Medical device consultant and former FDA scientific reviewer Adam Piotrowski breaks down the potential effects of the medical device tax and steps stakeholders should take to absorb, or leverage, the impending levy.
It's time for medical device makers to begin preparing for the 2.3% medical device tax in their valuations and negotiations, according to former FDA reviewer and consultant Adam Piotrowski.
Stakeholders should leverage the tax in their projections and negotiations with the industry, especially during mergers and acquisitions, notwithstanding the ongoing push in Washington to repeal the levy.
"With specific knowledge of the tax and its potential impacts to a firm's income statements, buy-side deal-makers may be able to leverage that knowledge over under-prepared counterparts to drive attractive purchase multiples," Piotrowski wrote in an op-ed for Business Insider. "Sellers may also be able to find an advantage by developing familiarity and understanding of the tax. Being able to demonstrate that management has successfully implemented strategic initiatives to counteract the tax, resulting in minimal interruption to (or even improvement in) operating efficiency can support higher valuations and purchase multiples". . .View Full Article