US Medical Device Industry tax levy and “promised” job cuts. What does this mean for OUS Medtech industry?

It’s a press release a day at the moment on this subject, mostly from US industry and company chiefs with premonitions of doom for 43000 people soon to be rendered unaffordable by the US medical device industry because of Obama’s 2.3% tax levy. Interesting stuff for the international arena because presumably if products aren’t made in USA they’re made somwehere else.
The tax, originally intended to raise $40m in order to support healthcare reform in the USA has been reduced down to $20m following pressure from the medtech industry giants. The process has taken a few years already, having notably sparked metaphorical table thumping as long ago as the Advamed industry group meeting two years ago. But what will really happen if the levy is implemented as it stands? Will 43000 people really lose their jobs? Will significant chunks of the medtech operation move offshore? Or is there enough fat in the works of these high paying leviathons that the end result will be little more than a short term hit on their earnings expectations and share price? The trouble is, this is not the only pressure on these businesses….healthcare expenditure is increasingly under scrutiny and it is widely accepted, especially across European markets, that clinicians are under pressure to use what they need to rather than going for the high end option. After all, the medtech industry spends millions developing new devices and selling their added value when the basic designs of products such as hip prostheses appear to do the job pretty well. Neither the industry nor the companies are going to be quick to acknowledge that of course.
Here at medlatest we’ll keep an eye on European medtech sentiment and see if we pick up any commentary or moves to exploit the Obama plan.
Source: medlatest staff

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