An estimated $40 billion tax on the medical device industry, proposed in the health system reform bill passed by the Senate Finance Committee Oct. 13, would result in a doubling of the tax burden already faced by these companies and would likely contribute to a growth in overall health costs. That’s according to a new analysis released by the Advanced Medical Technology Assn., a device company trade group based in Washington, D.C.

The analysis, released by AdvaMed on Sept. 30, concludes that the tax will divert economic resources away from the medical device industry and likely result in its contraction, which would have detrimental effects on the output of innovative technologies.

On Sept. 16, Finance Committee Chair Max Baucus (D, Mont.) introduced his version of a health system reform bill, and language proposing the 10-year tax on the medical device industry stayed in the final bill passed by the committee.

“These disturbing findings reaffirm that the $40 billion tax on medical devices over the next decade is neither sound health policy nor tax policy, will result in higher costs for patients and will cost jobs in this sector,” said Stephen J. Ubl, AdvaMed’s president and CEO. “We urge Congress to reject the $40 billion tax.”

This tax includes such frivolous luxuries as pacemakers, stents, artificial heart valves, defibrillators, automated wheelchairs, mechanized artificial limbs, replacement hips and knees, surgical gurneys, laparoscopic equipment, and the like.

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