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The Supreme Court ruled that federal health insurance subsidies under the Affordable Care Act are legal in a 6-3 ruling on King v. Burwell this morning.

The Court refused to apply the Chevron deference--that is, to find that the statute is ambiguous and that the federal government's interpretation was reasonable. John Roberts, Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor and Elena Kagan voted with the majority.

The win for President Barack Obama's signature healthcare reform law will maintain subsidized health insurance for an estimated 6.4 million Americans who would have otherwise lost their coverage. Others warned that a ruling in favor of the plaintiffs would have caused an adverse selection "death spiral," as younger and healthier people pull out of the insurance pool and that premiums could skyrocket by 47 percent.


Johnson & Johnson has accepted a binding offer worth about $2 billion for its Cordis stent-making arm from Cardinal Health. The New Brunswick, N.J.-based healthcare giant said it expects the deal to close "towards the end of 2015."

The $1.94 billion deal, which is worth some $1.59 billion net of tax benefits, offers annual synergies in excess of $100 million by the end of fiscal 2018, Cardinal Health said in announcing the deal last March. Reports surfaced in August putting the price tag at $1.5 billion to $2 billion; in late April Cardinal emerged as the leading suitor. That company said it will finance the buyout of Fremont, Calif.-based Cordis with a combination of $1.0 billion in new senior debt and cash. Cordis posts annual sales of roughly $780 million "split almost evenly between cardiology and endovascular products," with about 70 percent coming from outside the U.S.


The debate on whether to repeal the 2.3 percent medical device tax now shifts to the Senate after it was approved in mid-June by the House in a 280-140 vote. Support for the bill has spanned party lines, but it's not clear how the Senate will respond to the measure, which industry advocates say is bad for business and patients. Sen. Pat Toomey (R-Pa.) has been a strong proponent of the House’s device tax repeal bill. In a 280 to 140 vote in mid-June, the U.S. House of Representatives passed the Protect Medical Innovation Act (HR 160), which would repeal the 2.3 percent medical device excise tax.

Sponsored by Reps. Erik Paulsen (R-MN) and Ron Kind (D-WI), the bill was introduced in January with 254 co-sponsors. It has been supported by the Medical Imaging and Technology Alliance (MITA), the Advanced Medical Technology Association (AdvaMed), and the Medical Device Manufacturers Association (MDMA). "The House of Representatives sent a strong, bipartisan message that it is time to put an end to this tax on innovation," said Mark Leahey, president and CEO of MDMA. "Repealing this policy will provide an immediate boost for medical technology innovators to continue solving the pressing challenges in the healthcare ecosystem."

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Dr. David Schmiege

David Schmiege is the president and CEO of Vein Specialists of America Ltd. He writes the anchor column for The Practice section of Vein Therapy News each issue. In this issue he does a compelling article about relationship marketing strategy errors. He can be reached at 630-638-0060 or at

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