Press Releases

June 7, 2012

Dent Votes to Repeal Harmful Medical Device Tax

WASHINGTON, D.C. – U.S. Rep Charlie Dent (PA-15) today voted for H.R. 436, the Protect Medical Innovation Act, which repeals the 2010 healthcare law’s 2.3 percent excise tax on medical devices. Rep. Dent, an original cosponsor of the bill, has long advocated repealing the tax, which will increase costs for consumers, stifle critical innovation and threaten high-quality jobs in the 15th District.

“While the 2010 health care law is riddled with flaws, no provision exemplifies its fundamental deficiencies quite like the medical device tax,” said Rep. Dent. “The tax’s sole purpose is to raise money to pay for a new government entitlement program. Unfortunately, it will simultaneously increase the cost of products and services Americans need to live healthy and productive lives. Essentially, Americans will be paying more for medical devices in order to finance the policies driving up the cost of their care.”

The cost of this tax will be passed on to consumers at every level. Americans will not only pay higher prices for medical devices, but bills from their medical providers and insurance premiums will increase. For example, the dental industry estimates the excise tax will increase the cost of dental care alone by $160 million annually.

The tax will also have a significant effect on the research and development of new technologies ranging from prosthetics to artificial hearts. Because it is levied on gross sales rather than profits, it punishes companies who have yet to fully recover their upfront research costs. As a result, manufacturers will be forced to divert valuable resources away from innovation.

“To improve the quality of health care in the United States, our public policies should encourage greater investment in the research and development of advanced devices, not impose taxes that limit innovation,” continued Rep. Dent.

Beyond stifling innovation, this punitive tax will slow job growth in a promising domestic industry and threaten high-quality manufacturing jobs across the country. Of the 400,000 Americans directly employed by the medical device industry, it is estimated 43,000 jobs will be lost as a result of the new tax. Home to 576 medical device companies employing over 22,200 people, its effect on Pennsylvania will be especially dramatic. The new tax will threaten the growth of the Lehigh Valley’s diverse biomedical industry, which features employers like Aesculap, Boas Surgical, Biomed, BBraun, Olympus, Orasure and Precision Medical Instruments.

“To allow job creators in the 15th District and across the United States to continue developing life-saving technologies and investing in their growth, the medical device tax must be repealed,” said Rep. Dent. “I am extremely disappointed the President has stubbornly threatened to veto H.R. 436 to preserve his signature policy. Unfortunately, our economy is on life support and the President insists on taxing the respirator.”

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