Why Do People Hate the Medical Device Tax so Much?

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Sept. 30 (Bloomberg) –- Bloomberg’s Michael Manns discusses bi-partisan support for a medical device tax repeal. He speaks with Stephanie Ruhle and Erik Schatzker on Bloomberg Television’s “Market Makers.” (Source: Bloomberg)


Our bloomberg industry analysts covers medical care.

Can you tell us whether a repeal is being priced in or not?

In many cases, you've seen medical device company stocks do well this year.

There are a number of things that may end up eating involved with that but part of the idea is that the medical device tax may end up being repealed at some point.

Why do people hate it so much ? is it just because the medical devices industry has done a good job of lobbying democrats and republicans or is there something about the way it was conceived that does not make good sense?

It is very seldom that you end up finding taxes on specific industries.

The cause of that, there are number of people taking a look at medical device industries as innovators with an american industry.

Anything that end up taxing innovation doesn't end up eating well.

This is another one of those instances where you have an industry that permeates the entire globe.

Why tax it?

Why aren't investors concerned at all?

We just had the extraordinary run of these companies have had this year and investors aren't they?

Two different things.

One is the idea that there is bipartisan support for a medical device tax repeal.

There are some senators in the next round in the 2014 election that would end up being impacted if there are layoffs associated with the medical device industry.

More and more there seems to be an idea about a medical device tax repeal.

The idea that more and more medical devices would be used as part of health reform is more people end up getting insurance at more of these people may end up going at using these medical devices as part of the therapy.

What companies are affected?


jude medical, companies that make cardiovascular devices.

Stryker and simmer that make orthopedic devices.

Ultimately, the question is how damaging could such a tax be?

Orthopedic implants, for example, many of them are a must have.

It's simply not going to get an artificially because there is a 2.3% tax?

Absolutely not.

Once they end up going ahead, the counterbalances the idea what could we use that 2.3% for?

We could use it for research and development.

But are we going to use it for that?

It's a great idea.

That is the argument of the medical device industry.

In real fairness, what has happened as most of these companies have restructured and had the chance to take a look at what the impact could be there and decided to reduce workforce or work more efficiently to offset those taxes.

At the end of the day, much of this has been accounted for by the companies proactively restructuring to provide an offset.

Thank you for being here and

This text has been automatically generated. It may not be 100% accurate.


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