Indiana medical device makers say fight isn’t over

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It was a rare, stinging setback for medical device and supply companies, including dozens in Indiana that make hospital beds, stents, biopsy needles, artificial joints and thousands of other products used in hospitals and doctors’ offices.

Despite spending tens of millions to lobby federal lawmakers and in campaign contributions, the companies lost a high-stakes fight in March over a new, $20 billion industry tax to help pay for expansion of health-care coverage.

Now the companies are licking their wounds and considering how to fight back before the tax even takes effect in 2013.

Some are looking ahead to the midterm elections this fall as a way to push back some of the tax, or perhaps repeal it altogether. That could require defeating dozens of lawmakers who supported the health-care overhaul and industry tax, and replacing them with those who want to overturn it.

Others are waiting to see how the Treasury Department will write the regulations on how the tax is implemented before weighing in.

And still others are trying to rally public support, pointing to the importance of an industry that employs about 20,000 people in Indiana and invests millions every year to develop new products.

They believe the fight is not over.

“There are many parts of the legislation yet to be finished, and the upcoming elections may bring dramatic change,” said Kem Hawkins, president of Cook Medical of Bloomington, a maker of stents, catheters and hundreds of other devices.

He has estimated the new law will cost Cook between $15 million and $20 million a year.

At stake is a major part of funding for President Barack Obama’s health-care reform, a landmark restructuring of the nation’s health-care landscape. The sweeping law, signed into law three months ago, provides health insurance for tens of millions of uninsured Americans. It also changes the way doctors, hospitals, drug companies, insurers and other health-care players do business.

The medical technology industry packs a big punch in Indiana, according to a new study released this month by the national trade association. Companies here employ more than 19,900 workers and pay annual wages of $1.1 billion, with an average annual pay of $60,739.

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