Monday, October 26, 2009

House Lawmakers Propose Lower Fees on Medical Device Makers

It was reported late on Monday that House Lawmakers will propose a $20 million dollar fee on medical device makers. This would whittle down the $40 million that was original proposed by the Senate Finance Committee. The lower fee is a result of some of the major players like Medtronic, St. Jude and Johnson and Johnson furiously lobbying and throwing millions of dollars at Congressional leaders. It's always entertaining when you read that the industry is crying foul, claiming that this tax will hurt innovation. Recently, as far as the spine industry is concerned, how much innovation have we really seen? Under the House legislation, the tax would not kick in until 2013. The difference between this legislation and the Senate's is that the tax will be scaled, meaning that legacy companies will be paying disproportionately to start-ups or early growth stage companies.


  1. Fees?? Never!! That reeks of socialism! But we'll happily settle any whistleblower suits for multiples of the proposed fees. After all, those are just legitimate marketing expenses.

  2. If there has not been much innovation in spine "lately" (a very micro view in my opinion), why put even more barriers via fees and taxes in the way of companies, small or large???

    The industry has every right to cry foul. This is America, not Cuba, France, Spain, etc. Free enterprise and the profit motive have created a system that has brought tremendous innovation and care to suffering patients, and now Congress wants to penalize their success??

    The basis of this tax is that these evil companies (that have been improving care and lives far more than the government ever could) are making too much money and they should just pony up. There will be no benefit to the industry from this. We all know companies will drive up the price of their products to cover these fees, OR reduce other in-house costs like jobs and future research. This is not rocket-science, it is how any of us act when big government encroaches on liberty and penalizes success.

    Whether it goes into effect in 2013 or tomorrow, we shouldn't be excited about Congress cutting the fees in half and extending the start date of their implementation when they have no right to impose these fees in the first place. They are already preventing innovation and quality and cost of care by having an overly aggressive regulatory approval process -- enough is enought. They should get out of way of the professionals and let them do their job.

  3. R/D Recruiter: Free enterprise and profit also brought us financial instruments of mass destruction aka Credit Default Swaps and Collateralized Debt Obligations. Today, Wall Street is looking into new ways of Securitizing Insurance Policies. Maybe the benefit will be companies developing "real" cutting edge technology, not like some devices that are clearly looking for an indication. One can argue that a tax will stop innovation and technological improvements. Yet, 67% of Americans want some form of a public option. Basically, that's what it is, an option! If you believe that 500+ Pedicle Screws and 300+ Cervical Plates, and 100 + Interbody Devices is innovation, welcome to the commoditization of the spine industry. We don't have to worry about the government because we are pricing ourselves out of the market. Thanks for your commentary! It's America and you have every right to voice your opinion, keep reading! We love your passion and input!

  4. R/D Recruiter, funny you should mention France. I would take a bit closer look at the inventions regarding spine that have been made there. To your surprise you will find that these lazy unionized wine slugging snail eaters have made at least as many meaningful contributions to spine as has the US. Look up names like Roy-Camille, Cotrel, Dubousset, Graf, Deramond, and there are many others. And they do all this with a population which is about 15% of that of the US, and a 36 hours work week. It must be something in the wine.