Good news: The FDA won’t be extending the medical device tax to smartphones
posted at 8:21 pm on March 21, 2013 by Erika Johnsen
Part and parcel of ObamaCare is one particularly insidious little provision that adds a 2.3 percent excise tax on medical devices. The Affordable Care Act’s got to pay for itself somehow, you know, even if it does mean hiking up costs, discouraging innovation, and killing jobs in an industry that provides such necessary and life-saving products as surgical tools, artificial limbs, MRI machines, and even bedpans. It’s all for the cause, after all.
There have been some lingering questions, however, about just how far the Obama administration intends to take this medical device tax. In this digital day and age, there are all kind of health-related functions anyone can perform with just your standard smartphone and the relevant app (which is really cool, because some of the great things about the app economy include low barriers to entry and fast-paced competition and innovation; i.e., when somebody invents a great new app, it can be made available to the masses in relatively rapid fashion).
In 2011, however, the Food and Drug Administration proposed the possibility of applying the medical device tax to mobile medical apps in some capacity, which as you might imagine, could bring smartphones, tablets, and their applications into ObamaCare’s regulatory purview and deter investment and innovation. Hey, why bother working your way through the regulatory minutiae of the medical device classification when you could just come up with another Angry Birds-type app instead?
A House Energy and Commerce subcommittee dedicated a hearing to the issue this week, and good news: The FDA has no intention of taxing our smartphones… but certain types of apps, well, that’s another matter:
Republican members of House Energy and Commerce Investigations subcommittee this week seized on reports that the agency could extend the healthcare law’s tax on medical devices to iPhones, BlackBerrys and Android devices. …
“They would not be regulated as medical devices, therefore not subject to the medical device tax,” said Christy Foreman, director of FDA’s Office of Device Evaluation, Center for Devices and Radiological Health.
Foreman said FDA does have authority to regulate certain smartphone applications, but those reflect a fraction of the estimated 40,000 medical apps now on the market. Those applications would include apps with ultrasound technology capabilities or those used to diagnose health problems.
In short, any app that could pose a health risk to users if not properly used could fall under regulatory scrutiny, she said. Calorie counters or pedometers would not make that list, she said.
Uh huh. While I’m sure we’re all very pleased that the federal government is munificently resisting the temptation to tax our smartphones, since the Obama administration insists on going forward with the medical device tax at all (take a look at the facepalm-worthy clip from the hearing below), the bureaucracy really could stand to provide a little more certainty for the mHealth industry on that one, stat — which I won’t put any faith in, since I know just how efficiently and smoothly the entire ObamaCare-writing process is going for them.
The full committee’s top Democrat, Rep. Henry Waxman, predictably had some harsh words for the Republicans’ focus: “There are too many pressing issues before us for the committee and this Congress to get bogged down for three days in what amounts to an inaccurate talking point about FDA overregulation and a nonexistent iPhone tax.” …Mmm, sorry I’m not sorry, but I’m a-okay with some extra scrutiny and specificity on this one: If and when ObamaCare implodes on itself, the government is going to start flailing for ways to cover costs, overtly or otherwise. Let’s get this on the record books.
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