Thursday, September 17, 2009
Killing Innovation and Reforming Health Care
I just read this morning, that the Health Care proposal coming out of the finance committee; contains a $40 billion dollar tax on the Medical Device industry. So, I dug in deeper. Turns out it is $4 billion dollars a year for the next 10 years, it is on all medical device manufacturers with revenues over $5 million dollars and it is to be based on "relative market share".
Some background, the medical device industry in the U.S. is just less than $100 billion; that means this is a greater than 4% tax on some of the most innovative companies in the United States. Will already having a high barrier to entry through the FDA 510k process and the device registration fees required by the FDA; is this really the smartest tax to apply to our economy--or, as David Auth, a Medical Device inventor and pioneer, states, "Our government rewards dummies and punishes geniuses".
Some references for more context and reference:
New health propsoal is industry's favorite so far. -- AP, Yahoo News
Finance Committee Proposal -- Max Baucus, Senate Finance Committee
Medical Device Pioneer David Auth Seethes Over $40 Billion Industry Tax Idea, FDA Delays
Market Size References  and  and FDA Annual Device Registration Fee Reference  and to even create a device for the market FDA 510k Fee  and don't forget the 10's and 100's and of thousands and even millions of dollars to create FDA approved products 
Medical Device Manufacturers Association