Officials at several medical device makers based here or with large local operations have signed a letter urging Senate leaders to repeal a looming new federal tax on their revenue set to start in January to help pay for federal healthcare reform.
More than 800 companies, patient groups, provider groups, venture capital firms, organizations and associations sent a letter to Sens. Harry Reid, D-Nev.; Richard Durbin, D-Ill.; Jon Kyl, R-Ariz.; and Mitch McConnell, R-Ky., to consider repealing the tax.
“We continue to believe that implementation of what was to be a $20 billion excise tax—and is now estimated to collect over $30 billion in taxes—will adversely impact patient care and innovation and will substantially increase the costs of healthcare,” the industry officials said in the letter. “We respectfully request timely action on legislation to repeal this over $30 billion excise tax.”
Medical device makers will be subjected to a 2.3% tax on their domestic revenue. The new levy is set to take effect Jan. 1.
The letter noted repeal legislation has passed the Republican-controlled U.S. House of Representatives but awaits action by the Democrat-controlled Senate. The letter was signed by executives at Allergan Inc., Edwards Lifesciences Corp., and Masimo Corp., all based in Irvine, and San Clemente-based ICU Medical Inc.
Other signatories with large OC operations included B. Braun Medical Inc., which employs 1,355 people in Irvine and Westminster; Alcon Laboratories, which has 850 employees at its Alcon Research Ltd.; Toshiba America Medical Systems, which has 698 employees locally; Baxter Healthcare, which has 345 workers in Irvine; and Boston Scientific Corp., which acquired Cameron Health Inc. of San Clemente and Laguna Hills-based Vessix Vascular Inc. this year.
Venture capitalists also got in on the signing act, including Versant Venture Management LLC, a Menlo Park-based investor with a Newport Beach office.
The group’s letter charged that the higher tax rate would reduce “financial resources that should be used for R&D, clinical trials and investments in manufacturing [and] the impact will be especially hard on smaller companies whose innovations are not immediately profitable.”
The letter said that the tax “will not be offset by increased demand for medical devices” and that there was no evidence suggesting a device industry “windfall” from healthcare reform.
Masimo Monitors
Irvine-based patient-monitor maker Masimo Corp. has been showing off products to potential customers at industry meetings.
Chief Executive Joe Kiani, during the company’s recent third-quarter earnings call, said Masimo’s “focus on proven superior performance and innovation was on full display” during the American Society of Anesthesiologists’ annual meeting in Washington, D.C.
Masimo devices were the subject of 18 clinical studies presented at the meeting, and more than 200 doctors attended a symposium where anesthesiologists talked about their experiences with the company’s devices, Kiani said.
The company announced during the anesthesiologists’ meeting that its rainbow monitoring product line will now have fractional arterial oxygen saturation measurement available—something that Kiani said would provide a more precise reading and would lead to clinicians making different diagnostic and therapeutic decisions.
Masimo also demonstrated its new SET Pulse Oximeter Universal ReSposable sensor during the convention.
“As we have done every year since our first ASA, we also showed how our pulse oximeters and pulse CO-oximeters can measure through motion and low perfusion, while our main competitor’s products can’t,” Kiani said.
The latter comment was aimed at Covidien PLC, an Ireland-based company with operations in Irvine. Covidien and Masimo have had a long-standing rivalry in pulse oximetry that has included patent lawsuits.
Portfolio Update
Newport Beach-based Griffin-American Healthcare REIT II recently gave an update on its third-quarter activities.
The owner of healthcare real estate said that it bought 32 buildings for $277.4 million and that its portfolio was valued at $1.1 billion as of Sept. 30.
The company noted that it bought 14 medical office buildings in Florida, Illinois, Texas, Tennessee and Georgia for $132.4 million and five California hospitals for $85 million. One of the California deals included East Los Angeles Doctors Hospital, Memorial Hospital of Gardena and Coast Plaza Hospital in Norwalk.
Griffin-American previously was a unit of the former Grubb & Ellis Co., which was combined into a new company: Santa Ana-based Newmark Grubb Knight Frank. Griffin Capital Corp. and American Healthcare Investors LLC took over sponsorship of the unit in late 2011.
Bits and Pieces
Össur HF, an Icelandic orthopedic device maker with U.S. headquarters in Foothill Ranch, said its new Symbionic Leg bionic prosthesis received a “best of what’s new” award from Popular Science magazine. Symbionic Leg is made up of a bionic microprocessor knee and a powered bionic ankle. … Placentia-Linda Hospital said that it exceeded risk-prevention metrics established by Beta Healthcare Group, an Alamo-based professional liability insurer of hospitals, for its emergency room. Placentia-Linda’s emergency department was one of 53 in the state with full-team participation.
