June 6, 2018

Study: Medical device tax hurts investment in R&D

By: Judy Mathias
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Editor’s Note:

This study from Iowa State University shows companies have cut funding for research and development (R&D) in response to the medical device tax imposed by the Affordable Care Act.

Since 2013, the 2.3% excise tax has significantly reduced:

  • R&D investment by $34 million
  • Sales revenue by $188 million
  • Gross margins by $375 million
  • Earnings by $68 million.

The study, which is the first to look at the actual cost of the tax on manufacturers, found it also affected operating and marketing costs.

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