New Beginnings … Again

The cycle of renewed hopes and expectations starts again. It’s amazing how a blip on the calendar gives us the perceived opportunity to wipe the figurative slate clean and start over—a chance to improve or change. And oh how we try to take advantage of it, at least at the beginning. This certainly isn’t a new notion. The Babylonians were thought to be the first people to make New Year’s resolutions. The ancient Romans, following the two-faced god Janus (for whom the month of January is named), also took this time to reflect on the old year and look ahead to the promise of the year to come. The practice may be ancient, but it doesn’t seem to have changed much.

Perhaps not as optimistic, the medical device industry is looking at 2013 with a squinty gaze, head cocked to one side—hoping for the best, but not quite sure it wants to open its eyes for fear that it might see the speeding train (the non-stop Medical Device Tax Express) inches away from a head-on collision. The prevailing mood, despite a robust 2012 for the sector, seems to be one of uncertainty and inconsistency. In talking to medical device professionals—OEMs and suppliers—there’s a mix of reactions. Some have chosen to give the reality of the tax time to settle in, taking a wait-and-see approach—clearly not happy about it, but trying to proceed with business as usual. The majority clings to the “this must be repealed at all cost” message. And it’s no wonder. Under the 2.3 percent tax, device manufacturers collectively are required to fork over an estimated average of $194 million per month in payments.

“Instead of investing in new medical technologies or creating new jobs, innovators across the United States wrote a check to the IRS this month (January),” said Mark Leahey, president and CEO of the Medical Device Manufacturers Association (MDMA). “While the first payments of the medical device tax may have been collected, the resolve and commitment of the medical technology community is stronger than ever to put an end to this bad policy. MDMA and our members remain committed to repealing the medical device tax, but it shouldn’t take more job losses and forgone therapeutic advancements to highlight just how damaging this policy is to a unique American success story.”

A few contract manufacturers have pointed out that the tax, while clearly not ideal, might actually result in more domestic business for them—another opportunity to help OEM partners.

The beginning of the year also brought with it some evidence that a handful of medical device companies may be trying to pass the cost of the tax onto hospitals (see News Front). The rumblings from hospitals are just beginning and other details are emerging, so there may be more to explore on this latest wrinkle in the tax wrangling.

Getting back to the notion of new opportunities in a new year, Orthopedic Design & Technology’s sister magazine, Medical Product Outsourcing, is breaking new ground in 2013 with a medical device manufacturing conference in Salt Lake City, Utah. The MPO Summit (www.mposummit.com) will take place June 4-6 at the Grand America hotel in downtown Salt Lake City. A first of its kind for the region, the interactive networking and educational event will gather local and out-of-state industry experts—OEMs, contract manufacturers, suppliers, consultants and academics from inside and outside of the state—for a unique forum to discuss timely industry topics and provide tools to compete and grow in today’s challenging business climate. With Utah’s expanding medical device and life-science sector, it is a perfect location to explore today’s manufacturing opportunities.

“The state is thrilled that the medical device industry in Utah is one of the most highly concentrated of its kind in the United States. Hosting the MPO conference is an exciting opportunity to raise the profile nationally of this fast-growing industry cluster and highlight the innovative research at our universities,” said Spencer P. Eccles, executive director of the Utah Governor’s Office of Economic Development.
Here’s hoping that your 2013 is filled with continued opportunity and growth, and that you’re able to face the new year with both eyes wide open and in focus.

Christopher Delporte
Editorial Director, Medical Devices