Trump’s tariffs on $34B of Chinese products kick in

Tariffs imposed by President Donald Trump on $34 billion of Chinese goods, including a slew of medical devices, went into effect on Friday. China immediately retaliated, kicking off tariffs of equal size for American goods.

Trump said this week that his administration will implement tariffs for another $16 billion worth of Chinese goods in the coming weeks. He’s also reportedly considering additional tariffs on $500 billion worth of products, according to CNBC.

The China-made medical devices on the list of products affected by new U.S. tariffs include pacemakers, X-ray generators, anesthetic devices and optical instruments, CNN reported.

All told, the levies imposed by the Trump administration could take a $5 billion bite out of the U.S. medtech industry, according to AdvaMed public affairs EVP Greg Crist.

Industry representatives lobbied against the move, arguing that the tariffs could damage their companies’ ability to compete. Executives from GE Healthcare reportedly asked the Trump administration to remove certain components made in China from the list of products slated to take a hit from the tariffs.

“GE’s requests for adjustments to the proposed tariff list have been limited … to those products that should be removed because tariffs would impose significant and disproportionate costs on U.S. business, workers and consumers without advancing — or potentially even undermining — the President’s goals,” GE wrote to the US Trade Representative, according to the BBJ.

Beyond the medical technology industry, there is the looming concern that the relationship between the U.S. and China economies has devolved into an escalating ‘tit-for-tat.’

“We’ll probably see escalation upon escalation. China has made it absolutely clear,” Australia’s former ambassador to China, Geoff Raby, told CNBC.

In a statement, China’s Ministry of Commerce declared that the U.S. has “violated [World Trade Organization] rules and launched the largest trade war in economic history to date.”

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India’s medical device industry protests NPPA stent price caps

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Indian medical device manufacturers and associations are voicing their opposition to price caps on stents and other devices imposed by India’s National Pharmaceutical Pricing Authority, according to a report from the Economic Times India.

The price cap has reportedly left little to no room for innovation in the country, with industry groups now demanding an expansion of the National List of Essential Medicine board, which evaluates the price caps, to include different stakeholders within the industry.

“Continuing in the spirit of inclusiveness, we request the ministry of Health & Family Welfare to reconstitute the NLEM committee to enable inclusion of representatives from other relevant sections of the healthcare ecosystem. The broader constitution will give a real chance to the committee to review its previous decision on price capping. The committee, in its current form, is invested in the decision it took last year and the review would be fair if it is done by a broader panel,” Medical Technology Association of India director general Pavan Choudary said, according to the Economic Times India.

The industry groups have floated solutions to the caps, including labeling of higher priced, more “innovative” stents under a different sub-category, but so far the efforts have been rejected by the NPPA citing a lack of evidence.

Advocates for removal of the price cap, including industry groups such as AdvaMed, have argued that medical devices, unlike pharmaceuticals, cannot be adjudged on clinical superiority evidence, according to the report. They also argue that the lifecycle of medical devices are often cut short due to continuous improvements, making it difficult to make appropriate efficacy comparisons.

Industry groups are reportedly supportive of an idea floated by the government’s Committee on High Trade Margins in the Sale of Drugs which recommended capping of margins instead of flat price caps.

“Singular focus on controlling the price of devices without attempting to address the larger picture will not improve patient access. We need to consider alternatives to price control such as trade margin rationalization and more scientific approaches that facilitate differential pricing for innovative medical technologies,” AdvaMed VP Dr. Abby Prat said, according to Economic Times India.

Last November, the NPPA was reportedly looking to revisit its decision to impose price caps on coronary stents in February of 2018 and it is looking for input from manufacturers, the agency said in a statement last week.

AdvaMed goes social with anti-medtech tax ad

The Advanced Medical Technology Assn. is unleashing the latest ad in a social media campaign aimed at winning more legislative support for a repeal of the medical device tax, hoping to sway Congress members during the August recess.

The apparent demise last month of Republican plans to repeal Obamacare and replace it with their own version of healthcare reform, which would have done away with the medtech tax, has the industry casting about for another vehicle to latch on to.

The 2.3% levy was imposed on U.S. medical device sales by the Affordable Care Act in 2013. During the three years it was in effect (a two-year moratorium went into effect at the beginning of last year), the tax brought in $5.3 billion, well short of the $8.7 billion it was expected to bring in to IRS coffers. Repealing the tax is predicted to cut nearly $20 billion in revenues from the federal budget from 2018 to 2026.

Now AdvaMed is aiming to up the public pressure on legislators who have yet to sign on to the repeal push, which enjoys bipartisan support in both chambers. The social media campaign, under the #repealdevicetax hashtag on Twitter, features ads highlighting the industry’s positive impact on public health, jobs and the economy.

The new ad is slated to run from August 14 through Labor Day in 15 states, a spokesman for the lobby told MassDevice.com today via email. It aims to influence senators and representatives in states with large medtech clusters including California, Indiana, Massachusetts, Michigan and Minnesota.

“Our goal is to ensure repeal remains top of the priority list through recess. We’re calling this phase, ‘It’s Time,’ because, in the wake of the fight over ACA, it’s time to get some clear economic and health policy wins such as full repeal on the books,” the spokesman told us.

“It’s time to protect innovation, it’s time to advance life-changing research, it’s time to permanently repeal the jobs-killing device tax!” the ad reads:

“It’s time to put innovation first. Thousands of companies face a massive, billion-dollar tax increase in a matter of months. We know full repeal can make it across the finish line and become law, so it’s time to do something about that when Congress returns,” AdvaMed CEO Scott Whitaker added in prepared remarks.

The latest repeal campaign is nothing new for AdvaMed, which has been running anti-medtech tax ads since at least early 2016 on Twitter.

“U.S. medtech companies support nearly 2 million jobs,” one ad reads.

“Between 2000 and 2014, medical advancements helped reduce fatalities from heart disease by 35%,” reads another.

Emphasizing the “real-world impact” of the tax, another asserts that resumption of the tax next year “threatens to stall” companies’ planned innovations.

“Congress, it’s time to permanently repeal the medical device tax: for jobs, for innovation, for patients,” according to the Twitter campaign.

“Any moving vehicle”

Although the Senate recently voted to approve the FDA user fee bill without including any repeal language, the medtech industry hopes to tack the measure onto any of a number of upcoming legislative pushes. Candidates include reauthorizing the Children’s Health Insurance Program, an omnibus budget bill expected next year and the next item on the agend: Reforming the tax code.

Last month Whitaker told media outlets that he’s “frustrated” by Washington’s inability to act, saying the lobby is prepared to “pivot to any moving vehicle.”

“We’re not going to give up,” he told Modern Healthcare.

“The medtech industry is frustrated, because if Congress doesn’t do something, a tax increase is looming,” he said to the Minneapolis Star Tribune.

That said, another temporary reprieve lacks appeal, Whitaker said.

“While we’d be grateful for anything beyond a tax increase,” he told the newspaper, “that’s not the right health policy or tax policy solution.”

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