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Allergan, Others Lining Up Against Proposed ‘Botax’

Orange County Business Journal Staff

Allergan Inc., the Irvine-based maker of wrinkle-smoother Botox Cosmetic, and other businesses are fighting against a proposed tax to help pay for healthcare reform.

A 10-year, nearly $1 trillion health reform proposal introduced this week by Senate Majority Leader Harry Reid, D-Nev., has a provision that would place a 5% tax on elective cosmetic surgeries and procedures such as face lifts, liposuction, cosmetic breast implants or Botox injections.

If lawmakers pass the so-called "Botax," it would raise $6 billion. A spokesman for Reid said in reports said that it was included in the proposal because money was needed to make the bill work.

Meanwhile, Allergan and others, including rival Johnson & Johnson, are lining up their arguments against the proposed tax.

"It is a random hit on an easy target that is only punitive and not corrective,” Allergan spokeswoman Caroline Van Hove said in an article that appeared on Minyanville, an investor Web site.

Taxing cosmetic procedures “is unnecessarily punitive on people who have merely decided to enhance their appearance,” Van Hove said.

But the article said that lobbyists and Senate aides familiar with the proposed tax said Allergan, J&J and others in the industry had already persuaded lawmakers to cut it down to 5% from 10%.

The cosmetic surgery industry isn’t the only one fighting against a proposed tax as part of healthcare reform efforts. Medical device makers have already succeeded in getting a proposed $40 billion tax on their revenue cut in half by lawmakers.


  Feb. 8-14, 2010
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