A recent report by the National Venture Capital Association (NVCA) and PricewaterhouseCoopers LLP (PwC) finds that investing in the medical device sector has declined for the third consecutive quarter, and the Medical Imaging & Technology Alliance (MITA) has issued a statement pinning part of the blame on the uncertainty created by the medical device tax in the Affordable Care Act.
MITA says the National Venture Capital Association (NVCA) and PricewaterhouseCoopers LLP (PwC) Q3 2012 MoneyTree Venture Capital Investment Report’s findings are just the latest sign among a host of economic indicators showing that the impending device tax and other regulatory uncertainties in health care are having a real economic impact now.
“Media reports from across the country have confirmed that job losses have already started due to the 2.3% medical device tax that is estimated to cost $8 billion in economic output annually,” said Gail Rodriguez, Executive Director of MITA in the statement.
Beginning January 2013, the medical device excise tax will impose nearly $30 billion in new taxes on medical technology companies, MITA said in its release.
In early June, the House of Representatives voted 270-146 to pass a bill to repeal the medical device tax. However, since a repeal of the device tax would partially defund the Affordable Care Act, it will be difficult to get similar legislation passed in the Senate, which is controlled by Democrats.
In addition, in June President Obama said he would veto a repeal of the device tax should such a bill somehow make it to his desk, according to Reuters.
MITA is fighting back by stressing that the device tax is costing jobs now and will ultimately hurt patients. Plus, when one looks at the numbers, it is an unfair burden on a valuable sector of the economy, it says.
Citing a recent economic analysis prepared for the Advanced Medical Technology Association (AdvaMed), MITA stated that “implementation of the medical device tax would raise the effective corporate tax rate for medical technology companies by nearly 50 percent and subject companies to one of the highest tax rates in the world, costing companies 39,000 U.S. jobs and $8 billion in economic output annually when it goes into effect.”