Medical-Device Makers Face Hurdles Despite Tax Repeal

U.S. lawmakers’ elimination of the 2.3% excise tax on medical devices in 2020 will remove some uncertainty for the industry, but bottom lines and broader challenges may remain static. Payers continue to cut reimbursements and more money is going to share buybacks and dividends than to R&D.

On a trailing 12-month basis, companies in the Indxx Global Medical Devices Index bought back more than $12.5 billion of stock and paid out more than $12 billion in dividends compared to R&D spending of $20 billion. The tax, part of the 2010 Affordable Care Act, was projected to bring in $29 billion ...