Website reveals device makers that dodge excise tax costs
Allergan ($AGN), Cerner ($CERN), Waters ($WAT), Alere ($ALR), Invacare ($IVC), Integra LifeSciences ($IART) and Misonex ($MSON) are just a few of the medical device companies passing on the cost of the industry's 2.3% excise tax onto their hospital customers, and a major hospital purchasing group wants you to know about it.
Their names are among more than 40 device companies listed on a new website in a move by group purchasing organizations (GPOs) to draw attention to the cost shifting through a de facto public shaming.
Reuters reports that the Healthcare Supply Chain Association, which lobbies for the hospital industry's largest group purchasing organizations, has rolled out a website that basically names names. The device tax helps support the Affordable Care Act, and the HSCA's website reveals device companies that are attempting to shift the cost of the tax to hospitals, providers or patients themselves. The group's action comes as individual GPOs such as Novation--which serves more than 65,000 providers--have said they won't tolerate the practice.
There are more than 40 companies listed on the website so far. At this point at least, larger device giants like Medtronic ($MDT) haven't made the list. But as Reuters notes, some larger device companies are named, and we mention their names above. Cerner, Integra and Waters, among others, declined to comment to Reuters, and many others didn't respond. One company--Invacare--told the news agency it would pass the extra tax cost onto the market, even though the net impact will be less than $1.5 million.
It's unclear whether the public list will have much of an affect in the long-term. Cardica ($CRDC), for example, is on the list. But as The Wall Street Journal previously reported, the company has been pretty matter-of-fact about its intentions, notifying customers about the change.
Medical device companies have become vocal opponents of the tax, arguing that it is a job killer and will stifle innovation in the long-term.
- read the Reuters story
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