With Special Tax Suspended, Medical Device Firms Reap Big Savings

medical-devices_custom-6b65e1beaefea49e8fd74e316f963186f28e780d-s800-c85U.S. manufacturers of medical devices started 2016 with a windfall — a two-year suspension of a controversial tax on their revenue.

Medical devices include a wide range of products and machines used in medical care, such as tongue depressors, endoscopes and MRI scanners, for example. Manufacturers say the tax on devices hurt their business. The Congressional Research Service estimates companies paid out $2.4 billion in 2014.

“When this tax went into place it forced us to make cuts and sustain those cuts,” says George Montague, chief financial officer of Minnesota-based Smiths Medical. His firm takes in more than $1 billion a year for its specialty medical products.

Smiths Medical had paid $10 million a year in medical device taxes, Montague says, “and so now we’re getting that funding back.” He insists the money will go into building the business.

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About Peter Coffaro 1149 Articles

A growth-driven and strategic executive, Peter Coffaro commands more than 20 years of progressive management success within the medical device industry. As a District Sales Manager for Stryker Orthopaedics, Peter was responsible for managing and directing a regional sales force to achieve sales and profit goals within the Rocky Mountain region. Previously, he was the Director of Sales & Marketing for Amp Orthopedics. In this role, Peter was responsible for planning, developing, and leading all sales and marketing initiatives. Peter is a former orthopedic distributor in the Pacific Northwest. He has also worked with DePuy Orthopaedics as well as Zimmer, and held positions in sales, sales training, and sales management. Peter has an extensive background in organizational development, business development, sales management, negotiating and P&L management. Peter holds a B.S. degree in Biology from Northern Illinois University.

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