One such company, Medtronic, which just happens to be the world’s largest producer of devices, has recently purchased a factory in China. With the flux of manufacturers moving out of the country, it’s only a matter of time before the United States not only loses money because of this tax, but loses innovators in the field, as well.
Spine Wave, a spinal device company, can’t break even, and expects massive losses due to the excise tax on its products and thus, its revenue.
If these companies struggle to make up for their losses in sales, they’ll have to funnel funds from areas such as R&D, thus stymying innovation and the potential for invention of new medical devices. For healthcare CEOs like me, this is a major systemic threat to our ability to innovate and save lives.
Furthermore, the taxes aren’t on the profit a company makes – this means that companies like Spine Wave may lose money, but still owe taxes. This can only lead to the shutdown of medical device manufacturers who can’t deal with the overhead.
