, Arizona’s bioscience sector has made amazing progress in building foundational infrastructure for research and discovery in the life science sector.  This next decade of focused collaboration is  our opportunity to move up the ranks and along the path from Discovery to Development to Delivery. Continue reading→

IRS Issues Final Medical Device Regulations

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The Internal Revenue Service today released the final regulations on the Medical Device Tax which will go into effect in January of 2013 unless it is repealed between now and the end of the calendar year.

Industry groups from across the country have been actively working with both the IRS and with Congress to share with them the far reaching impacts that the tax will  have on both new innovations and currrent products developed and/or manufactured on shore.

In a report earlier today,  of Fierce Biotechg shared: that the agency is adopting very few of the suggested changes to the law’s major  provisions.

“The final regulations do not adopt this suggestion.” That’s a phrase you get  used to when reading the IRS’s 58-page document on the 2.3% tax. Commenters had  asked for exceptions for devices with medical and non-medical uses, more  specific definitions of “taxable medical devices” and provisions that would  account for a device’s pricing before applying the tax, among other things.

All of these were weighed, debated and ultimately rejected by the IRS, which  by and large affirmed its last guidance, something we covered  in detail last month. In sum, that leaves a 2.3% tax on medical devices as  defined by the FDA,  with exemptions for devices that are sold directly to consumers, destined for  further manufacture or slated to be sold outside the U.S. (Source:  IRS pays little mind to industry feedback in final device tax regs – FierceMedicalDevices )

The new IRS regulations cover 58 pages.  To download a copy, please click here:  Medical Device Tax Final Rules 2012-29628_PI

 

Leaders in the Innovation Economy Reach out to Senate Leadership on Medical Device Tax Repeal

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Leaders from over 800 organiztions and companies focused on grwoing our econony and supporting medical device innovation sent a letter to Senate leadership this today calling for repeal of the medical device tax.

The letter included three important reasons to suport repeal:

    • The tax will stifle innovation and cost thousands of high-paying jobs. It will increase the effective tax rate for many medical technology companies, thereby reducing financial resources that should be used for R&D, clinical trials and investments in manufacturing. The impact will be especially hard on smaller companies whose innovations are not immediately profitable.
    • The tax will increase health care costs as confirmed by a report issued in April 2010 by the Office of the Actuary at the Centers for Medicare and Medicaid Services (CMS). In some cases, the 2.3% tax will be passed on to consumers, leading to higher health care costs.
    • The tax will not be offset by increased demand for medical devices. In fact, it is important to note that there is no evidence suggesting a device industry “windfall” from healthcare reform. Unlike other industries that may benefit from expanded coverage, the majority of device-intensive medical procedures are performed on patients that are older and already have private insurance or Medicare coverage. Where states have dramatically extended health coverage, such as in Massachusetts where they added 400,000 new covered lives, there is no evidence of a device “windfall.”

At a time when the federal government is working to promote investment in U.S. industries of the future, it is inconsistent that a tax of this magnitude would be considered on the medical device industry. We must do all we can to encourage and promote research, development, investment and innovation. Instead, increased taxes, such as this one on the medical device industry, coupled with the increased regulatory uncertainty the industry also faces, will lead to further job losses, hinder the development of breakthrough treatments and delay patient access to medical technology.

To read the  full  text and view the list of signatories, please cliche here:  2012-11-13 Medical Device Tax letter to Senate Leadership