Minnesota delegation continues fight against medical device tax

There aren't many issues that unite the Minnesota congressional delegation, but the effort to get the medical device tax repealed is one of them.

The tax, part of the Affordable Care Act, went into effect in January. Republican Rep. Erik Paulsen and Democratic Sens. Amy Klobuchar and Al Franken say the 2.3 percent tax on companies like Medtronic and St. Jude Medical will cost jobs and stifle innovation.

From MPR News:

J.C. Scott, senior executive vice president of Advamed, the industry's trade group ... said the industry can't afford the $3 billion-a-year levy that helps subsidize health insurance for the uninsured. But medical device manufacturers don't support efforts to make the tax smaller.

"Our ultimate goal is still to have the tax fully wiped from the books," he said. "The tax is having a fundamentally negative impact on companies as they try to accommodate it in their operating budgets."

Topher Spiro, vice president for health policy at the Center for American Progress, said in The New York Times that the arguments to repeal the tax are misleading:

Not only can the medical-device industry easily afford the tax without compromising innovation, but the industry's enormous profits are a result of anticompetitive practices that themselves drive up medical-device costs unnecessarily. The tax is a distraction from reforms to the industry that are urgently needed to lower health care costs.

The medical-device industry faces virtually no price competition. Because of confidentiality agreements that manufacturers require hospitals to sign, the prices of the devices are cloaked in secrecy. This lack of transparency impedes hospitals from sharing price information and thus knowing whether they are getting a good deal.

On The Daily Circuit, we get an update on the repeal effort.

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