MINNEAPOLIS, Minnesota — Medtronic Chief Executive Bill Hawkins warned that a proposed federal tax on medical device makers would hurt the industry’s competitiveness, jobs and new therapy development.
Still, Hawkins said he’s “encouraged” that the latest Senate proposal halved the tax’s annual amount to $2 billion compared with an earlier proposal. The collective tax is included as part of Congress’ major health reform effort. Many particulars of the Senate proposal’s version of the tax differ from provisions contained in the health bill that recently passed the House of Representatives. If the Senate bill passes, differences between the two bills would be ironed out in a conference committee.
Hawkins said the industry looks forward to engaging in “constructive work” with Congress and the Obama administration in shaping the tax’s final outcome. Still, he didn’t hesitate to expound on his perception of the tax’s negative implications.
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“A tax on medical device manufacturers could have untold adverse implications for innovation and jobs, and yet we accept the notion of shared responsibility in meeting the challenge of expanding access to affordable, quality health insurance for all Americans,” Hawkins said in the statement.
A Bernstein analyst said the proposed tax would dock industry earnings by 3 percent or 4 percent annually, but at least some of that amount would be offset by increased sales due to expanded coverage, the Wall Street Journal reported.
