The proposed legislation would impose a 2.5% excise tax on the wholesale prices of medical devices sold in the US beginning in January 2013. And a bill progressing through the Senate is proposing that device companies to pay $4 billion taxes.
“If a device tax puts more pressure on smaller med-tech companies, I think that may be an opportunity to see more consolidation in the med-tech space in particular,” Johnson & Johnson Chief Financial Officer Dominic Caruso said.
Caruso said J&J plans to continue making acquisitions in the device arena, as well as collaborations and purchases in the pharmaceutical and consumer-health products categories.
He signaled that Johnson & Johnson was unlikely to pursue large-scale combinations in the pharmaceutical sector, as Pfizer Inc. (PFE) and Merck & Co. (MRK) have done this year. “I would say the track record so far has not been good in terms of bringing together large pharma companies and either getting much more productive [drug research] or being able to withstand pricing pressure,” Caruso said.
