Device Tax Devastating To Medical Device Companies

The health care bill under debate in Washington and around the country includes a $40 Billion excise tax on sales of products developed and sold by medical device companies. This innovation tax is a key component of the current plan, and if implemented will be devastating to the medical device industry.

Many medical device entrepreneurs are forming a lobbying group called Entrepreneurs for the Advancement of Medical Innovation, (EAMI). I will consider joining this group because of its focus on this critically important topic.

We have excellent medical products in this country, which are developed by engineers, medical doctors, and many others searching for better solutions to our health needs. Many of these products require long development paths. They are subject to rigorous review and approval by the FDA, whose regulatory process includes costly clinical trials designed to demonstrate product safety and efficacy. Our health care system is dependent on new product development and product innovation, and our country is stronger as a result of the activities of many of these device companies.

Our own company, Silere Medical Technology, was formed to develop prosthetic devices focused on disorders of the auditory processing system. Our initial objective is the suppression of chronic, debilitating tinnitus. The development process for this device will require many years of research, clinical trials, and patient monitoring. It will require a great deal of venture financing before we can market our first commercial product.

Many people, including the entrepreneurs involved in founding the company, are investing time and resources to ensure a successful start. To be burdened by an excise tax when we first go to market would stall our progress, and take much needed capital away from our further research and development efforts.

My recommendation to the Obama administration is to consider the negative impact this tax will have on the development of future products, and remove the related language from the bill under consideration. Without the tax, our industry can continue innovate, which will positively impact the health care and quality of life of patients in the USA and around the globe.