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Will Obamacare tax your iPhone as a medical device?

Kenneth Corbin | March 25, 2013
Food and Drug Administration official addresses concerns that the agency will impose heavy regulations on consumer devices in health IT rulemaking and discusses possibility of iPhone tax under Obama's health care law.

Committee Democrats, noticeably exasperated, criticized the hearings as a political vehicle to air grievances with the president's healthcare law and the separate FDA rulemaking on mobile devices and apps.

"[T]his tax issue is a non-issue. We did not need to hold one day of hearings on this, let alone three," said California's Henry Waxman, the committee's ranking Democrat.

When his time came to question the witnesses, Waxman asked Foreman specifically about the prospect of an "iPhone tax" under Obamacare, specifically the portion of the law that provides for taxes on medical devices.

Mobile Devices Not Medical Devices

Foreman reminded the committee that hers is a public-health agency with no jurisdiction over tax matters, but nonetheless expressed confidence that smartphones and tablets would not be affected by that provision in the law by virtue of the FDA's guidelines for device classification.

"They would not be regulated as a medical device, therefore not subject to the medical device tax," she said.

With regard to the FDA's work developing regulatory guidance for health IT apps and devices, Waxman brought Foreman through a long list of examples in a bid to get the FDA on record with a commitment to regulatory restraint:

Waxman: Is FDA currently proposing or does it intend in the future to regulate ordinary smartphones and tablets?

Foreman: No it does not.

Waxman: What about mobile platforms in general, such as the iPhone, BlackBerry, Android phones, tablet computers or other computers that are typically used as smartphones or personal digital assistants?

Foreman: No.

Waxman: What about the entire mobile network?

Foreman: No.

Waxman: Each new mobile device released on the market?

Foreman: No.

Waxman: All health IT?

Foreman: No.

Waxman: An iPad application to help track the number of steps walked per day?

Foreman: No.

Waxman: An iPad application that reminds one that it's time to refill a prescription?

Foreman: No.

Waxman: Software that enables a physician to search a medical textbook?

Foreman: No.

Waxman: Apps to allow parents to access online services such as personal health records to document procedures their baby has undergone and drugs their baby was given?

Foreman: No.

Waxman: I don't think you can be any clearer.

Could Mobile Tax Intention Change?

But the stated intent of an agency doesn't always hold up over time, suggested Morgan Griffith (R-Va.).

"In regard to the questions that--the list of examples that Waxman listed out, while the FDA does not currently have any plans, do you believe that the FDA could, if it so chose to do so, regulate those examples down the road if it had a change of heart?" Griffith inquired.

Foreman allowed that the FDA, acting under its statutory authority in the Federal Food, Drug and Cosmetic Act, could, but that it would require compelling evidence of a health risk to do so.


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