The medical device industry has been exporting jobs for decades and will always do so when this benefits their bottom line. Look at the explosion of device companies in Ireland over the last 20 years. The same is now occurring in Costa Rica. It’s easy to attribute this to the device tax but the reality is these companies have always exported jobs.

He is correct that there will probably be a minimal windfall with respect to the increased number of covered patients. But this does drastically help the system. The uninsured patients he cited were going to get therapy to the detriment of the hospital that had to take the loss. By having these patients covered, ER visits should decrease and the costs to the systems should decrease. As part of the ACA negotiations, all impacted parties (hospitals, physicians, pharma) except the device industry offered concessions to help fund the program. Because they all knew the punitive option would be worse – like a tax on revenue.

A great deal of innovation comes from the venture backed start-up environment. These companies are rightfully more concerned about FDA policies since their revenue is usually negligible before being acquired. Innovation in big companies is a function of ROI. They will continue to spend a dollar on R&D if they can get significantly more than a dollar in revenue. With gross margins of 65% – 70%, investment will continue.

The reality is companies like Boston Scientific, Cook, J&J, Medtronic, Stryker and Zimmer charge up to twice as much for their devices in the US as they do in the rest of the world (except Japan). Are the device companies gauging the US tax payer? Perhaps the ACA should have requested all devices to be priced at the same price for the best customers in Europe?

In an environment where medical device sales reps make up to $500K (rhythm management, spine devices) and device executives make millions a year, there is probably an opportunity to offset at the top. A quick look at Edwards Lifescience shows the top five executives’ 2011 compensation was over 3% of revenue. Everyone tells the government to cut the fat. Perhaps the medical device companies can do the same.

One question for Mr. Hawkins and his peers: what’s the right answer if the device tax is the wrong answer? We have a broken system and responsible participants and beneficiaries will provide solutions. Pharma, hospitals and physicians have proposed fixes. Where’s the device industries solution?

Boston Scientific’s Political Action Committee sends emails to all employees to vote against specific elected officials who voted for the healthcare act. Many BSC top executives have a history of contributing to conservative Republican candidates.