US Purchasers Urge Taxman To Prevent Medtech Industry Windfall

Already this week we’ve covered Cook medical’s position relating to the impending 2.3% US sales tax levy, which forms part of the Affordable Care Act. It’s hard to find supporters in the United States, and that’s not really surprising when the consequences of the tax look to be almost unequivocably tough on a medical device industry which has led the world’s advances in technology from which we all benefit at some point.

And then this piece, published on Wednesday May 16th, caught our eye.

It’s from DOTmed news and starts by detailing the efforts of the medical imaging OEM trade lobby who quite clearly hate the very concept of the tax.

But after all that perhaps predictable stuff, the piece goes on to express the concerns of hospitals and purchasing organisations that manufacturers will actually find a way to benefit from the tax if they’re allowed to pass on the costs to their customers. These concerns have been passed on to the taxman(IRS) in a letter, the gist of which is that if device companies can deduct the tax from their income, which appears to be allowed under the current rules, while also passing along the cost it would “leave these companies in a better financial position than they were before the ACA became law.”

So, the collective voice of those parties vulnerable to the evil ways of the medical device industry wants the IRS to prevent companies from deducting the tax from their income unless they can demonstrate that they have not passed the costs on to their customers in any event.

One wonders whether any legislator saw all this coming when they drafted this particular bit of the bill.

Source: DOTmed