Medical Device Tax Weighs on North American Companies

Emergo Group’s 2013 Medical Device Industry Survey points to positive views for the industry overall at 71.1%, but the cloud over the heads of North American device makers is strong due to the recent medical device tax, and consumers may suffer the most.

When asked about the tax in the survey, 64.6% of senior management companies polled in North or South America said the tax with either have a very or somewhat negative impact, with the majority of the companies surveyed being North American based. In comparison, 33.1% of Europe, Middle East or African companies and 40.6% of Asia Pacific companies responded with similar negative outlooks to the tax.

When senior management of North and South American companies were asked about company plans to adapt to the change, 41.6% said that they will be passing along some or all of the tax to the consumer; 31.1% will be working to lower production costs without reducing staff/employees. Reduction of staff/employee headcount factored in at 11.1%, while 36.1% had other plans or could not disclose their response to the problem.

According to the survey, it remains to been what impact the medical device tax will have on employment in the industry; however, very few of these companies plan to leave the U.S. market, so they will seem to have no choice but to adapt to the change. 

Reina V. Slutske is the assistant editor for MD+DI.