Medical device companies may be celebrating last month's U.S. Senate vote to repeal the 2.3% excise tax they now face. But The New York Times Editorial Board condemns the vote, arguing it is the result of massive industry donations and congressional lobbying rather than a common-sense move.
Of course, the 79-20 vote was a non-binding resolution, a largely symbolic action against a tax designed to raise nearly $30 billion over a decade to help fund the Affordable Care Act. That lopsided vote included 34 Democrats, such as new Mass. Sen. Elizabeth Warren and Minn. Sen. Al Franken--and a good number initially supported the tax as part of the healthcare reform law. Many Democrats, unlike Republicans, now support a repeal as long as the government can find a new funding source to replace it. Some observers argue that a repeal is a long shot, but the NYT editorial board posits that a formal repeal attempt is now likely. And the writers lament the success of a "concerted lobbying effort" that brought Warren, Franken and others to vote yes on repeal.
Curious as to how rigorous the med tech industry's lobbying effort has been? The NYT notes that "device interests" sponsored two fund-raisers for Utah Republican Sen. Orrin Hatch, who wrote the repeal amendment. In 2012 alone, medical device companies and their organizations gave close to $1.4 million to 75 Senators, according to the editorial. And 308 House members received $2.8 million from various industry donors.
Of course, the device industry has long said that the tax will kill both jobs and innovation, and argues that repealing the measure will help keep the U.S. competitive in an aggressive global market. It's an argument that Warren and others have now taken up, but the NYT claims even that point of view is spurious, because "there's no evidence the tax will really have that effect."
Whatever you think about The New York Times' editorial position on the issues, it is one of the few organizations to publicly oppose the device tax's repeal and the lobbying effort to change minds in Congress. And the industry-led push will certainly continue in the months ahead.
- read the full NYT editorial (sub. req.)
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