Med-Devices Sector Keeps Pressure On Senate's Fee Proposal
15 September 2009 - 8:47AM
Dow Jones News
The medical-devices sector's trade organization asked Senate
Finance Chairman Max Baucus on Monday to drop a proposed $4 billion
annual fee for the industry as the Senate works on health-care
legislation.
The Advanced Medical Technology Association, or AdvaMed, has
already come out strongly against the idea, which arose last week
in a proposal from Baucus, D-Mont. The industry considers it a tax
that, assessed based on U.S. sales of devices, would hit bluntly
without consideration for device complexity while hiking costs for
patients, hospitals, consumers and physician practices.
"We ask you to eliminate this proposal from consideration," said
the letter from AdvaMed and more than three dozen other trade and
advocacy groups.
Executives throughout the devices industry have put up a
consistent front of resistance against the proposal, with several
executives addressing the matter during analyst conferences in
recent days.
According to Gary Ellis, chief financial officer at devices
giant Medtronic Inc. (MDT), the fee proposed by Baucus means an
inappropriate "double-impact" on the devices sector, which
anticipates a squeeze from reduced government payments to hospitals
that buy devices. Ellis spoke at a Morgan Stanley health-care
conference on Monday.
"We are resisting that (proposal) vigorously as just bad
thinking," added Edward Ludwig, chief executive of medical
products-maker Becton Dickinson & Co. (BDX), while speaking at
the same event. Officials from orthopedics company Zimmer Holdings
Inc. (ZMH) and heart device-maker Boston Scientific Corp. (BSX)
have also spoken out against the plan.
Scott Garrett, chief executive at medical test-maker Beckman
Coulter Inc. (BEC), said in an interview with Dow Jones Newswires
that he doesn't think the Baucus proposal will wind up in
legislation as first presented. But Garrett - an AdvaMed board
member - also doesn't think a lesser hit is palatable.
"Half a bad idea is still a bad idea," he said.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728;
jon.kamp@dowjones.com