10.17.12
U.S. Rep. Erik Paulsen (R-Minn.), a long time opponent of the 2.3 percent medical device excise tax, recently pushed the Internal Revenue Service (IRS) to present its final rules on the tax during a hearing at the U.S. House of Representatives.
During the first week of September, the IRS promised to present its revision to Form 637, the application for registration dealing with excise taxes. At the House Ways and Means Subcommittee on Oversight hearing on implementing President Barack Obama’s healthcare reform law, Paulsen pointed out that the form includes taxes on gas guzzlers, tobacco and alcohol, illustrating that the “public policy rationale in the past for excise taxes has historically been to deter certain activities.” Paulsen went on to say, “The last thing we want to do is deter creation or innovation.”
IRS Deputy Commissioner Steven Miller explained that his duty was just to administer the law, not explain the reasons behind it.
The 2.3 percent tax is set to go into effect on Jan. 1. Paulsen wanted to know whether the tax agency had given any thought to the significantly elevated burden the IRS will face when the tax kicks in.
“Now that we’re moving forward to Jan. 1, these companies are laying off employees already. I want to make sure that we’re taking into account the paperwork,” Paulsen said.
“We’re working hard. We have proposed regulations out on the medical device tax and we’re working with the industry to make sure not to burden them and make sure they know the rules for compliance,” Miller replied.
“We continue to hear of American companies already beginning to lay off employees in anticipation of this dangerous new tax,” Paulsen said in prepared remarks. “We need to be doing everything we can to repeal this tax not only because the administration seems to be ill prepared for its implementation, but more importantly, because it will cost this nation valuable jobs in a valuable industry.”
AdvaMed (Advanced Medical Technology Association) President and CEO Stephen J. Ubl released a statement on the hearing:
“The medical device tax is one of the few IRS-administered provisions that goes into effect in 2013,” Ubl said. “Even apart from the destructive $30 billion economic burden of the tax, the mechanics of implementing it will be extremely challenging both for companies and for the IRS. It is vastly more complicated than a typical excise tax, and compliance by companies in our industry will be both costly and burdensome. We appreciate the IRS’s efforts to address our concerns regarding the implementation of this onerous tax, but simply put, the complexity and difficulty in developing these regulations underscores that an excise tax is a blunt and damaging instrument being applied to a highly innovative and dynamic industry.”
U.S. Rep. Ann Marie Buerkle (R-N.Y.) also was recently prompted to have her say due to Welch Allyn, a medical device manufacturer located in her upstate New York district, announcing extensive layoffs over the next year to compensate for the costs of the tax. She sent a letter to President Obama calling for action:
“As a result of the medical device tax, 275 people at Welch Allyn will be losing their job; 120 of which are from my district. During these challenging economic times the government should be implementing policies that help the economy grow jobs and keep American workers employed. The medical device tax is an egregious, misguided policy that damages the upstate New York economy and negatively affects our local community.
“This job-killing tax must be repealed. In June of this year the House passed H.R. 436, on a bipartisan basis, to repeal the medical device tax. However, the Senate has failed to take up the bill for consideration. I urge the Senate, and the President, to do the right thing on behalf of small businesses and join the House in repealing this onerous tax.”
CDRH Releases Report on Medical Device Postmarket Surveillance
The U.S. Food and Drug Administration’s (FDA) Center for Devices and Radiological Health (CDRH) has released a preliminary report entitled “Strengthening Our National System for Medical Device Postmarket Surveillance.” The report, which provides an overview of FDA’s medical device postmarket authorities and the current U.S. medical device postmarket surveillance system, proposes four specific actions, using existing resources and under current authorities, to strengthen the medical device postmarket surveillance system in the United States.
The CDRH was created to assure that patients and providers have timely and continued access to safe, effective, high-quality medical devices and safe radiation-emitting products; provide consumers, patients, their care givers and providers with understandable and accessible science-based information about the products it oversees; and facilitate medical device innovation by advancing regulatory science, provide industry with predictable, consistent, transparent, and efficient regulatory pathways, and assure consumer confidence in devices marketed in the United States.
“We believe that strengthening our National Medical Device Surveillance System will complement the improvements we have made to our premarket program,” reads the report. “A medical device postmarket surveillance system should quickly identify poorly performing devices, accurately characterize and disseminate information about real-world device performance, including the clinical benefits and risks of marketed devices, and efficiently generate data to support premarket clearance or approval of new devices and new uses of currently marketed devices.”
This report follows closely on the heels of the proposed plan for unique device identifiers (UDIs) and a plan proposing criteria for better determining the completeness of 510(k) clearance applications. These rapid-fire improvements and changes FDA is making are a result of the passage of the latest version of the Medical Device User Fee & Modernization Act by federal lawmakers. The agency promised to speed up review processes in exchange for the hiked user fees companies would be paying.
“A key part of this mission,” FDA writes on its website, “is to monitor medical devices and radiological products for continued safety and effectiveness after they are in use and to help the public get the accurate, science-based information they need to improve their health.”
The four key points the latest report touches on are: the UDI plan; promoting the development of national and international device registries for selected products; modernizing adverse event reporting and analysis; and developing and using new methods for evidence generation, synthesis and appraisal.
Minnesota Lawmakers Remain at Forefront of Medical Device Discussions
Being one of the states most dependent upon the manufacture and sale of medical devices for its economy, Minnesota has been deeply invested in the laws and legislation being passed in Washington, D.C., regarding medical device regulation and taxation. In August, U.S. senators from Minnesota Amy Klobuchar and Al Franken, both Democrats, met with U.S. Food and Drug Administration (FDA) Commissioner Margaret Hamburg to discuss how the state might be able to speed up approval processes and create more medical device sales jobs.
The senators pressed Hamburg for reforms that will encourage innovation and job growth in Minnesota, which is home to a number of major medtech players such as Medtronic Inc. and St. Jude Medical Inc.
“Minnesota’s innovative medical device industry not only creates tens of thousands of well-paying jobs in our state, but also produces internationally respected life-saving devices,” Franken said. “Today’s meeting was a great opportunity for the FDA to get a better understanding of the hurdles our companies often face when trying to bring their lifesaving products to market in the quickest, safest way possible.”
Both senators have made it an important part of their platform to fight specifically for medical device businesses in Minnesota, especially startups. “Over the past few years the FDA’s regulation has become increasingly longer and more difficult, delaying, and in some cases preventing, new and innovative devices from reaching the market,” Klobuchar explained. “That is why I introduced bipartisan legislation—the Medical Device Regulatory Improvement Act—that would help streamline the FDA’s regulation of medical devices by clarifying FDA’s current least burdensome requirements. Key provisions of this bill to promote innovation and help get new, lifesaving products to the market quicker without compromising patient safety were signed into law in July 2012.”
The Senators praised the FDA’s Safety and Innovation Act, which was signed into law in July and helps streamline the regulatory process for medical device sales approval. The Act gives the FDA the authority to collect user fees from industry to fund reviews of various products, including medical devices, thereby making review times faster and more efficient.
“Support for FDA user fees is a testament to the important role FDA plays in America’s healthcare continuum,” Hamburg said when the bill was passed. “FDA’s medical product decisions sit at the intersection of public health, innovation, and commerce, and touch the lives of nearly every American every day.”
The full impact of the bill will likely not be felt across the industry for another five to six years, and that is driving states with a vested interest in the industry to keep the pressure on regulatory officials.
During the first week of September, the IRS promised to present its revision to Form 637, the application for registration dealing with excise taxes. At the House Ways and Means Subcommittee on Oversight hearing on implementing President Barack Obama’s healthcare reform law, Paulsen pointed out that the form includes taxes on gas guzzlers, tobacco and alcohol, illustrating that the “public policy rationale in the past for excise taxes has historically been to deter certain activities.” Paulsen went on to say, “The last thing we want to do is deter creation or innovation.”
Rep. Erik Paulsen speaks about a repeal of the medical device tax in Washington, D.C., on June 7, 2012. Photo credit: Brett Neely, Minnesota Public Radio |
Rep. Ann Marie Buerkle at a press conference on Aug. 6. Photo credit: Robert Harding, The Citizen. |
IRS Deputy Commissioner Steven Miller explained that his duty was just to administer the law, not explain the reasons behind it.
The 2.3 percent tax is set to go into effect on Jan. 1. Paulsen wanted to know whether the tax agency had given any thought to the significantly elevated burden the IRS will face when the tax kicks in.
“Now that we’re moving forward to Jan. 1, these companies are laying off employees already. I want to make sure that we’re taking into account the paperwork,” Paulsen said.
“We’re working hard. We have proposed regulations out on the medical device tax and we’re working with the industry to make sure not to burden them and make sure they know the rules for compliance,” Miller replied.
“We continue to hear of American companies already beginning to lay off employees in anticipation of this dangerous new tax,” Paulsen said in prepared remarks. “We need to be doing everything we can to repeal this tax not only because the administration seems to be ill prepared for its implementation, but more importantly, because it will cost this nation valuable jobs in a valuable industry.”
AdvaMed (Advanced Medical Technology Association) President and CEO Stephen J. Ubl released a statement on the hearing:
“The medical device tax is one of the few IRS-administered provisions that goes into effect in 2013,” Ubl said. “Even apart from the destructive $30 billion economic burden of the tax, the mechanics of implementing it will be extremely challenging both for companies and for the IRS. It is vastly more complicated than a typical excise tax, and compliance by companies in our industry will be both costly and burdensome. We appreciate the IRS’s efforts to address our concerns regarding the implementation of this onerous tax, but simply put, the complexity and difficulty in developing these regulations underscores that an excise tax is a blunt and damaging instrument being applied to a highly innovative and dynamic industry.”
U.S. Rep. Ann Marie Buerkle (R-N.Y.) also was recently prompted to have her say due to Welch Allyn, a medical device manufacturer located in her upstate New York district, announcing extensive layoffs over the next year to compensate for the costs of the tax. She sent a letter to President Obama calling for action:
“As a result of the medical device tax, 275 people at Welch Allyn will be losing their job; 120 of which are from my district. During these challenging economic times the government should be implementing policies that help the economy grow jobs and keep American workers employed. The medical device tax is an egregious, misguided policy that damages the upstate New York economy and negatively affects our local community.
“This job-killing tax must be repealed. In June of this year the House passed H.R. 436, on a bipartisan basis, to repeal the medical device tax. However, the Senate has failed to take up the bill for consideration. I urge the Senate, and the President, to do the right thing on behalf of small businesses and join the House in repealing this onerous tax.”
CDRH Releases Report on Medical Device Postmarket Surveillance
The U.S. Food and Drug Administration’s (FDA) Center for Devices and Radiological Health (CDRH) has released a preliminary report entitled “Strengthening Our National System for Medical Device Postmarket Surveillance.” The report, which provides an overview of FDA’s medical device postmarket authorities and the current U.S. medical device postmarket surveillance system, proposes four specific actions, using existing resources and under current authorities, to strengthen the medical device postmarket surveillance system in the United States.
The CDRH was created to assure that patients and providers have timely and continued access to safe, effective, high-quality medical devices and safe radiation-emitting products; provide consumers, patients, their care givers and providers with understandable and accessible science-based information about the products it oversees; and facilitate medical device innovation by advancing regulatory science, provide industry with predictable, consistent, transparent, and efficient regulatory pathways, and assure consumer confidence in devices marketed in the United States.
“We believe that strengthening our National Medical Device Surveillance System will complement the improvements we have made to our premarket program,” reads the report. “A medical device postmarket surveillance system should quickly identify poorly performing devices, accurately characterize and disseminate information about real-world device performance, including the clinical benefits and risks of marketed devices, and efficiently generate data to support premarket clearance or approval of new devices and new uses of currently marketed devices.”
This report follows closely on the heels of the proposed plan for unique device identifiers (UDIs) and a plan proposing criteria for better determining the completeness of 510(k) clearance applications. These rapid-fire improvements and changes FDA is making are a result of the passage of the latest version of the Medical Device User Fee & Modernization Act by federal lawmakers. The agency promised to speed up review processes in exchange for the hiked user fees companies would be paying.
“A key part of this mission,” FDA writes on its website, “is to monitor medical devices and radiological products for continued safety and effectiveness after they are in use and to help the public get the accurate, science-based information they need to improve their health.”
The four key points the latest report touches on are: the UDI plan; promoting the development of national and international device registries for selected products; modernizing adverse event reporting and analysis; and developing and using new methods for evidence generation, synthesis and appraisal.
Minnesota Lawmakers Remain at Forefront of Medical Device Discussions
Being one of the states most dependent upon the manufacture and sale of medical devices for its economy, Minnesota has been deeply invested in the laws and legislation being passed in Washington, D.C., regarding medical device regulation and taxation. In August, U.S. senators from Minnesota Amy Klobuchar and Al Franken, both Democrats, met with U.S. Food and Drug Administration (FDA) Commissioner Margaret Hamburg to discuss how the state might be able to speed up approval processes and create more medical device sales jobs.
The senators pressed Hamburg for reforms that will encourage innovation and job growth in Minnesota, which is home to a number of major medtech players such as Medtronic Inc. and St. Jude Medical Inc.
“Minnesota’s innovative medical device industry not only creates tens of thousands of well-paying jobs in our state, but also produces internationally respected life-saving devices,” Franken said. “Today’s meeting was a great opportunity for the FDA to get a better understanding of the hurdles our companies often face when trying to bring their lifesaving products to market in the quickest, safest way possible.”
Both senators have made it an important part of their platform to fight specifically for medical device businesses in Minnesota, especially startups. “Over the past few years the FDA’s regulation has become increasingly longer and more difficult, delaying, and in some cases preventing, new and innovative devices from reaching the market,” Klobuchar explained. “That is why I introduced bipartisan legislation—the Medical Device Regulatory Improvement Act—that would help streamline the FDA’s regulation of medical devices by clarifying FDA’s current least burdensome requirements. Key provisions of this bill to promote innovation and help get new, lifesaving products to the market quicker without compromising patient safety were signed into law in July 2012.”
The Senators praised the FDA’s Safety and Innovation Act, which was signed into law in July and helps streamline the regulatory process for medical device sales approval. The Act gives the FDA the authority to collect user fees from industry to fund reviews of various products, including medical devices, thereby making review times faster and more efficient.
“Support for FDA user fees is a testament to the important role FDA plays in America’s healthcare continuum,” Hamburg said when the bill was passed. “FDA’s medical product decisions sit at the intersection of public health, innovation, and commerce, and touch the lives of nearly every American every day.”
The full impact of the bill will likely not be felt across the industry for another five to six years, and that is driving states with a vested interest in the industry to keep the pressure on regulatory officials.