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New Excise Tax Applicable to Otolaryngologist Devices

by Amy Eckner •

According to Benner, it generally takes between four and seven years for a device to go from initial concept to commercial development—a time when a manufacturer could go through $60 to $100 million in development costs, with no profits coming in. “An excise tax will drastically affect these kinds of companies,” he said.

Raising the cost and timeline of developing new devices could mean that clinicians outside the U.S. might have tools available that are too expensive to market within the country. “Today, the impact might be a higher jobless rate, but down the road, there may not be the same level of technology and devices available,” said Benner.

While the future of the ACA is still uncertain, it’s unlikely that this particular provision will be repealed before going into effect at the beginning of the year.

ENT Medical Devices Subject to Tax

The U.S. government separates ear, nose and throat devices into three classes. Class I devices are exempt from the tax. Class II devices are subject to the tax unless they are marketed directly to consumers and cost less than $100 per unit. Class III devices are subject to the tax.

Below are Class II and III devices for otolaryngology devices according to the Federal Food, Drug, and Cosmetic Act:

CLASS II

  • Argon laser for otology, rhinology and laryngology
  • Audiometer
  • Auditory impedance tester
  • Bone conduction hearing aid
  • Bronchoscope (flexible or rigid) and accessories
  • Ear, nose and throat electric or pneumatic surgical drill
  • Ear, nose and throat microsurgical carbon dioxide laser
  • Ear, nose and throat synthetic polymer material
  • Electroglottograph
  • Electronic noise generator for audiometric testing
  • Endolymphatic shunt
  • Endolymphatic shunt tube with valve
  • Esophagoscope (flexible or rigid) and accessories
  • Group hearing aid or group auditory trainer
  • Hearing aid calibrator and analysis system
  • Laryngeal prosthesis (Taub design)
  • Laryngostroboscope
  • Mandibular implant facial prosthesis
  • Master hearing aid
  • Mediastinoscope and accessories
  • Middle ear mold
  • Nasopharyngoscope (flexible or rigid) and accessories
  • Olfactory test device
  • Partial ossicular replacement prosthesis
  • Sacculotomy tack (Cody tack)
  • Surgical nerve stimulator/locator
  • Tinnitus masker
  • Total ossicular replacement prosthesis
  • Transcutaneous air conduction hearing aid system
  • Tympanostomy tube
  • Tympanostomy tube with semipermeable membrane

CLASS III

  • Suction antichoke device
  • Tongs antichoke device