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Local medical device companies still wary about new tax, survey finds

Executives at local medical device companies remain uncertain that a projected increase in the use of the devices will offset the costs of a new medical device tax levied by the Affordable Care Act, which is also known as Obamacare.

Massachusetts Medical Device Industry Council

Tom Sommer

The uncertainty was a finding of a survey commissioned by the Massachusetts Medical Device Industry Council, which is holding its annual conference Wednesday at the University of Massachusetts Boston. The survey’s findings are being presented at the conference.

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According to the council, only 8 percent of survey respondents believe the jump in new patient sales will offset the device tax.

Last month, President Obama announced that 8 million people had signed up for health insurance under the Affordable Care Act. In theory, more people with health insurance should translate into higher sales for the medical device industry.

The medical device tax, which went into effect at the beginning of 2013, is projected to raise $2.3 billion a year, said the council.

The purpose of the tax is to help subsidize insurance under the health law.

In a statement, council president Tom Sommer said: “Another year has now passed as the medical device sector learns to live under the new health care reform rules and impacts. Our device companies, which contribute thousands of jobs and millions in economic activity to our state, have been doing the best they can under challenging circumstances.”

There are indications that the Affordable Care Act may be pushing research-and-development spending lower as companies use more offshore labor, the council said.

The survey commissioned by the council was conducted by Kadence International in March and April. Survey findings were drawn from a 10-minute online questionnaire filled out by 119 medical device executives.

According to the council, its membership is made up of more than 350 manufacturers, suppliers, research institutions, and academic health centers in the medical-device field. The council’s mission is to promote the interests of the Bay State’s medical device sector.  

Chris Reidy can be reached at reidy@globe.com.
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