Justice scale, healthcare, cost

Survey Shows Return of Medical Device Tax Will Cause Job Losses

By MedTech Intelligence Staff
1 Comment
Justice scale, healthcare, cost

AdvaMed states that the huge tax increase will have a significant impact on employment and investment.

In July 2018, the House of Representatives voted to permanently repeal the medical device tax. However, the Senate did not move forward with any action, and the two-year moratorium on the 2.5% excise tax is scheduled to end on December 31.

“A $20 billion tax increase on the industry will have serious consequences on employment and investment,” said Scott Whitaker, president and CEO of AdvaMed, in a news release. “The last time this tax was in effect, we saw nearly 29,000 jobs lost, and we could face even greater losses if Congress does not stop this tax from returning.” This week AdvaMed released some details of a recent survey:

  • 67% of the companies surveyed said they were worried that the device tax would trigger more layoffs at their companies
  • 83% say the device tax would lead to a reduction in R&D spending

According to the U.S. Department of Commerce, between 2012 and 2015, the U.S. medtech industry lost 28,834 jobs—a 7.2% decrease—most of which occurred in 2014, when the industry lost 27,022 positions.

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Comments

  1. Paul Stein

    The current spineless medical device industry “leadership” should not be consulted to comment on their own future. They are coasting off of the last ten years of mergers and acquisitions (M&A) and the wholesale abandonment of research, development, and innovation. The loss of jobs between 2012 and 2015 had very little to do with the dinky little excise tax, less than 10% of the article’s stated number. The vast majority of the layoffs had everything to do with the “leadership’s” exceedingly poor M&A strategic decisions. 2014 was a banner year! https://www.massdevice.com/medtech-ma-explodes-2014/

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