Not all medical device folks eager to drink Kool-Aid on medical device tax

12:02 pm by | 3 Comments

You would think that a member group called Medical Devices Group would chime in unison about the horrors of the medical device tax.

But when you are talking about a 100,000-strong group, assuming homogeneity is a folly.

That appears to be what the owner of the 100,000+ Medical Devices Group on LinkedIn encountered  when he announced to the group last week that he had created a website called  no2point3 to repeal the 2.3 percent device tax. Joe Hage, a medical marketing communications expert, was looking to collect 25,000 signatures to get noticed by the White House.

Hage had intentionally wrapped the repeal of the tax in the rhetoric of red, white and blue, this being an election year, with a headline that said “Senators, don’t ship our jobs to China and crush our innovation with this $30.5 billion tax.” (Not sure where Hage got the $30.5 billion figure, but the tax is expected to raise $20 billion over a decade starting 2013.)

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Instead of a chorus of yes, you are right and a regurgitation of the industry talking points — this tax will kill jobs, kill innovation, outsource jobs to China — some members of the Medical Devices Group challenged the notion that the tax is a death knell to the industry.

Natalia Corona:

“Smaller meddevice companies will bankrupt.” … Really?  If our sales tax were increased 2.3%, would middle class citizens suddenly all be below the poverty line?

Frederick J. Thacher:

My My. The sky is falling. A major competitive issue with China production is the control of lending by Government banks and currency management.

Joe Zott:

I am not in favor of paying more taxes, but if your “smaller meddevice manufacturer” is a 2.3% tax from going out of business then I think they have bigger problems than this tax.

James Taylor:

Seem a little overblown. Looking at a history of varying taxes, the direct impact has usually been a proportional price change. This seems to be far less impact than recent changes in component costs, or overseas tariffs on export from manufacturing facilities. As for impact on R&D, the effect of rising expectations of investors and predatory financial tactics of the Bains of this world seem to be a much greater impact.

Good — No; Disaster — Doubtful.

And others chastised Hage for his tone:

Tulio Teixeira:

If you want to have good discussions on this group, I suggest you to approach them appropriately — 2.3% tax has very little to do with outsourcing. It’s not fun to be part of a group with (bad) “sale’s” pitch on the discussions board.

Michael Cumming:

I don’t like the tax but Joe’s unsubstantiated fear mongering does not to help. It just polarizes.

Larry Soldani:

What — I can’t even join a tech group without the political BS! Where were all these concerns about outsourcing of all our other technology jobs during the past 10 years?

Hage, for his part, took the criticism in good spirit. Here’s an edited version of two long responses he posted.

Joe Hage:

Of course, I would be foolish to attempt to please 107,000 people every time I express myself. I am responsible — and do not apologize — for my choice this morning. I unashamedly stand with the group majority against this punitive excise tax on revenues. I conceived and created http://no2point3.com to give members a way to act.

There’s no question: I did take a big risk this morning with a biased headline and approach. I don’t plan to make a habit of it.

Fair enough, but what about those signatures?

At last count, the online petition had received roughly 1,220 signatures in six days. At this pace, it will take another 122 days to get to 25,000. I wonder whether four months will be fast enough to bring this cow back into the barn.

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Arundhati Parmar

By Arundhati Parmar

Arundhati Parmar is the Medical Devices Reporter at MedCity News. She has covered medical technology since 2008 and specialized in business journalism since 2001. Parmar has three degrees from three continents - a Bachelor of Arts in English from Jadavpur University, Kolkata, India; a Masters in English Literature from the University of Sydney, Australia and a Masters in Journalism from Northwestern University in Chicago. She has sworn never to enter a classroom again.
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3 comments
Richard
Richard

The responses simply indicate that many members of this group do not have senior management or executive positions in the industry. It also indicates that many group members view the situation through a primarily ideological perspective. Time to exit this group.

Joe Hage
Joe Hage

Thanks for the coverage, Arundhati. I may have a few more tricks up my sleeve. Check the count again tomorrow at this time. :-)

John
John

There is a much more nuanced impact that the tax will have than just cutting into the bottom lines of med device companies. Ultimately, no matter what the layoffs or restructuring activities that occur, consumers will end up bearing the associated costs with the tax. Here's a good look at what is already being done by companies responding to the excise tax: http://bit.ly/HW6RmW