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Hospitals’ Health Reform Deal Could Affect Medical Device Sales: Johnson & Johnson CFO

Johnson & Johnson's chief financial officer Dominic Caruso said that medical-device makers likely will see a decline in sales as a result of the $155 billion agreement between the hospital industry and the Obama administration to overhaul the US health care system, according to Bloomberg.

US Vice President of Joe Biden and hospital industry officials announced on July 8, 2009 that the nation’s hospitals have agreed to accept $155 billion in cuts from government programs in order to help pay for health care reform. As per agreement, hospitals will receive $155 billion less in Medicare and Medicaid payments over the next decade that will come by improving efficiencies, changing the delivery system and reducing annual increases, Biden said.