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Device tax: Impact won't be as bad as we thought, Zimmer execs say

Fri, 10/26/2012 - 8:35am
Mass Device

The 2.3% medical device tax taking effect at the beginning of next year won't have as large an impact on Zimmer as the company previously expected, executives tell investors during a conference call today.

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Zimmer Holdings (NYSE:ZMH) may not be as hard hit by the medical device tax as the company had previously estimated, executives said during a conference call with investors today.

The orthopedic devices maker's supply chain is set up in such a way that when the tax is assessed Zimmer can account for it as a "cost of goods," president & CEO David Dvorak said.

That means the half of the $40 million to $50 million the company expects to owe on the 2.3% medical device sales tax gets deferred for half a year, leaving more funding for investment.

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