Here’s an example in California of how the Patient Protection and Affordable Care Act (PPACA) is inhibiting medical innovation:
Jim Corbett, the CEO of Vertos Medical Inc., says a non-invasive procedure invented by his company is a breakthrough in the treatment of lumbar spinal stenosis, a common affliction of the elderly that makes it painful to walk or stand.
Corbett wants to make the technology – known by the brand name "mild"– more widely available. But he fears that a new 2.3 percent federal excise tax on U.S. sales of medical devices, levied since Jan. 1 under the Affordable Care Act, will dampen investor ardor and drain resources that could be used for development, marketing and physician training.
Unlike other treatments, the “mild” technique only requires an outpatient visit and costs less than $5,000. “So here is this procedure, which could save the system hundreds of millions of dollars, but they tax me and slow me down to do it,” said Corbett.
What makes is the medical device tax more burdensome than most is that it taxes revenue and not profits, which hits small companies especially hard.
Joe Moffett, president of E02 Concepts in San Antonio, TX said that because of the tax, young companies like his will send more money to Washington instead of investing in the company:
There are a lot of small medical device companies, and all [the health care law] doing is stacking the deck against those who are trying to be innovative new companies. They are running at a loss, and adding that cost really is not a help.
The medical device tax is a tax on innovation. Thousands of high-paying jobs and U.S. leadership in the medical device industry are at risk. There’s bipartisan support in Congress to repeal the tax, so let’s get it done.