Beyond The Medical Device Tax (Worcester Business Journal)
Last month, when Michigan medical device maker Stryker Corp., which has operations in Hopkinton, announced plans to reduce its worldwide workforce by 5 percent, it didn’t take long for observers to connect the cuts to a federal tax on medical device makers scheduled to take effect in 2013.
The state industry publication Mass Device headlined its story “Stryker plans to lay off 5% of its workforce ahead of the med-tech tax.” Other news sources quoted business and political leaders who cited the layoffs as a reason to rethink the tax.
The tax was a political issue long before Stryker’s announcement. It amounts to 2.3 percent of companies’ sales, and the proceeds are intended to help fund the 2010 health care reform law.
But some observers point to issues facing the medical device industry that may be more of an impetus for the cuts than the tax is.
In announcing the reductions, which will save $100 million annually, Stryker said it’s making them both to prepare for the tax and react to “the ongoing challenging economic environment and market slowdown in elective procedures.” (Stryker officials declined to comment ...
