Zimmer/Biomet Merger Roadblock to Device Tax Repeal
Walter Eisner • Thu, May 15th, 2014
There is a new excuse for not repealing the medical device tax; Zimmer Holdings, Inc.'s purchase of Biomet, Inc.
U.S. Senate Democrat Majority Leader Harry Reid of Nevada reportedly said recently that he would block a Republican demand to vote on repealing the tax. According to rollcall.com, Reid said on May 13, 2014:
“I’m not going to cry any big tears over the device folks. Their profits were huge last year. Remember, there was one deal, I think it was a $15 billion deal, where they were consolidated, a merger. So, the device tax folks are doing extremely well. They’re doing extremely well with Obamacare. Their profits have gone up significantly since Obamacare.”
It's a little ironic in that David Dvorak and Jeff Binder, the respective CEOs of Zimmer and Biomet, have been two of the most vocal critics of the tax. Dvorak was the main spokesperson for AdvaMed against the tax during his tenure as chairman of the trade group's board of directors last year. Now their decision to combine Zimmer and Biomet is being used against them in Congress. Reid didn't credit Obamacare for the merger.
The two key Republican senators leading the repeal charge vote are the orthopedic surgeon from Wyoming, Senator John Barrasso, M.D. and the anti-POD (physician-owned distributor) crusader, Senator Orin Hatch of Utah.
“For some reason they don’t want to have that vote. A lot of companies are leaving America to go overseas, ” said Finance ranking member Hatch.
“It was interesting last year when we had the nonbinding vote that 34 Democrats said they wanted to remove the medical device tax because they realize it’s hurting the economy, hurting jobs, hurting innovation, hurting research and development and actually driving jobs overseas, ” Barrasso said. “But when it comes to count the vote, when it really matters, they say…‘I don’t think I want to take that vote.’”