US Medical Devices Tax Will Be Passed On To Customers

Given our avowed intent of focusing on European, Clinician-orientated news we’ve tried not to deal too deeply with the impending US 2.3% medical devices tax levy. The major impact in our opinion is likely to occur inside USA rather than over here, despite the fact that US companies are repeatedly stating that they are expecting to grow revenue outside US rather than in it. Of course the tax is being blamed for all ills, although articles such as this one rather suggest the tax may be being used as a scapegoat or at very least the straw that broke the camel’s back, there being many other challenges in USA right now, not least the continuing saga of FDA’s reluctance to apprve new technologies.

Anyway, it seems like companies will find ways to claw back the 2.3%, whether through further cost cutting or accelerating sales outside USA. But in this article, which rather tops and tails the story, European Medical Device Technology (EMDT) confirms what was reported by Emergo last week in their survey of US manufacturers (notably not just the big ones), stating that companies would most likely recoup losses by adopting prices increases. Hopefully that means inside USA rather than outside, but we’re certainly not likely to see much downward movement in the next few years however much pressure is applied.

Source: EMDT