Italy's Healthcare at Risk as Tax Threatens Medical Device Companies

Italy's "payback" tax threatens 2,000 medical device companies, potentially crippling the healthcare sector and endangering 200,000 jobs.
PMI Sanità demands urgent government intervention to prevent the collapse of the medical device industry and the National Health System.

A looming tax regulation in Italy threatens to cripple the country’s healthcare system, according to Gennaro Broya de Lucia, president of PMI Sanità, an association representing small and medium-sized enterprises (SMEs) in the medical device sector.

The tax, known as "payback," could spell the end for nearly 2,000 of the 4,000 companies that supply vital medical devices like syringes, heart valves, and prosthetics to hospitals.

In a recent interview with LaPresse, Broya de Lucia warned of the catastrophic consequences if immediate action isn't taken.

The "payback" tax forces medical device companies to cover excess regional healthcare spending beyond government-set budget caps. This amounts to 50% of the total amount declared by regional authorities, leaving private suppliers on the hook for a staggering €6 billion.

What makes this especially devastating, says Broya de Lucia, is that companies are taxed on their revenue, not profit. In some cases, this tax represents nearly 100% of a company’s annual earnings, with some firms being asked to pay more than they make in an entire year.

The impact extends beyond just the companies, with nearly 200,000 jobs and the sustainability of Italy’s National Health System at stake. Broya de Lucia emphasized that without swift action, "the National Health System could collapse."

PMI Sanità is calling for an urgent exemption for the years 2015 to 2018, arguing that without relief, the industry could be decimated. Broya de Lucia also proposed raising the regional healthcare spending cap from the current 4.4% to 7.3% starting in 2019, which could prevent further damage.

He even stressed that this isn’t just a tax, it’s an unsustainable burden that could destroy an entire sector crucial to Italy’s healthcare system.

Edited Harshajit Sarmah