| There were not any easy choices in the Patient | | | | safer interventional products. The Edwards |
| Protection and Affordable Care Act ("PPACA")as | | | | Laboratory heart valve replacement through |
| amended by the Health Care and Education | | | | catheterization being tested by the FDA is such a |
| Affordability Reconciliation Act ("HCEAR"), except | | | | transforming device. |
| perhaps the opportunity to stick it to the perpetually | | | | The imposition of greater regulatory oversight and |
| tanned Rep. John Boehner (R.Ohio), by imposing a 10 | | | | the imposition of an excise tax that is expected to |
| percent excise tax on tanning salons using ultraviolet | | | | reduce manufacturer profits by a sixth could |
| lamps. The Congress did impose a 2.9 percent excise | | | | substantially restrict start up medical device company |
| tax on the sales of medical devices which is | | | | access to capital and substantially consolidate and |
| expected to raise $2OB in revenues to fund the | | | | compress the industry, not to mention limit public |
| expanded coverage of health care reform. (The | | | | access to medical innovation. The tax will go into |
| original proposal was for $40B.) (See section 9009 of | | | | effect in 2013 and will be imposed on everything |
| the PPACA and section 1405 of the HCEAR) In | | | | from defibrillators to bed pans. Fortunately some |
| addition new rules on proof of safety first and the | | | | medical products have been spared. Condoms, |
| implementation of "effective research" requirements | | | | eyeglasses, contact lenses, tampons and hearing aids |
| are expected to further raise the cost of doing | | | | are spared, but stents, valves, insulin pumps and the |
| business in the Medical Device field. | | | | like will be impacted. The industry will reap the benefit |
| One of the hallmarks of American health care has | | | | of greater coverage and therefore greater sales, but |
| been the speed at which innovation in medicine reach | | | | it is staring at its own looming excise tax "donut hole" |
| the market. Americans are early adaptors of new | | | | in its profits as American health care undergoes its |
| technology. The hunger for new cures and new | | | | overhaul. Expect a lot of lobbying to kill off this tax |
| technology has been a significant driver of health | | | | before 2013. |
| care costs as well as a spur to faster, better and | | | | |