Buyer's remorse over medical device tax

By Greg Sorensen, M.D., chief executive officer, Siemens Healthcare North America - 03/26/13 12:15 PM ET

There appear to be a few glimmers of constructive activity in Washington, D.C. Last week, the Senate moved the ball forward on an issue that is extremely important to innovation and jobs in the United States. By passing an amendment to repeal the medical device tax by an overwhelming 79-20 votes, the Senate has done the right thing for patients and the U.S. economy.
The United States Senate has now joined a bipartisan majority of the House of Representatives calling to repeal the 2.3 percent medical device excise tax that has already damaged the U.S. economy and claimed thousands of jobs.

The American medical technology industry is responsible for and supports nearly two million jobs, creating a growing trade surplus and developing the technology essential to advancing patient care in the United States and around the world. However, since the January 1 implementation of the medical device tax, manufacturers have already paid an estimated $388,000,000 to the Internal Revenue Service (IRS) so far this year, redirecting funds that could otherwise be directed towards investment in things like job creation and research and development.
The impact of these semi-monthly payments to the IRS is being felt far and wide. Every day, innovators in this dynamic industry work hard to improve the quality of life for patients by developing the next frontier of life-saving medical devices and imaging technologies. Meanwhile, the companies that manufacture these cutting-edge diagnostic and therapeutic tools are improving the health of the U.S. economy by supporting hundreds of thousands of jobs. From the physician reviewing a CT scan, to the technician performing a procedure, to the factory worker assembling a machine, the medical imaging and devices industry is an essential engine of economic growth.
The clock is ticking in Washington, and the tax continues to impact high-quality jobs and investments in tomorrow’s treatments and cures at companies large and small across the country. Repeal is critical in order to give this industry – and the thousands of Americans it employs – a much-deserved second chance.
Given the negative effects of the medical device tax, it’s not surprising that Republicans and Democrats in both the House and Senate are exploring alternatives. Fortunately, the 79-20 vote on Thursday is an important step towards reversing course and ensuring that the United States remains the global leader in medical technology innovation.

Sorensen is  chief executive officer of Siemens Healthcare North America and chairman of the MITA Board of Directors.

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U.S. Senate may back symbolic repeal of medical device tax

WASHINGTON, March 21 (Reuters) - Opponents of a 2.3 percent tax on medical device companies will likely win passage this week in the U.S. Senate of a largely symbolic resolution calling for repeal of the tax, with some Democrats likely to join all Republicans.

The tax helps to fund President Barack Obama's 2010 healthcare law. It applies to a range of medical products - from bedpans to expensive heart devices - many manufactured in the home states of the senators backing the repeal.

The resolution calling for repeal will be symbolic because it will come in the form of a non-binding amendment to a non-binding budget measure drafted by Senate Democrats. The resolution would not actually repeal the tax.

Full repeal of the tax may be difficult to achieve, given its $30 billion price tag and the opposition of key Senate Democrats, including Majority Leader Harry Reid.

"The industry has a fighting chance of getting the tax moderated or eliminated as part of a much larger tax reform bill, where the device levy becomes a rounding error," said Paul Heldman, a policy analyst at Potomac Research Group. "But major tax reform in this Congress is a long shot."

Nine Senate Democrats are signed up to back the symbolic amendment. More than a dozen Senate Democrats wrote to Reid last year seeking to delay the tax.

Reid does not support repeal. Nor does Senate Finance Committee Chairman Max Baucus, who helped usher Obama's healthcare bill into law. The medical device tax is among several new industry levies in the healthcare overhaul law, which aims to provide health insurance for millions of Americans who lack it.

The law is being implemented. It was declared constitutional by the U.S. Supreme Court last year.

The medical device tax, which went into effect this year, is projected to raise about $30 billion over a decade. That government revenue would be lost if the tax were repealed.

Democratic Senators from Minnesota, Indiana and Pennsylvania, where some big medical technology companies are based, are among those who have been pushing for a repeal.

Industry officials and lawmakers against the tax say it will hurt innovation and job creation.

(Reporting by Kim Dixon; Editing by Kevin Drawbaugh and Jan Paschal)

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Medical device maker Cytori Therapeutics loses approval fight

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U.S. Senate may back symbolic repeal of medical device tax

WASHINGTON, March 21 (Reuters) - Opponents of a 2.3 percent tax on medical device companies will likely win passage this week in the U.S. Senate of a largely symbolic resolution calling for repeal of the tax, with some Democrats likely to join all Republicans.

The tax helps to fund President Barack Obama's 2010 healthcare law. It applies to a range of medical products - from bedpans to expensive heart devices - many manufactured in the home states of the senators backing the repeal.

The resolution calling for repeal will be symbolic because it will come in the form of a non-binding amendment to a non-binding budget measure drafted by Senate Democrats. The resolution would not actually repeal the tax.

Full repeal of the tax may be difficult to achieve, given its $30 billion price tag and the opposition of key Senate Democrats, including Majority Leader Harry Reid.

"The industry has a fighting chance of getting the tax moderated or eliminated as part of a much larger tax reform bill, where the device levy becomes a rounding error," said Paul Heldman, a policy analyst at Potomac Research Group. "But major tax reform in this Congress is a long shot."

Nine Senate Democrats are signed up to back the symbolic amendment. More than a dozen Senate Democrats wrote to Reid last year seeking to delay the tax.

Reid does not support repeal. Nor does Senate Finance Committee Chairman Max Baucus, who helped usher Obama's healthcare bill into law. The medical device tax is among several new industry levies in the healthcare overhaul law, which aims to provide health insurance for millions of Americans who lack it.

The law is being implemented. It was declared constitutional by the U.S. Supreme Court last year.

The medical device tax, which went into effect this year, is projected to raise about $30 billion over a decade. That government revenue would be lost if the tax were repealed.

Democratic Senators from Minnesota, Indiana and Pennsylvania, where some big medical technology companies are based, are among those who have been pushing for a repeal.

Industry officials and lawmakers against the tax say it will hurt innovation and job creation.

(Reporting by Kim Dixon; Editing by Kevin Drawbaugh and Jan Paschal)

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American Epidemic: Rise In Diabetes Rate Is The ‘Main Driver’ Of Increased U.S. Medical Costs

The reality of America’s obesity and diabetes epidemics and their resulting effects on national health care costs have been well-established — and on Thursday, a new report revealed that the public health crisis has gotten even worse in the last decade.

According to the report by the American Diabetes Association (ADA), direct and indirect health care costs associated with diabetes rose from $174 billion in 2007 to $245 billion in 2012 — an increase of 41 percent over 5 years. Only a little bit of that can be attributable to general medical inflation, which has actually been slowing down in the last couple of years. The sheer scope of the increase indicates that more and more Americans are falling prey to the disease — and it’s taking a clear toll on U.S. health care spending:

“As the number of people with diabetes grows, so does the economic burden it places on this country,” [said ADA's Chief Scientific & Medical Officer, Robert Ratner, in a statement.]

The study finds that medical expenditure for people with diabetes is about 2.3 times higher than for people who don’t have the disease and that the main driver of the increased overall financial burden on the country is the rise in proportion of the population that has the disease.

“The cost of diabetes is rising at a rate higher than overall medical costs with more than one in 10 health care dollars in the country being spent directly on diabetes and its complications, and more than one in five health care dollars in the US going to the care of people with diagnosed diabetes,” says Ratner.

Diabetes and obesity-related illnesses tend to disproportionately affect populations that are also on government-subsidized health programs — especially low-income Americans — and made up anywhere between 10 and 12 percent of all health insurance spending back in 2006. Considering the new report’s findings, that number has probably ballooned further. The study found that 64 percent of diabetes-related care, specifically, was funded by Medicare, Medicaid, and military health care programs.

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Three Problems Contributing To Americans’ Sky High Medical Bills — And Three Ways To Fix Them

This week’s issue of Time Magazine takes a deep dive into Americans’ medical bills and the roots of the U.S. health care industry’s rampant inflation — costs that force one in four American seniors into bankruptcy and over one in three Americans to forgo care.

The investigative piece highlights the exorbitant costs of the most commonplace procedures and medications, and how insurance coverage often falls through for Americans who encounter unaffordable out-of-pocket costs due to the rising price of health care technology and services. Furthermore, it is often impossible for patients to ascertain why they are being charged what they are for care — a pricing opacity that is truly unique to the service-centered health care industry. Here are the three biggest takeaways from the Time exposé on the unsustainable foundations of American health care costs — and some ideas for shifting the U.S. medical landscape towards a more equitable system:

The indefensible costs of medical testing, technology, and drugs. Much of the report focuses on the costs of receiving basic care and testing, such as diabetes tests, drawing blood samples, or even taking plain old Tylenol — which one hospital in the report marked up to $1.50 per pill, approximately 100 times its general market price, for a cancer patient. Hospitals are largely able to get away with this because they are, as the article puts it, “sellers in what is the ultimate seller’s market,” so device manufacturers, pharmaceutical companies, and hospital chains — even technically “nonprofit” ones — are free to run up the tabs on Americans’ care. Use market competition and price negotiations to lower costs. In its Senior Protection Plan, the Center for American Progress (CAP) advocates tying relatively low Medicare drug rebates to more generous Medicaid drug rebates, and enforcing competitive bidding for all health care products in both the public and private sectors, as well as intrastate price negotiations in the private medical sector that constrains annual spending to a predesignated cap. All told, such reforms would reduce American health care spending by at least $180 billion.People usually don’t know why they get charged what they do for care. It’s a common mantra among health care reform advocates — America doesn’t have a health care system, it has a sick care system. Services are charged after the fact, often in the form a hefty, inscrutable bill that tells patients very little about why they are being asked to pay tens of thousands of dollars in order to receive care that can mean the difference between life and death. This opacity allows providers to get away with jacking up the price of services even as medical technology makes huge strides — which should theoretically lower costs. One GAO report states that “the lack of price transparency and the substantial variation in amounts hospitals pay for some IMD [implantable medical devices] raise questions about whether hospitals are achieving the best prices possible.”Make hospitals issue easily understandable receipts for all health care services.This is a relatively simple fix that would help facilitate further cost reductions by rooting price negotiations in easily-available, verifiable, and uniform data. As the CAP health policy team’s Topher Spiro states in an email to ThinkProgress, “We propose full price transparency—so it wouldn’t take a seven month investigation by a reporter to find out what prices are being charged.” The best possible outcome would be for hospitals and insurers to provide a comprehensive list of services to all patients and beneficiaries that let Americans know exactly how much a particular disease treatment or procedure will cost them.Americans get care at expensive hospital chains that don’t necessarily provide the best service. As Time’s article points out, national and multi-national hospital chains rule the American medical industry — but that doesn’t mean they provide the cheapest, highest quality, or most efficient care. For instance, at the Texas giant MD Anderson, hospital administrators charged Sean Recchi over ten times as much for a chest x-ray as they would have been reimbursed by Medicare, which is required by law to approximate the price of services rendered. Why? Because Sean Recchi had subpar private insurance, and MD Anderson could get away with it.Encourage patients to visit high-performing hospitals with insurance incentives. Americans might believe that such hospitals are their only recourse — but that doesn’t have to be true. One approach to encouraging providers to provide more efficient, quality, and affordable care would be the creation of tiered insurance plans that reward patients — through lower premiums and deductibles — who use low-cost, high-quality hospitals for their care instead of the highest-cost brand name hospitals.

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Industry and EU clash over medical devices regulation

* Europe revisits rules after breast, hip implant scandals

* Manufacturers fear new regulations will delay approvals

* Debate centres on overhauling decentralised EU system

LONDON, Feb 20 (Reuters) - One year on from a breast implant scandal that shook confidence in Europe's light-touch system for regulating medical devices, lawmakers and manufacturers are at loggerheads on ways to protect patients from shoddy products.

Companies that make implantable devices such as new hips and heart stents accept the need for change to the current set-up but oppose a radical overhaul, arguing that would delay the launch of new devices by years and stifle innovation.

The European Commission, the bloc's executive arm, has proposed a new level of scrutiny, and some members of the European Parliament want a whole new system of pre-market approval that would raise the bar still further.

National governments also take differing positions, with France arguing EU laws must be "radically redrafted", while Britain opposes big changes.

The issue will come to a head at a European Parliament committee on Feb. 26, where officials, industry leaders and doctors' representatives will argue over the way forward.

Dagmar Roth-Behrendt, the German lawmaker chairing the panel, is convinced Europe needs a more rigorous system for testing medical devices before they are approved.

"We absolutely need that," she told Reuters. "We don't need it for every medical device, but for certain medical devices, without any doubt, we need a more stringent prior authorisation system."

Like some top doctors, she believes the current system built on around 80 Notified Bodies - mainly private firms scattered across Europe - is simply not up to the job.

Panos Vardas, president of the European Society of Cardiology, said there were "major deficiencies" in the current system and a more coordinated approach was vital. Cardiologists are big users of medical devices, ranging from stents that prop open arteries to pacemakers and artificial heart valves.

The negotiation process between governments, parliament and the Commission is likely to be lengthy, and new legislation may not come into force across the EU until as late as 2019.

NEEDLE IN HAYSTACK

Critics say Europe's weak regulation is partly to blame for allowing France's Poly Implant Prothese (PIP) to manufacture for up to a decade substandard silicone breast implants that were used by hundreds of thousands of women around the world.

But EU trade group Eucomed, representing some 22,500 device companies, argues no system could stop a fraud like PIP. It also questions whether a different regime would have stopped risky metal-on-metal hip implants reaching the market, given such hips were also approved under the more stringent U.S. system.

A key debate is whether Europe should shift to a centralised system as in the United States, potentially by folding devices regulation into the European Medicines Agency (EMA).

EMA boss Guido Rasi, who will address the Feb. 26 meeting, said in an interview last year there was an "urgent need" to regulate devices as tightly as drugs, although whether the EMA should play a role was up to politicians.

That notion alarms Eucomed's CEO Serge Bernasconi.

"If Europe were to switch to a centralised system, we expect that, once the new system is up and running, patients will experience a 3-5 year unnecessary delay in receiving medical devices compared to today's situation," he said.

And getting such a system up to speed could cause an additional delay of one or two years, he added, undermining Europe's leading position in devices innovation.

An analysis by Boston Consulting Group last year found high-tech medical devices were, on average, made available in Europe 43 months before reaching the U.S. market.

The European Commission's answer is to reform the current decentralised system by allowing a new Medical Device Coordination Group to request additional assessments - such as longer or larger clinical trials - for some so-called "Class III", or high-risk, devices.

Manufacturers, however, fear this approach will be random and akin to looking for "a needle in a haystack", with little chance of picking up problems.

Major makers of medical devices include Johnson & Johnson , Medtronic, Boston Scientific, Abbott , Allergan and Smith & Nephew.

The industry backs the Commission's goal of improving standards at Notified Bodies, but would rather this was done by selecting only the best ones to approve higher risk devices, rather than introducing an extra layer of scrutiny.

More than 500,000 medical devices are sold in the EU, ranging from bandages, dentures and wheelchairs to pacemakers.

They are regulated under the Conformite Europeenne system, which is also used for gadgets like toasters, though getting a "CE mark" for a medical device is tougher than for such household appliances.

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UPDATE 3-Hospira gets FDA notice over medical device problems

* Rocky Mount plant back to capacity in 2013 -Hospira

* Q4 adjusted eps 55 cents vs Street view 54 cents

* Expects 2013 sales up 1 pct to 3 pct, adjusted diluted eps of $2.05-$2.20

Feb 13 (Reuters) - Hospira Inc, a hospital products maker that has grappled with regulatory issues at manufacturing plants for the past 18 months, said it had received a notice over the quality of its medical devices from the U.S. Food and Drug Administration.

The company reported the notice during a conference call on Wednesday after announcing a profit for the fourth quarter vs a year-earlier loss as sales of generic injectable drugs, IV solutions, drug pumps and other products increased more than 8 percent.

Hospira said the FDA completed an inspection of its medical device quality systems at its headquarters in Lake Forest, Illinois, last month and issued a list of 10 objectionable conditions. The list is known in the industry as a Form 483.

Some of the quality systems assessed as part of the Lake Forest inspection included supplier quality systems and medical device reporting and complaint systems, a Hospira spokeswoman said.

The company also said it sent notices to customers about some of its infusion pumps that had to either be recalled, fixed or adjusted.

Hospira has sent out 11 device notifications so far in 2013, including recall and device corrections, the spokeswoman said.

"While there may still be additional device field notifications going forward, we do not believe they will continue at the rate we have seen recently," she said in an email.

Shares in Hospira fell $2.05 to $32.90 in afternoon trading on the New York Stock Exchange.

Chief Executive F. Michael Ball said that FDA inspectors acknowledged some progress since the last inspection.

"The observations re-enforced our own assessment there is still a lot of work to be done within our device operations," Ball said on the conference call.

He said management had been doing a complete review of all of its medical devices even before the FDA notice. He said the new strategy would be aimed at modernizing and streamlining platforms.

Ball said there has been progress at some of its other manufacturing facilities that have had problems, including its Rocky Mount facility in North Carolina. Ball said a reinspection by the FDA would be extensive and lengthy but he expects it increase production this year.

He said Hospira's other plants emerged from shut downs on schedule.

Hospira's Clayton, North Carolina facility has resumed manufacturing propofol, an anesthesia that is administered intravenously and has been in short supply, and is building inventory in the fourth quarter of 2012 for an early 2013 relaunch.

He said the drug was being priced at a premium.

Hospira said it expects sales to rise 1 percent to 3 percent for 2013, and adjusted earnings per diluted share to be between $2.05 and $2.20.

Management said the relatively wide range is based on the expected rate of supply recovery and share gains, as well as improvements in quality and manufacturing performance.

In the fourth quarter, its net income was $5.3 million, or 3 cents per share, in the latest quarter, compared with a net loss of $214.0 million, or $1.30 per share, in the year-earlier period.

Adjusted earnings were 55 cents per share. On that basis, analysts on average were expecting earnings per share of 54 cents.

Net sales rose to $1.1 billion in the quarter from $1.0 billion a year before.

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UPDATE 2-Hospira receives FDA notice over medical device problems

* Rocky Mount plant back to capacity in 2013 - Hospira

* Q4 adjusted eps 55 cents vs Street view 54 cents

* Expects 2013 sales up 1 pct to 3 pct, adjusted diluted eps of $2.05-$2.20

Feb 13 (Reuters) - Hospira Inc, a hospital products maker that has grappled with regulatory issues at manufacturing plants for the past 18 months, said it had received a notice over the quality of its medical devices from the U.S. Food and Drug Administration.

The company reported the notice during a conference call on Wednesday after announcing a profit for the fourth quarter versus a year-earlier loss as sales of generic injectable drugs, IV solutions, drug pumps and other products increased more than 8 percent.

Hospira said the FDA completed an inspection of its medical device quality systems at its headquarters in Lake Forest, Illinois, last month and issued a list of 10 objectionable conditions. The list is known in the industry as a Form 483.

The company also said it sent notices to customers about some of its infusion pumps that had to either be recalled, fixed or adjusted. Hospira did not disclose the scope of the action nor the exact product models.

Shares in Hospira fell 67 cents to $34.28 in morning trading on the New York Stock Exchange.

Chief Executive F. Michael Ball said that FDA inspectors acknowledged some progress since the last inspection.

"The observations re-enforced our own assessment there is still a lot of work to be done within our device operations," Ball said on the conference call.

He said management had been doing a complete review of all of its medical devices even before the FDA notice. He said the new strategy would be aimed at modernizing and streamlining platforms.

Ball said there has been progress at some of its other manufacturing facilities that have had problems, including its Rocky Mount facility in North Carolina. Ball said a reinspection by the FDA would be extensive and lengthy but he expects it to resume production at full capacity this year.

He said Hospira's other plants emerged from shut downs on schedule.

Hospira's Clayton, North Carolina facility has resumed manufacturing propofol, an anesthesia that is administered intravenously and has been in short supply, and is building inventory in the fourth quarter of 2012 for an early 2013 relaunch.

He said the drug was being priced at a premium.

Hospira said it expects sales to rise 1 percent to 3 percent for 2013, and adjusted earnings per diluted share to be between $2.05 and $2.20.

Management said the relatively wide range is based on the expected rate of supply recovery and share gains, as well as improvements in quality and manufacturing performance.

In the fourth quarter, its net income was $5.3 million, or 3 cents per share, in the latest quarter, compared with a net loss of $214.0 million, or $1.30 per share, in the year-earlier period.

Adjusted earnings were 55 cents per share. On that basis, analysts on average were expecting earnings per share of 54 cents.

Net sales rose to $1.1 billion in the quarter from $1.0 billion a year before.

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Court Eviscerates Michigan’s Medical Marijuana Dispensary System

Michigan’s highest court issued a decision Friday that will likely shutter most of the state’s medical marijuana dispensaries. In a 4-1 ruling, the Michigan Supreme Court held that transfers of marijuana between two authorized medical marijuana patients are not legal under the Michigan Medical Marihuana Act.

To serve the state’s estimated 124,000 patients, businesses and not-for-profits have emerged that operate as “membership organizations” by facilitating the transfer of marijuana between various authorized patients and authorized caregivers. Members would rent lockers and set the price of their transaction with fellow members on their own. The court held that because patients cannot sell to one another, nor can designated “caregivers” sell to patients not their own, defendant Cannabis Collective is not immune from public nuisance actions:

In contrast to several other states’ medical marijuana provisions, the MMMA does not explicitly provide for businesses that dispense marijuana to patients. […]

Defendants transferred and delivered marijuana to patients by facilitating patient-to-patient sales; in doing so, they assisted those patients in acquiring marijuana. The transfer, delivery, and acquisition of marijuana are three activities that are part of the “medical use” of marijuana that the drafters of the MMMA chose not to include as protected activities within § 4(i). As a result, defendants’ actions were not in accordance with the MMMA under that provision.

In light of the court’s interpretation of the law, it appears the only ways in which a registered patient may obtain medical marijuana are by growing their own, or working with a caregiver, who is authorized to provide marijuana for up to five patients. According to Denise A. Pollicella, a Michigan lawyer specializing in marijuana law, some two-thirds of the state’s patients do not have an authorized caregiver. Pollicella points out that while medical marijuana dispensaries are able to operate economically to provide the range of options relevant to different types of patients, a caregiver who is providing marijuana to just five patients lacks the economies of scale to effectively serve patients.

Michigan’s law is not the only one that, while authorizing patients to legally possess and consumer marijuana, is hazy about how they can actually obtain that marijuana. In several states, including Washington and California, dispensaries have operated under a “collective gardens” provision in the laws that allows users to band together to produce and consume marijuana. Others, such as Colorado’s and Maine’s explicitly authorize dispensaries.

Seattle City Attorney Pete Holmes has cited legal uncertainty about this collective gardens justification as one of the many reasons why law enforcers prefer Washington’s new medical marijuana legalization law, which clearly authorizes licensed dispensaries and producers.

In response to the ruling, State Rep. Mike Callton (R), said he would propose a bill to legalize dispensaries. He proposed a bill last year that never made it to the hearing stage. The legislature is already considering a bill to decriminalize marijuana. Just last week, reports showed that Michigan’s medical marijuana program netted state revenue of $6.3 million in application and renewal fees in the last fiscal year.

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GOP, Dems Call For Repeal Of $30 Billion Medical Device Tax

A bipartisan group of 180 House members — consisting of about 40 percent of the House — has reintroduced a bill to end the 2.3 percent tax on medical devices that was imposed under President Obama's healthcare law.

That tax took effect at the start of 2013, and is expected to raise a few billion dollars a year in tax receipts for the government, and $30 billion over 10 years. But opponents of the tax say it will hinder innovation and job creation in the medical device industry.

"Placing a new tax on the backs of U.S. medical innovators and entrepreneurs who employ more than 400,000 Americans is not a prescription for economic growth or job creation," said Rep. Erik Paulsen (R-Minn.), who sponsored the bill. "In fact, companies have already laid off thousands of employees as a result of this onerous new tax, and more jobs will be lost now that this tax is in effect.

"It's not only costing our country jobs and deterring innovation, but more importantly, it will reduce patient access to cutting edge medical products and treatments that save lives."

Paulsen introduced a similar bill in the last Congress. The latest version would repeal the tax without offsetting spending cuts.

Last year, the House Ways & Means Committee amended his bill to provide for an offset, something that could happen again in the new Congress. Ways & Means attached language that would pay for ending the tax by requiring the government to recapture all overpayments of health insurance subsidies provided in the healthcare law. Under current law, only some of these overpayments must be returned to the government.

Overpayments of the subsidies are anticipated because the subsidies are based on prior years' income, and if it is discovered later that a family's income increases, some repayment would be required.

This offset led to a veto threat from President Obama, who argued that requiring all overpayments to be returned would be a tax on middle-class families. Republicans rejected the argument that recapturing subsidy overpayments is a tax, and said Democrats have also proposed this kind of offset before.

The House approved the amended bill last summer, in a 270-146 vote in which 37 Democrats supported it. But Obama's veto threat froze the bill in the Senate, which never considered it.

It remains to be seen whether the bill can grow more legs in this Congress now that the tax has taken effect. The effort to repeal the tax has bipartisan support in both chambers — in addition to the bipartisan House bill, H.R. 523, Sens. Orrin Hatch (R-Utah) and Amy Klobuchar (D-Minn.) will introduce a companion in the Senate.

"Repealing the medical device tax eliminates barriers to medical innovation, ensuring patients have access to life saving technologies and reduces the burden on tight R&D budgets, spurring job growth in the industry," said Rep. Ron Kind (Wis.), the leading Democrat on the House bill.

"Supporting and promoting American manufacturing, innovation, and research and development will increase our economic competitiveness and ensure our economy is built to last."

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Statement by the President on the Twentieth Anniversary of the Family Medical Leave Act

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For Immediate Release February 05, 2013 Statement by the President on the Twentieth Anniversary of the Family Medical Leave Act

Twenty years ago today, the Family and Medical Leave Act became law, and we took a groundbreaking step forward for America’s workers and families. Before the FMLA, taking time off to care for yourself or a family member may have meant risking a job or derailing a career, especially for women, who often faced discrimination and stereotypes in the workplace. But this law helped level the playing field by extending protections to both women and men, so that more workers could meet their responsibilities to themselves and their families without jeopardizing their livelihood

Two decades later, we should take pride in the law’s success, and I am proud of the work my Administration has done to expand the FMLA’s protections to military families and airline workers.  But we also know there is still more work to do.  Not all employees are covered by the law, and oftentimes workers cannot afford to take unpaid leave.  So as we mark this anniversary, let us also recommit ourselves to the values that inspired the law and redouble our efforts on behalf of fairer workplaces and healthier, more secure families. 

Blog posts on this issue February 05, 2013 3:00 PM ESTPresident Obama Makes a Statement on the Sequester

President Obama explains that while our economy is headed in the right direction, looming automatic budget cuts will cost jobs and slow down our recovery.

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Medical Experts Warn The Rise Of Resistant Bacteria Will Cause ‘Antibiotic Apocalypse’

England’s chief medical officer is warning that the rising numbers of drug-resistant diseases will eventually lead to an “antibiotic apocalypse” — a not-too-distant future when there aren’t any cures for common infections — and more antibiotic research should be a top global health priority.

Professor Dame Sally Davies told members of Parliament on Wednesday that the world must begin addressing antibiotic resistance, since the treatments for common diseases like gonorrhea, E. coli, and penicillin are losing their effectiveness and new drugs aren’t being developed quickly enough to replace them. The emergence of “superbugs” that can’t be cured with modern medicine could soon undermine advances in disease research and treatment. Davies compared the issue of resistant viruses to the gravity of the world’s climate change crisis:

Davies said rapidly evolving resistance to antibiotics among bacteria is one of the greatest threats to modern health. “Antibiotics are losing their effectiveness at a rate that is both alarming and irreversible – similar to global warming,” she said. “Bacteria are adapting and finding ways to survive the effects of antibiotics, ultimately becoming resistant so they no longer work.”

The warning comes six months after a similar call by Margaret Chan, head of the World Health Organisation, who said the world faced the “end of modern medicine as we know it” as a result of the “global crisis in antibiotics”.

Davies said that even though she may not live to experience the full effects of global warming, the looming antibiotic crisis may threaten the health care system within the next few decades. “The apocalyptic scenario is that when I need a new hip in 20 years, I’ll die from a routine infection because we’ve run out of antibiotics,” she explained.

Antibiotic development has slowed in recent years, largely because marketing new drugs isn’t as profitable for the pharmaceutical industry. As Davies put it, there’s currently a “broken market model for making new antibiotics” that has led to “an empty pipeline.” The World Health Organization has called for the development of new antibiotic drugs, just four of the world’s 12 largest pharmaceutical companies are investing in researching new antibiotics.

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St. Jude Q4 profit, medical device sales decline

ST. PAUL, Minn. -- Troubled medical device maker St. Jude Medical Inc. posted a 4 percent drop in fourth-quarter profit as higher taxes and a drop in sales for most of its products offset tight spending. The company still managed to top Wall Street profit expectations.

The maker of pacemakers, heart-shocking defibrillators and other medical devices has been plagued over the past few years by recalls of wires for several heart devices, and analysts worry another recall could be coming.

The company, based in St. Paul, Minn., said Wednesday that net income was $120 million, or 39 cents per share for the three month-period that ended on Dec. 29, down from $125 million, also 39 cents per share, a year earlier.

Excluding one-time charges totaling 53 cents per share, net income would have been $285 million, or 92 cents per share. The charges include ongoing restructuring charges, litigation costs, an income tax loss related to the settlement of an audit and write-offs for discontinued products.

Analysts surveyed by FactSet were expecting earnings per share of 89 cents, excluding charges.

Revenue totaled $1.37 billion, matching analysts' consensus forecast. Sales were down 2.5 percent, from $1.41 billion in 2011's fourth quarter.

Net income fell despite an 18 percent drop in spending on marketing and administrative expenses, to $451 million.

Sales fell 3 percent to $422 million for the company's best-selling products, heart defibrillators implanted in patients to correct dangerous irregular heartbeats and prevent heart attacks. Pacemaker sales dropped 11 percent, to $260 million.

In the one bright spot in the quarter, sales of products to diagnose and treat the dangerous irregular heartbeat atrial fibrillation increased 10 percent to $239 million.

The company said it expects earnings per share of 91 cents to 93 cents in the first quarter and $3.68 to $3.73 for all of 2013. Those numbers exclude expected restructuring charges.

Last week, analysts said they think the Food and Drug Administration may call for a recall of another heart wire product called Durata. Earlier this month the company said it had received a warning letter from the FDA after agency inspectors found inconsistencies in how the company manufactured and documented defibrillators. The FDA will not allow any new products to be made at the plant making the defibrillators until problems with manufacturing and quality control are fixed.

St. Jude shares lost 5 cents to $39.62 on Wednesday.

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Healthcare reform tax on medical devices is a mistake

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During a time when our nation’s economy struggles to stabilize and manufacturing jobs continue to diminish there has been one industry within the manufacturing sector that has ascended as a global leader – America’s medical device industry. This industry, described as an American success story, has brought us lifesaving technologies such as pacemakers, CT scanners, artificial joints, defibrillators, and cardiac stents; as well as many jobs here at home.
 
The medical device industry employs over 400,000 Americans directly and is indirectly accountable for roughly 2 million high-skilled manufacturing jobs. According to a 2012 Battelle Technology Partnership Practice report, over 14,000 people are directly employed in Ohio by the medical technology industry. Further, from a Lewin Group report, for every medical technology job an additional 1.9 positions are created in the state.

While Americans are currently experiencing a decrease in wages, the average annual salary within the medical device industry is 40 percent above the national average, according to the Medical Device Manufacturers Association. In Ohio, the average medical technology employee earns 12.8 percent more than the average employee earnings in the state.
 
Unfortunately, the future of this growing and innovative industry is confronted with much uncertainty as it prepares for the implementation of the Affordable Care Act (also known as ObamaCare), specifically a 2.3 percent excise tax on the sale of any medical device. A 2.3 percent excise tax will be devastating to the medical device industry, threatening to stifle innovation and the creation of American jobs. Once estimated to be a $20 billion excise tax, but now is estimated to collect over $30 billion in taxes, this ObamaCare pay-for went into effect January 1, 2013.
 
Combined with a 35 percent corporate tax rate, state and local taxes, and the 2.3 percent tax on its sales, not profits, many medical device manufacturers are faced with a severe tax hike. As a result, companies are looking at a host of options to offset this tax in order to remain competitive and profitable, including increased consumer prices, relocating business to overseas where tax rates are much lower, and layoffs. In a recent Reuters report, publicly traded medical technology companies have cut approximately 7,000 American jobs in 2012, and according to an AdvaMed survey conducted in late December of last year, 62 percent of companies surveyed said they are planning layoffs or reduced hiring to help offset the tax.
 
Along with the loss of domestic jobs, budgets for research and development have been slashed. A report from the Pacific Research Institute shows that it is estimated that the medical device tax will reduce industry research and development investment by $2 billion annually. Ultimately, medical devices will be produced outside of the United States and our national health care quality hindered.
 
While we move forward to spur our economic growth, we cannot afford burdensome tax policies, such as the medical device tax that create a hostile business environment and hamper job retention and creation. With a strong manufacturing presence and numerous innovative, world-class hospitals and medical centers, Ohio stands to lose on jobs and economic growth should this tax not be repealed.  In addition to jobs in Ohio, full repeal of this tax will save up to 47,000 jobs nationally, support medical innovation, and provide American families with more choices and flexibility.
 
Congress must act to repeal the medical device tax before the policy becomes irreversible. In June of last year, a bill of which I am a cosponsor, H.R. 436 sponsored by Rep. Erik Paulsen (R-Minn.), to repeal the medical device tax, passed the U.S. House; however, it was not taken up in the Senate, despite its growing bipartisan support.
 
There are few industries that have had such positive growth over the past several years as the medical device industry, and in this fragile economy, these jobs are more important than ever. The medical device tax is one of the most onerous taxes contained in the health care law, and must be repealed.
 
Latta, a Republican from Ohio, serves on the House Energy and Commerce Committee.

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