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February 22, 2013

Survey: New Tax Drives Up Medical Device Prices

More than 40 percent of medical device companies expect to increase prices in response to an industry tax that took effect last month, according to a survey by a Texas-based consulting firm.

The survey of 3,509 medical device industry professionals around the world by the Emergo Group found that the 2.3-percent tax will bring about both tax increases and efforts to lower production costs.

Nearly 42 percent of respondents said their companies would pass along some or all of the increased costs to customers. Those in the next largest segment – 36 percent – said they could not disclose that information. And 31 percent said they would work to lower their own production costs without cutting staff, while 11 percent said they expect to reduce employment.

Despite the new tax, more than 71 percent of respondents were "very positive" or "somewhat positive" about the year ahead. That's up from 67 percent a year ago.

Smaller firms (nine employees or fewer) are most concerned about access to capital while bigger firms (250 workers or more) are most worried about a changing regulatory environment.

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