Cockpit Crew Blog

Medical Device Tax Suspension - Blessing or Curse?

In 2013 as part of the Affordable Care Act (ACA), a Medical Device excise tax was instituted which levied 2.3% of the total revenue for all medical devices sold within the United States. This was of course great for the economy, bringing in billions of tax dollars. The downside was medical device companies losing 2.3% of their profit in the U.S. (not globally). Medical Device companies distressed over the tax claiming their money could have been used for better research, employees and product development. If companies didn’t have this tax, a full-year EPS could have been, for example $0.10 higher. That’s not much overall, but when referencing Wall Street every penny counts in assessing a company’s performance and overall value.

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