By JD Malone, The Express-Times
U.S. Sen. Pat Toomey and U.S. Rep. Charlie Dent headed a panel of speakers this morning at a B Braun Medical Inc. facility in Hanover Township, Lehigh County, bent on disabling a provision of last year's health care reform bill.
The bill calls for a 2.3 percent tax on medical devices to go into effect in 2013. Officials at B Braun, which makes a host of products used in medical settings, and other Lehigh Valley device-makers say the tax is onerous, job-killing, and in some instances, intolerable.
"It would wipe us out," said Chris Field, chief financial officer for Boas Surgical, a small Allentown firm that makes and sells prosthetics and orthotics. "We would not survive."
Field said the tax, which is on the sale of products, not on profits, can't be passed along to his customers, or anywhere else along the line since the company is both a manufacturer and a health care provider.
B Braun chief financial officer Bruce Heugel said the tax would cost B Braun $24 million a year. That tax would mean fewer jobs, less research and development, and higher costs to customers, Heugel said.
The meeting this morning comes on the one-year anniversary of the passage of the health care reform bill.
Toomey said since full repeal of the enormous bill is unlikely, he wants to focus on portions that can be improved, erased or enhanced. He said he believes the tax on medical devices needs to go. He indicted the entire bill as, "A disaster for America."
As for the device tax, Toomey said it means fewer jobs and less private investment.
He hopes to vote next week in the Senate on an amendment added to another bill that would reverse the device tax, but he isn't sure if he has the votes.
Dent said in the U.S. House there are plenty of votes to erase the device tax, and a number of bills to do just that, but no action has been taken.
Dent led much of the discussion among a panel of Lehigh Valley executives and medical device and life science corporate associations.
Dent said he believes the tax is a punishment on device-makers for not cutting a deal with the lawmakers who wrote the health care reform act -- pharmaceutical companies cut a controversial deal with the Obama administration to lower the cost of drugs over a period of time. That deal specified the government would not use its purchasing power to negotiate drug costs as long as drug companies agreed to cut future drug prices by $80 billion over 10 years.
B Braun, which employs about 2,000 in Pennsylvania, is the exact sort of high-tech manufacturing base that the government should foster, instead of punish, Dent said.
When asked what they would do in lieu of the health care reform plan, Dent and Toomey both said reform of health care is a requirement, but both also pressed for a multistep, measured approach that would extend tax breaks for buying insurance to individuals, open markets across state lines, and other proposals aimed at enhancing competition, and maybe, lower costs.
Field hopes Toomey and Dent get at least one of their priorities through Congress.
"If this tax goes through," Field said, "we're going to turn out the lights."