Capitol View: March 29, 2010 Archive

The Medical Device Tax: What impact will it have?

Posted at 9:12 AM on March 29, 2010 by Tom Scheck (4 Comments)
Filed under: Campaign 2010, Campaign 2010: U.S. House, U.S. House, U.S. Senate

There has been a lot of political chatter about a Wall Street Journal report citing Medtronic CEO Bill Hawkins saying the excise tax would lead to the loss of 1,000 jobs. Republicans, like GOP Rep. Michele Bachmann and GOP Rep. Erik Paulsen, say the tax will mean jobs losses in the industry and are pointing to Hawkins comment to back it up.

MPR's Annie Baxter reports this morning that Medtronic's spokesperson clarified that statement:

A Medtronic spokesman said in an email that the statement was taken out of context; Medtronic does not have plans to eliminate jobs as a result of the health care reform law.

The spokesman said Hawkins meant the industry as a whole would lose jobs, and that Medtronic is worried about the impact of the excise tax on device makers large and small.

But Baxter reports that the Medical Device Tax, which is a part of the recently signed health care law, will impact the industry, especially smaller companies.

Check out the entire story here.

Update: Here's the full statement from Medtronic on the impact of the new law:

Like the passage of Medicare in 1965, the health care reform bill signed Tuesday by President Obama will shape the future of U.S. health care and our industry for decades to come. Medtronic supports patient access to affordable, quality health coverage and new law takes our country in this direction. We helped to form several elements of this legislation, but there is no doubt it will have an impact on our business.

The excise tax on medical devices now included in the law was reduced from $60 billion to $20 billion over 10 years. It provides for a 2013 start date to coincide with coverage expansion; it will be a conventional excise tax with full deductibility; and it will cover all product classes with the exception of retail products like contact lenses and possibly many diabetes supplies, including continuous glucose monitors, which we manufacture. The impact of the tax, we estimate, will be roughly $150 to $200 million on Medtronic annually beginning in 2013. We have no immediate plans to eliminate jobs at Medtronic as a result of the device tax or health care reform. We accept our shared fiscal responsibility for coverage expansion, and are very appreciative of our constituent members of Congress from Minnesota and Indiana, in particular, for having significantly tempered the size, distribution and timing of the tax.

In addition to the tax, the bill also includes some positive changes like uniform federal standards for disclosure transfers of value to physicians for product development and training, something Medtronic has long supported. Relationships between physicians and companies like ours help fuel innovation and advance patient care. Also, the new law calls for the creation of a national body to study and compare the clinical effectiveness of widely used medical therapies. This research is designed to help patients and health care practitioners better understand which therapies work best for which patients.

We will stay engaged as the new law is implemented to ensure our ability to remain innovative and shape our business and our therapies to compete in this new environment.

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Budget bill 1: How the gov candidates voted

Posted at 11:28 AM on March 29, 2010 by Tom Scheck (1 Comments)
Filed under: Campaign 2010, Campaign 2010: Minnesota Governor, MN Legislature

The Minnesota House passed a conference committee report this morning that cuts $312 million in state spending. It passed on 76-55. The debate was interesting since several Democrats, including gov candidate Tom Rukavina, criticized the cuts as too harsh while Republican gov candidate Tom Emmer said the cuts don't go far enough.

Here's how the candidates for governor voted on the bill in the House:

Democrats voting yes:
Margaret Anderson Kelliher

Democrats voting no:
Tom Rukavina, Paul Thissen

Republicans voting no:
Marty Seifert, Tom Emmer

Update:

DFL Sen. John Marty, who is running for governor, voted for the bill. It passed the Senate 44-23..

Update:

Pawlenty spokesman Brian McClung says he'll sign the bill:

"Our office reached an agreement with legislators over the weekend regarding the first budget bill. While the Governor would prefer the DFL present a complete solution, we can't force them to do it, so we're doing our best to work with what they're offering.

"As always, we will do a final review of the bill language, but as long as there are no unforeseen problems the Governor plans to sign the bill.

"Moving forward, the DFL should keep in mind that we're not going to raise taxes, so phases two and three are going to require significant additional cuts in order to balance the budget."

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Seven state lawmakers announce they're backing Rybak

Posted at 5:45 PM on March 29, 2010 by Tom Scheck
Filed under: Campaign 2010, Campaign 2010: Minnesota Governor

Democrat R.T. Rybak's campaign for governor announced today that seven DFL state lawmakers are backing Rybak for governor. DFL state Senators Jim Carlson, Kevin Dahle, John Doll, Mary Olson, Yvonne Prettner Solon and Kathy Sheran and DFL state Rep. Tina Liebling have signed up to support Rybak. All of the members live outside of the Minneapolis and St. Paul.

"We are supporting R.T. because we believe he is the right leader at the right time," Liebling said in the news release. "Maybe it's time to have a governor who's not so closely tied to the Capitol. It's time for a governor who's shown us he has the executive experience to really get results. It's time for a governor with R.T.'s ability to rally all Minnesota around a shared vision for our state."

Liebling's comments in Rybak's news release don't specifically name DFL House Speaker Margaret Anderson Kelliher, who is also running for governor, but there's no doubt where she's aiming. Rybak and Kelliher were the top two vote getters in the straw poll and most campaign staffers say Rybak and Kelliher have the most support. That being said, most delegates are still undecided.

DFL state Sen. John Marty and DFL state Reps. Tom Rukavina and Paul Thissen are the other DFL lawmakers running for governor who say they'll abide by the DFL endorsement.