Will the device tax cost lives?

While the rhetoric in the fight over the Affordable Health Care Act's 2.3% tax on medical device sales has often been colorful, some repeal supporters have added a new wrinkle to their argument: The charge will discourage innovation and, in the long term, cost patients their lives.

In a Star Tribune op-ed, LifeScience Alley CEO Dale Wahlstrom takes his family as an example. In 1991, his mother died of cardiac arrest. However, by 1996, when his father suffered the same ailment, technology had progressed, and, thanks to an ICD produced by a Minnesota company, his father was able to live on. The message: Innovation in the device industry leads to better outcomes for patients, and discouraging that innovation amounts to shortening lives.

Earlier this month, Forbes' John Graham made the same case. Graham contends that the tax, once it takes effect in January, will lead to a $2 billion reduction in R&D budgets across the industry. And the Pacific Research Institute, a right-leaning think tank, takes it a step further, saying that the compounded effect will lead to shorter life spans for patients in the long term.

Bringing the threat of patient mortality into the debate certainly amounts to rhetorical escalation, and it comes as repeal advocates face increasingly longer odds. Despite getting an anti-tax bill passed in the House, Republicans have an uphill battle from here on out. Sen. Orrin Hatch (R-UT) has introduced a similar bill in the Senate, but Democrat leadership there is unlikely to bring the measure up for debate. And, even if the repeal did somehow clear both chambers, the White House has promised to veto it.

For their part, supporters of the tax say its cost--$30 billion over 10 years, according to the Congressional Budget Office--will be mitigated by the increase in insured patients, or new customers for devicemakers. Furthermore, the 2.3% charge is essential to make 2010's healthcare reforms possible, supporters say. Of course, repeal advocates haven't lost hope, and AdvaMed is counting on a year-end Senate vote spurred by the few Democrats who have aligned against the tax.

- read Wahlstrom's op-ed
- check out Graham's piece in Forbes
- here's the Pacific Research Institute's whitepaper (PDF)

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