SalemNews.com, Salem, MA

Congress 2012

June 18, 2012

Tierney, Tisei differ on medical device tax

(Continued)

The Salem News —

Tierney said the Massachusetts delegation fought during the initial health bill debate to get a proposed 5 percent medical device tax cut to the current 2.3 percent.

He also noted the bill has some provisions to protect companies. For instance, sales overseas are exempt from the tax, but foreign companies selling in the U.S. would be subject to the tax to even the playing field, he said. What’s more, the medical device industry supported the legislation, including the tax, he said, under the theory that with more citizens on insurance plans, there would be more demand for medical care and medical devices.

So why are such gloomy predictions coming from the industry now?

“You’re listening to the lobbyists when you hear that, not the people here,” Tierney said. “A tax is a tax, and they would like to avoid it if they could, but they made the calculation (during the health care debate) and concluded it was a fair result in the end.”

The congressman said he didn’t hear much, if any, lobbying from the North Shore’s several large medical device firms.

“Without naming names, we have some larger companies in the district that understood this completely,” he said. “They understood the deal and were quite satisfied with it. They would have 30 million new customers ... and in their own calculation they would make more in the end than they would lose in the tax.”

Doug Clibourn, president and CEO of Velico Medical, a small startup in the Cummings Center in Beverly, said he, however, is concerned about the impact of the tax. Velico is in the process of winning federal approval for an innovative way of turning liquid blood plasma to powder for easier storage. Tierney visited the small firm of about a dozen employees last summer.

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Congress 2012

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