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Survey: Updating reporting systems adds to cost of device tax

7:08 am by | 0 Comments

According to a recent AdvaMed survey, most device companies will need to upgrade their reporting systems to comply with the device tax.

AdvaMed members predict that the medical device tax will take an enormous toll in dollars and employees. A recent survey of 81 members shows that 62% are planning to lay off current employers or hire fewer new people. The survey results also show that the industry will have to spend anywhere from $400 to $667 million just to implement the tax.

Read the full survey here.

The respondents were from companies with less than $1 million in annual revenue up to more than $1 billion.

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Ninety percent of companies said their current technology was not enough to comply with the reporting and other record-keeping requirements of the tax. More than 50 percent said they would need completely new systems or major changes to existing ones. The Internal Revenue Service earlier this month released final regulations about how to collect the tax. The survey was done before the final regulations were released.

“While Washington talks about a fiscal cliff, this tax could push us off an innovation cliff, costing jobs and hurting our industry’s ability to find tomorrow’s treatments and cures,” said Stephen J. Ubl, president and CEO of AdvaMed.

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Veronica Combs

By Veronica Combs

I am the editor in chief at MedCityNews.com. I started writing and editing in the print world and joined a dotcom right before the 2000 crash. I was at TechRepublic/CNET/BNET for 7 years. Health was more interesting to me than the latest version of Windows, so I left for a startup tracking prescription drug news. A year later, MedTrackAlert was acquired by HealthCentral, so I shifted to audience research. The fun of daily news and interviewing smart people brought me to MedCity News in February 2012.
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