The new year is in full swing, but just as the Treaty of Versailles left a big mess to be resolved in another bloody conflict a scant 20 years later, the end of 2012 was anything but the end of several contentious issues that could plague the device industry in 2013.

As is the case with wedding gifts, this list includes something old, something borrowed, and at least one of these is sure to leave device makers blue.

Pre-emption back in play

We had discussed previously that a change of faces on the Supreme Court might endanger FDA’s pre-emption of state law for PMA devices, and it appears that the U.S. Court of Appeals for the Ninth Circuit has provided an avenue for a reconsideration of pre-emption at the Supreme Court.

According to a Jan. 16 posting at the website for the Washington Legal Foundation, the case of Stengel v. Medtronic (yes, Medtronic is yet again the defendant) was re-heard en banc after a three-judge panel ruled in the company’s favor. This setback for Medtronic was over a failure-to-warn claim based on injuries said to have not been reported in connection with the Synchromed EL pain pump.

I’ll let others spell this out in more detail, but I’m pretty sure the Supreme Court is the only avenue left for Medtronic to pursue if it wants to win this case. If, on the other hand Medtronic loses …

What will the new CED look like?

We recently reviewed the proposed overhaul of the coverage with evidence development process at the Centers for Medicare & Medicaid Services, so there’s no point in rehashing the details. The two big issues as best I can tell are whether CMS will allow local Medicare contractors to employ CED, and what sort of coverage gap will ensue at the end of a CED study.

Louis Jacques might not want to hear this, but the first of these two is not a serious proposal at all. Nobody in their right mind will go to multiple Medicare contractors for CED studies. It’s too unwieldy. As for the coverage gap, CMS is basically telling industry to make their FDA pivotal studies big enough to generate Medicare-type evidence unless you want to conduct study after study after study.

Let’s not forget that CMS indicated it would use CED to re-evaluate existing coverage, but they already do that. It’s just that they’re going to do it more often, but the agency promised to use CED more often generally speaking anyway. If you like coverage/reimbursement hurdles, 2013 could become the year that Edwin Moses becomes a hero of sorts for the medical device industry.

Corporate income tax rates: Up, down, or just different?

It’s tempting to think Congress and the White House recognize the need to fix the corporate income tax rate because of the need to bolster GDP growth in the U.S., and many economists would agree, assuming you want to keep the economy moving fast enough to avoid being swamped by Medicare and Social Security.

On the other hand, when you look at the tax fight just completed and the Obama administration’s emphasis on revenues versus reductions in mandatory spending, it’s not at all hard to imagine that corporate income taxes will go up in the net, regardless of what they do with rates. The Senate assiduously avoided passing any spending bills at all last year as a means of sidestepping some nettlesome fiscal issues, and the White House is late on the budget proposal for fiscal 2014.

The net message is that the administration is not eager to show the red ink and will do everything in its power to boost revenues. Even liberal pundit Kirsten Powers acknowledges that President Obama “didn’t run on cutting government, really, he ran on raising taxes.”

Will device makers find any relief from the device tax in the next corporate income tax rate setting? Maybe, but if they do, they’d be the only winners in what may prove to be a net loss for the American private sector in 2013’s tax wars.