The medical device industry’s effort to repeal a 2.3% tax on companies’ revenue has surfaced once again in the House of Representatives.
The 2.3% tax on medical device makers’ revenue is billed as a way to raise about $30 billion toward paying for federal healthcare reform. Some devices aren’t affected—including eyeglasses, contact lenses and hearing aids.
Reps. Erik Paulsen (R-Minn.) and Ron Kind (D-Wis.) reintroduced legislation earlier this month to repeal the tax.
Minnesota is a major center of the medical device industry, with Medtronic CoreValve LLC and St. Jude Medical Inc. both based in the Minneapolis area. Paulsen’s district is made up mostly of suburbs of the city, which stretch into neighboring Wisconsin, including parts of Kind’s district.
Orange County also is a center of the industry, and Reps. John Campbell (R-Irvine) and Edward Royce (R-Fullerton) are among the 175 members of the Republican-led House of Representatives who have signed on to support the repeal.
A companion bill is expected to be introduced in the Senate, which is under Democratic Party control. Some Democrats have said they would support a repeal, including Minnesota’s two senators, Al Franken and Amy Klobuchar.
Klobuchar and Sen. Orrin Hatch (R-Utah) are expected to introduce a companion bill in the coming days. Irvine-based medical device maker Edwards Lifesciences Corp. has a plant in Utah.
California’s senators—Dianne Feinstein and Barbara Boxer, both of whom are from the Bay Area—have not staked a position on the latest effort to repeal the medical-device tax.
An earlier bill by Paulsen passed the House in June by a 242-173 vote. It died when the Senate did not take action on the legislation.
Paulsen said in a release that he reintroduced the bill because “placing a new tax on the backs of U.S. medical innovators and entrepreneurs who employ more than 400,000 Americans is not a prescription for economic growth or job creation.”
Industry groups have made consistent efforts to repeal the tax since late 2012.
Those efforts have included a letter-writing campaign in which officials at several OC-based device makers or those with large local operations signed a letter to Senate leaders to repeal the tax, arguing that the tax puts many high-paying jobs in jeopardy.
“We continue to believe 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 letter read. “We respectfully request timely action on legislation to repeal this over $30 billion excise tax.”
Avanir on Pipeline Results
Aliso Viejo-based Avanir Pharmaceuticals Inc. recently said it completed the first stage of an in-human clinical trial for its AVP-786 drug candidate.
AVP-786, which is deuterium-modified dextromethorphan, was examined in a pharmacokinetic study with single and multiple doses. Pharmacokinetics is a branch of science devoted to the study of how drugs behave in the body.
Avanir also released financial results for the three months ended Dec. 31.
It posted a narrowed net loss of $12.9 million in the quarter, compared to a loss of $15.9 million in the year-ago quarter.
The company’s revenue was up 130% to $16.5 million, which was marginally above consensus estimates of $16 million.
Research and development expenses grew 77% year-over-year to $6.6 million.
Revenue from Nuedexta, the company’s sole drug on the market, was up 20% to $14.9 million.
Nuedexta is approved for treating pseudobulbar affect, a disorder that causes uncontrollable fits of laughing or crying. Pseudobulbar affect is often found in connection with other disorders.
Bits and Pieces
Kareo Inc., an Irvine-based healthcare software maker, came in at No. 58 on Forbes’ recent list of America’s 100 Most Promising Companies. The list ranks what Forbes describes as privately held, high-growth companies. … Irvine-based Salus Homecare said it received the Joint Commission’s gold seal accreditation by demonstrating that it complied with the commission’s national standards for quality and safety.
