Is the medical device industry full of cheer about the newly-defined healthcare tax parameters? Yes and no. The IRS released its guidelines for how the 2.3% excise tax associated with the Patient Protection and Affordable Care Act of 2010 will be implemented. This was anticipated by an industry that is soon to face the impact of the taxes. The guidelines were met with a mixed reaction from device companies. Some breathed a sigh of relief, others still are concerned about the tax's impact.
On one hand, the IRS waived some late fees and clarified the policy on prepackaged kits (in most cases, if a product within a kit already incurred a tax liability, companies would not be double-taxed.) and clarified on combination drugs (in most cases, combo drug/device products would not be taxed.
On the other hand, some things the industry wanted such as a delay in implementation, a waiver for dental products, and an exemption for leased products were rejected by the IRS.
Major device companies still say profits and layoffs will be impacted by the tax. Cook Medical's CEO recently indicated his company would not expand manufacturing in the United States given the tax policy.
Kalorama Information's The Global Market for Medical Devices 3rd Edition examines the overall medical device market and assesses the impact of the tax on several companies.