In 2013 the Patient Protection
and Affordable Care Act was enacted. Part of the legislation called for a 2.3% tax on sales of medical devices in the US, by
both domestic manufacturers and importers. Since the implementation of the tax, it has
not produced the expected revenue.
Originally it was expected that
$30 billion would be raised from the tax due to increasing number of Americans
covered by health insurance and, therefore, receiving medical treatment.
However, that number came up short. During its first year it only raised 60% of
those estimated taxes.
The tax ended up being costly to
small businesses, resulting in layoffs, cutting of research and development
projects, and ultimately delaying some expansion plans. The additional tax
disproportionately affected small and medium sized business, who already
struggled under the growing industry regulatory structure.
Realizing the strain this tax was
causing on small medical device manufacturers, on December 18, 2015, the
Consolidated Appropriations Act was signed. This act began a two year
moratorium on the medical device tax, starting January 1, 2016 and expiring
December 31, 2017. Researchers have noted that the suspension of the tax will
positively impact the medical device market in the US. The money that would
have been spent taxes can now be invested in human resources, research and
development, manufacturing expansion, and other areas. This positive reaction from industry leaders
and government officials may lead to a permanent repeal of the tax once the
suspension period ends.
Regardless of the political
environment, at Mark-10 we are committed to offering measurement
solutions to the medical device and many other industries, such as force and
torque gauges, and tension and
compression testing systems. Our
products help to ensure that manufactured medical devices meet performance and
quality standards, with the ultimate goal of maximizing patient safety and
outcomes. Mark-10 will continue to work
with medical device manufacturers to develop solutions that best meet
manufacturing and quality control objectives.
