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Boston Scientific warned on Tuesday that a proposed tax in the U.S. health care reform bill that cleared the Senate Finance Committee last week could have serious consequences for the company, including job losses.
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Chitose Suzuki / AP Boston Scientific Corp. |
"The bill that came out of the committee last week makes absolutely no sense and would be very damaging to Boston Scientific, and the medical device industry as a whole," Boston Scientific [BSX
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] Chief Executive Ray Elliott said during a post-earnings conference call.
"In a nutshell, it would raise costs and lead to significant job losses.
It does not address the quality of care but the political scorecard of savings." Elliott said the company's tax liability would be doubled, adding $150 million to $200 million a year, and that it would be forced to make substantial cuts in research and development spending, which could result in 1,000 to 2,000 jobs being lost at Boston Scientific.
Shares of Boston Scientific were down 15.85 percent at $8.55 in late morning trading on the New York Stock Exchange, a day after the company missed third-quarter earnings expectations and cut its full-year forecast.
The bill in its current form contains $4 billion in annual fees on medical device makers beginning in 2010 to pay for health care reform.
The device industry is fighting to remove or reduce the fees.
In addition to direct fees on device makers, the industry faces a double tax because hospitals, which have agreed to accept $155 billion in cuts to government payments over 10 years, will pass on part of that burden to device makers, said Elliott.
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