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Industry groups urge Congress to delay device tax

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Now that the IRS has unveiled its final rule on the medical device tax, some in the industry say there's not enough time for devicemakers to get their compliance ducks in a row before the 2.3% charge takes effect Jan. 1.

On Thursday, the IRS finally published its final guidance on the issue, changing very little from the draft it floated back in the spring. Now, the Medical Imaging and Technology Alliance is imploring Congress to, at the very least, delay the tax's birth date, Executive Director Gail Rodriguez said.

"With a mere 27 days until the device tax goes into effect, medical imaging and radiation therapy manufacturers do not have sufficient time to implement or adjust to these destructive regulations," Rodriguez said in a statement. Ultimately, she added, lawmakers should repeal the charge.

AdvaMed CEO Stephen Ubl said his organization is carefully reviewing the regulations, but, echoing the Medical Device Manufacturers Association, said AdvaMed stands firm in its belief that the tax needs to be nixed to protect an important industry.

"While Washington talks about a fiscal cliff, this tax could push us off an innovation cliff, costing as many as 43,000 jobs and hurting the ability of medical technology companies to find tomorrow's treatments and cures," Ubl said in a statement. "It should be repealed."

Little of that rhetoric is new, of course, as devicemakers and their agents have been bemoaning the Affordable Care Act-funding charge since the law passed two years ago. In the run-up to the release of the final rules, the industry has lobbied hard for a repeal, which passed the House but has stalled in the Democrat-controlled Senate. The tax's opponents are holding out hope that it could finally come to a vote in the upper chamber after a few repeal-minded senators get inaugurated in January, but some worry Congress will be far too distracted with the looming fiscal cliff to give the issue the time of day.

However, many of the industry's major players seem resigned to just up and paying the thing, at least in the short term. Medtronic ($MDT) CEO Omar Ishrak said the company has already planned around the tax, calling it just another pressure to manage. And, like Medtronic, most of the big-time devicemakers have already started trimming payroll to prepare for the charge, including Stryker ($SYK), Boston Scientific ($BSX) and St. Jude Medical ($STJ).

- here's MITA's statement
- check out AdvaMed's release

Special Report: 5 Things You Need To Know About the Medical Device Tax

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