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Smaller medical-device makers such as Cardica (CRDC) are tacking surcharges on to their products...

  • Sunday, January 27, 3:30 AM ET
    Smaller medical-device makers such as Cardica (CRDC) are tacking surcharges on to their products or warning of price increases to cover a 2.3% sales tax that came into force on Jan. 1 as part of Obamacare. Larger manufacturers like Medtronic (MDT) and GE Healthcare (GE) haven't explicitly added extra fees but are expected to bake them into contract renewals.
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This news story has 13 comments:

  •  
    Who says that those tax payers making under $250K will not see higher taxes? This is one tax hitting the older generation right in the pocket book. And that is right now!!!!

    Let the facts fall where they may. President Obama hates business's.
    27 Jan, 07:18 AM Reply Like
  •  
    This will only affect the poor who can ill afford any increase, but who cares about them? And how about those overweight people and smokers? They tend to be poor, also. They're sucking up too much free Obamacare. As the A.P. put it, 'why not just let these health sinners die prematurely from their unhealthy habits?' I'm in with O, "free healthcare for everyone (who matters).

    http://apne.ws/WgrsYF
    27 Jan, 09:48 AM Reply Like
  •  
    These companies should just get over it, Obamacare is a reality, they have been over charging for decades, their owners and managers have become millionaires. They are asked to absorb or pass on 2.3% and they are squeaking like the pigs they are.
    27 Jan, 10:58 AM Reply Like
  •  
    I am a retired Professional Engineer, and must confess that I don't understand the "markets". I am trying to educate myself in regards to the economy and business , so as to maximize my returns on my investments.
    27 Jan, 01:41 PM Reply Like
  •  
    I didn't vote for him.
    27 Jan, 05:07 PM Reply Like
  •  
    Just additional proof that companies do not pay taxes; their customers do. Ultimately, the individual taxpayer takes the hit, not having a customer to pass it along.
    27 Jan, 05:07 PM Reply Like
  •  
    Most of these devices are implanted in people eligible for Medicare and Medicaid, so the tax will largely be passed along to the government which dictated it and which will print the money to pay for it - completing the circle of insanity!
    27 Jan, 06:01 PM Reply Like
  •  
    Interesting thought!
    27 Jan, 08:58 PM Reply Like
  •  
    Who's surprized that the costs would be passed on? That's the way it always works...Dah! Who thought Obamacare would be free? That was never in the plan. Just because you will be guaranteed health care doesn't mean any of it will be free!
    28 Jan, 02:08 AM Reply Like
  •  
    It all depends on the elasticity of demand.

    I would think that if you want a medical device and the price goes up by 2.3% for all of the makers, then you just have to suck it up and pay the higher price. (E.g. you can't switch from, say, Boston Scientific to Medtronic for a lower cost device since the 2.3% is added to all transactions no matter what.)
    27 Jan, 08:05 PM Reply Like
  •  
    Most people do not understand the impact of the 2.3%, and why vendors are making such big noise on these 2.3%?
    These 2.3% is not applied on Profits, they are applied on your Revenues. For example you are selling a product for $100, and used to make $7 out of it. Now you have to pay 2.3% which is 2.3$ out of your revenue. So, you are left with $4.7 profit. This means you have just lost 33% of your profit. (not 2.3%).
    For a lot of start-ups and innovative smaller companies, they will be happy to even get a 5% profit, so now 50% of their profits will be gone, unless they pass them directly to the customers.
    This tax is not that painful for the already profitable companies, but extremely painful for the innovative smaller companies.
    28 Jan, 03:59 PM Reply Like
  •  
    It's easier to influence the decisions of a few large companies than many small ones. Large government prefers large companies. It's the old Willie Sutton Rule.
    28 Jan, 05:38 PM Reply Like
  •  
    Astounding that no one else has clarified such a significant difference in the way this tax is applied. Seems like it's going to impact the larger companies also. The larger ones are more likely to survive the loss of 50% of their profits--at least briefly---without passing the tax on.
    30 Jan, 01:56 AM Reply Like
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