AdvaMed: Tax Will Stifle Medical Progress

Stephen J. Ubl, president and CEO of the Advanced Medical Technology Association (AdvaMed), issued the following statement in response to a draft health care reform proposal from Sen. Max Baucus, chairman of the Senate Finance Committee:

"AdvaMed supports broad-based health care reform that will ensure all Americans have access to quality, affordable health care. From the outset we have worked with congressional leaders and the White House to help achieve this important goal for our nation. However, our industry will vigorously oppose the proposed $40 billion tax on medical devices and diagnostics that is included in the draft reform proposal.

"This tax will raise the cost of care for all patients, especially those in greatest need of advanced treatments and diagnostics. It is a form of double taxation, since a portion of the hundreds of billions in cuts aimed at our customers, including hospitals, nursing homes, and home health care agencies will be passed on to us. Moreover, the tax will fall most heavily on the small and emerging companies that are the backbone of our industry, often driving development of cutting-edge treatments and cures, and are least able to pay new taxes. Additionally, the fee imposed on clinical labs raises serious concerns in view of other cuts to payments for lab services.

"There are better ways to reform the system than taxing countless products necessary to treat every patient who walks through the doors of a physician's office, hospital, or nursing home. The device and diagnostics industry supports comparative effectiveness research, value-based purchasing, preventive health, better care coordination and other measures to change the incentives in the health care system to focus on quality and efficiency.

"While AdvaMed supports broad-based health care reform and has been working to achieve that important goal, we cannot support a proposal that unfairly singles out the medical technology industry for a tax on innovation on top of the billions in cuts that the industry would already have to absorb within the health care reform proposal. We will continue to work with Congressional leaders and the White House to further real health reform and to eliminate this counterproductive proposal from any reform package considered by the Congress."