Could “Pacemaker Tax” Provide the Wriggle Room to End Obamacare Deadlock?

So the United States is closed for the time being. What a strange concept, but nonetheless meaningful because at the heart of the deadlock lies the co-called “Obamacare” legislation. And tagging along with Obamacare is the 2.3% medical device sales tax, often covered on our pages and the subject of more weeping and wailing among medtech manufacturers and suppliers than pretty much any subject in recent years. That’s unsurprising, given the regressive nature of the tax and the fact that it is very likely to stifle innovation and even threaten the existence of some players in the SME medtech sector who see the glimmer of distant profits being kicked ever further down the road.

Over here in Europe we have our own problems. I’ll not dwell on them, having done so at length in very recent times. Suffice it to say the biggest headache is the regulatory burden that looks like it’s going to be dropped unceremoniously on all companies hoping to bring new technologies to market in Europe. Europe is going to look like America, but with knobs on because our continent is such a geographically and culturally and linguistically diverse place that gaining approval for a device in a way that satisfies all parties is ending up looking like requiring the biggest bureaucratic underpinnings imaginable.

Back to the US though, we’re not experts in the U.S. political process, but what has occurred in the last week is that the house of representatives has voted through two amendments that would have seen a repeal of the medical device sales tax and a one year delay for the rest of the Affordable Care Act. The senate has then duly rejected these amendments, leaving the country without an approved budget beyond the September 30 deadline. The fallout could end up being something and nothing, but in the short term the impact has hit the headlines across the world, the US dollar has fallen…. and the Statue of Liberty has been closed to the public.

So, now that the wheels have fallen off and the brinkmanship players have gone over the brink, what may well happen is that the two republicans and democrats will realise that what they’ve done is not sustainable and try to find a way back to some form of normality. And the brink will have moved.

The potential glimmer of light for the medtech industry is that democrats are starting to hint at “wriggle room”. They will not move on Obamacare, because that’s their proudest achievement, but they might do so on the medtech sales tax.

Let’s see.

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