Stryker, Hill-Rom, and Zimmer. What’s the common denominator between all three of these large medical device companies? Come on, this is a total softball. For those of you that went to public school, the answer is LAYOFFS. All three device companies have attributed their recent layoffs to the impeding 2.3% medical device excise tax. But wait, there’s more…
Both the Office of Management & Budget and the Joint Committee on Taxation estimate the device tax will raise about $20 billion from 2013 through 2020. A MassDevice.com analysis revealed that the tax is likely to bring in more than $2 billion in revenues next year from the top 50 medical device companies alone.
Want more? AdvaMed estimates the tax will kill between 39,000 and 43,000 medtech jobs. A recent KPMG survey revealed that over 60% of medical device executives believe it will increase tax compliance costs.
Okay, I’ll stop. You’ve heard enough from me. So I’ll pass the baton to Mr. Steve Ferguson, the Chairman of the Board of the Cook Group, Inc. Yes, that Cook. The parent of companies worldwide involved in the research, development, manufacture, and sale of medical devices. Before his days at Cook, Steve was a partner in the law firm of Ferguson, Ferguson & Lloyd from 1966 to 1990, and remains of-counsel with the firm Ferguson & Ferguson. He served four terms in the Indiana House of Representatives from 1967 to 1974. Ferguson received his A.B. from Wabash College in 1963 and a J.D. with distinction from Indiana University School of Law in 1966.
In this interview with Steve Ferguson, we learn all about the 2.3% medical device tax and its potential implications.
Here’s What You Will Learn
- Why has Cook taken such a vocal stance in the effort to repeal the 2.3% medical device tax?
- Why haven’t other large medical device companies followed in the footsteps of Cook? Because of fear? Because the tax will hurt smaller companies the most? Is there more to the story?
- The medical device tax is top-line in nature. What does this mean and how will it impact the bottom line for medical device companies?
- Why was the medical device tax even considered in the first place? Learn why it actually could have been worse than it is now!
- But millions more people will be insured through healthcare reform. Won’t medical device companies benefit from this? Steve dispels the myths to this theory.
- Can’t medical device companies just pass along the increased costs to their customers?
- The rather obvious potential negative ramifications of the medical device tax: Outsourced manufacturing, layoffs, reduced investment in R&D, increased compliance costs. Needless to say, the list is rather long.
- Is industry powerless to fight back? What actions can you take today to help repeal the medical device tax?
- And much more!
This Is What You Can Do Next
1) You can listen to the interview with Steve Ferguson right now:
2) You can also download the mp3 file of the interview by clicking here.
3) Don’t forget – you can listen to this interview and all of the other Medsider interviews via iTunes. And if you get a chance, leave us an honest rating and review on iTunes. It really helps out.
4) Read the following transcripts from my interview with Steve Ferguson. Also, feel free to download the transcripts by clicking here.
Read the Interview with Steve Ferguson