Device Tax Hits Manufacturers: Job Cuts, Hospital Billing Reported

Device companies began paying the long-fought 2.3 percent medical device excise tax in January, with impacts rippling through the healthcare system.

Across the industry, devicemakers will pay $194 million each month to satisfy the tax, according to industry estimates, and it’s already being blamed for increased prices and some job losses and plant closings. AdvaMed estimates total tax revenues of $2.3 billion annually.

“Instead of investing in new medical technologies or creating new jobs, innovators across the United States wrote a check to the IRS this month,” said Mark Leahey, CEO of the Medical Device Manufacturers Association, which issued a joint release with AdvaMed and the Medical Imaging & Technology Alliance (MITA) to mark the Jan. 29 payment.

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