AdvaMed 2011 MedTech Conference Tackles Healthcare Reform

October 2011: OrthoWorx e-Newsletter

Healthcare reform (and other topics) was hit head-on during AdvaMed’s annual, three-day conference in Washington, DC, September 26-28, 2011. Generally, the meeting addressed finance, entrepreneurship, competitiveness, compliance and healthcare reform. Brad Bishop, Executive Director, OrthoWorx, provides perspective of the meeting through an orthopedic lens. As he attended the event, he noted substantial focus on the 2.3 percent device tax, which is included in the new healthcare law and is scheduled to take effect in 2013.

“Governor of Indiana Mitch Daniels spoke of the importance of the medical device industry to the U.S. economy and the Indiana economy in particular. He emphasized that this is an industry that changes lives and provides great jobs for citizens,” he said. Bishop indicated there were compelling discussions about the potential damage to jobs and innovations in patient care because of the medical device excise tax. “This year a heightened awareness of the topic emerged as 2013 more closely approaches and particularly on the heels of the recently released AdvaMed study,” states Bishop.

The study, titled Employment Effects of the New Excise Tax on the Medical Device Industry, September 2011, portrays a candid picture of projected outcomes of the 2.3 percent device tax. “AdvaMed supports repeal of the medical device tax, but remains committed to the central elements of health reform that are consistent with our long-held principles, including expanded coverage, reform of the payment system to encourage quality and efficiency, and a new emphasis on health promotion and disease prevention.” (Study: Device Tax Could Cost Jobs, Stifle Innovation, September, 2011.)

Regulatory issues collectively was another topic revisited, including the need for comprehensive tax reform to put U.S. companies on a competitive footing with companies from other countries experiencing a more favorable tax scheme. “Part of the issue is U.S. tax rates are high compared to other countries. Also factoring into this is the treatment of foreign profits. Additionally, a lack of clarity and predictability hinders investments in expansions and job growth,” explains Bishop.

There is also a need for greater clarity and predictability in the regulatory environment. Some U.S. companies lack confidence in the ability of the U.S. Food and Drug Administration (FDA) to move products through reviews on a predictable schedule. This may lead a company to consider launching new products outside the U.S. to expedite time to market.

More than 1,700 industry stakeholders from 22 countries and 35 states were expected to attend the AdvaMed MedTech Conference. AdvaMed is an organization that focuses on advocacy for its members, including medical device and diagnostic products manufacturers and health information systems.