Rough Start Seen on Medical Device Tax Implementation

????????????????????????????????????????Medical device manufacturers are confronting the issues regarding the implementation of the Medical Device Tax this year, news reports say, pointing out several problems that were encountered before the new tax was imposed on manufacturers. Device manufacturers and several politicians have tried to repeal the tax, pleading that the law may put the industry in jeopardy. Different opinions have clashed over this tax but it is inevitable and several companies have already resigned to the fact that they would just have to cope with it. This may be a lot to take in, especially now that the Food and Drug Administration will have a revamp on the approval process for hip replacements.

This surcharge on medical devices was finalized in December 5, 2011 but will take effect on the following year. The Affordable Care Act which is better yet known as ObamaCare, will make use of the money gathered through the taxes paid by makers of medical device. Although the Affordable Care Act will be implemented in 2014, the execution of the tax is in 2013 to properly fund the health care program when the time comes, leading newspapers say. A 2.3 percent tax will befall on certain devices but will not include the procedure kits that are assembled in the hospitals (i.e. suture removal kits).

The president of the Medical Device Manufacturers Association (MDMA), Mark Leahey, believes that this policy is not a good idea. He shares that it may even bring the industry down which may eventually lead to job loss. Even though the bill has already been passed, there are those who think that the sudden application is a bit brash. Manufacturers were not given the enough time to settle in with the new bill, say senators Amy Klobuchar and Kay Hagan in their letter to the Senate Majority Leader Harry Reid.

There is also the possibility that the companies will increase the prices to compensate for this surcharge. For this reason, the American Hospital Association has advised the Internal Revenue Service (IRS) to make sure that this problem will not occur. Several men and women who have had problems with their prosthesis feel that this is a way for manufacturers to give back to people who have been injured by their products. Others are in the verge of filing legal actions against the makers of these prostheses. Visit this site to know more about this issue.

URL References:

  • ama-assn.org/amednews/2012/12/17/gvsb1217.htm
  • news-medical.net/news/20121210/Medical-device-tax-repeal-advocates-feel-momentum.aspx
  • online.wsj.com/article/SB10001424127887323854904578264170779696696.html
  • medicaldevices.org/issues/Health-Care-Reform,-Device-Tax
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