Budget deadlock spells trouble for med-tech firms

  • Article by: JIM SPENCER , Star Tribune
  • Updated: March 2, 2013 - 3:35 PM

The head of the trade group for the nation’s medical device makers says the political climate in Congress complicates efforts to repeal the medical device tax.

Stephen Ubl says the federal budget cuts brought on by sequestration will make it more difficult to make the case with individual members of Congress for the repeal of the medical device tax.

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Stephen Ubl, the Minnesotan who runs the Advanced Medical Technology Association, hears the same refrain from members of the U.S. House and Senate each time he visits Capitol Hill to lobby for the nation’s medical device industry:

We have to work together.

Now Ubl, who directs the world’s largest med-tech trade group, is worried about controlling fallout from mandatory federal budget cuts called sequestration.

Ubl, whose group is better known as AdvaMed, sat down with the Star Tribune last week to discuss the medical device industry’s concerns with gridlock and its impact on his members, including Fridley-based Medtronic and dozens of other companies in the state’s critical medical technology sector.

Chief among Ubl’s worries is that political distractions will draw focus away from his top priority: Repealing a newly imposed tax on medical devices.


Q: What impact will the automatic budget cuts have on the medical device industry?

A: The cuts will affect the FDA budget, as well as the fees industry pays. Both will be reduced 5.1 to 5.3 percent. A related issue is the continuing [budget] resolution that allows the government to collect [user] fees at a higher level associated with a new user fee agreement, but only spend at the level of the old user fee agreement. That [difference] is about $40 million. … The other sequester impact is a 2 percent reduction in the Medicare program, which is across the board.


Q: Do you have a sense of frustration at what’s happening?

A: Sure. We’re working with a coalition called the Alliance for a Stronger FDA. AdvaMed is partnering with other groups in the life sciences to call attention to the negative effects associated with the sequester.


Q: Would your members be better off without automatic budget cuts?

A: Absolutely. If Congress were to revert to regular order, there’d be a budget resolution and the appropriators would fashion individual appropriations bills. That would be a better process. History reflects that FDA does very well when those policymakers are making value judgments about the relative importance of agencies.


Q: Have you been on the Hill to say that to folks?

A: Sure. Absolutely.

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