The House of Representatives voted to repeal the Affordable Care Act once more, with Republicans saying that while the Supreme Court has upheld the law as constitutional, it is over-reaching and "job-killing" in regards to the medical device tax.
Their efforts may be for naught, however, much like the device tax repeal House Republicans passed in June. Both bills would need to clear the Democrat-controlled Senate to have a chance, but the last ACA repeal vote failed in the other chamber, and the anti-tax measure was never brought up for debate.
As a result, the bill's 2.3% tax on U.S. medical device sales, set to kick in in January, would seem to be a given--although not everyone in the device industry sees it that way. Stephen Ubl, CEO of AdvaMed, has said the trade group expects the tax repeal bill to get its proper dues in the Senate later this year, citing bipartisan support from Democrats in devicemaking states like Minnesota and Massachusetts.
However, judging by their actions, device firms aren't counting on that. To prepare for the tax hit, estimated at $30 billion over 10 years, devicemakers are mulling layoffs and budget slashing. Stryker ($SYK) has already begun cutting jobs at its New York plants, and Indiana's Zimmer is preparing to do the same. Medtronic ($MDT), predicting a $175 million hit next year, said it started to amend its practices to prepare for the loss.
- read the Politico story