Posted on March 20, 2014
Regulations also assailed by Memphis device firms
By Kevin McKenzie
U.S. Sen. Lamar Alexander arrived in Bartlett on Thursday to discuss a medical device tax with executives in the industry.
However, government regulation by the U.S. Food and Drug Administration and reimbursement decisions by the Centers for Medicare and Medicaid Services drew just as much, if not more, attention from a half dozen industry executives and entrepreneurs who gathered with Alexander and Bartlett Mayor Keith McDonald.
“The headwinds we are facing is not just the medical device tax,” said Gary Stevenson, cofounder of MB Venture Partners, describing difficulties faced by startup companies focused on medical devices.
“It’s not just that, it’s really an overly burdensome regulatory impact on startup companies, as well as reimbursement,” Stevenson said.
Alexander, a Republican running for a third term and a steadfast opponent of the Affordable Care Act, spoke with reporters before convening the meeting at Bartlett’s city annex. The ACA was a topic at the Bartlett meeting because the law requires medical device makers pay a new tax.
“The Obamacare medical device tax is an especially onerous $30 billion tax that is destroying jobs in Memphis and across the country,” the senator said.
The medical device excise tax, 2.3 percent of revenue, was imposed to help fund health care reform.
Alexander, running for a third term, has been a steadfast opponent of Obamacare and the tax.
With plans to reintroduce legislation to repeal the tax, Alexander listened as executives described the tax and regulatory burdens they face.
Ed Chin, senior directory of regulatory affairs for Medtronic Inc.’s Memphis-based spine division, said the tax cost the firm $120 million that could have been used toward developing innovative products.
On the subject of regulations, Chin said the FDA has been speedier with decisions and praised programs that allow manufacturers to have a “show-and-tell” day with regulators and allow regulators to visit manufacturers.
However, representatives of two other firms described FDA or CMS encounters that threaten the firms’ business models.
Steve Bares, executive director of the Memphis Bioworks Foundation said the medical device tax is an example of obstacles to getting startup companies funded.