Two key features set Americans apart from the rest of the world: our unparalleled ability to innovate and our dedication to caring for others. The medical device industry is the perfect amalgam of these two American qualities and I am proud to represent a state that is known as one of the nation’s leaders in this field.
America’s innovators lead the world in this industry and we cannot allow policies to be enacted that weaken job creation and potentially force these high-tech manufacturing jobs to move overseas. There are more than 7,000 individual medical technology firms in the U.S. and, while some are large, international companies, the industry is predominantly fueled by small businesses and entrepreneurs, a number of which are found right here in New Hampshire in communities such as Keene, Hollis and Hudson.
It’s an industry reliant on high-tech, highly-skilled workers for which each job creates an additional 1.5 jobs. In New Hampshire alone, the medical device industry is responsible for more than 8,000 direct and indirect jobs. In fact, 62 percent of medical technology firms employ fewer than 20 employees, with only 2 percent employing 500 or more people. It is now more important than ever that this industry be allowed to thrive in our state and across the nation.
Government should not be holding this industry back, but instead finding ways to encourage innovation to find new life-saving and life-altering devices. I am proud that Congress is finalizing legislation that will not only fund the Food and Drug Administration’s (FDA) drug and device approval divisions, but will encourage the increased development of innovative drugs and devices for patients.
Included in this package is a bill I authored (H.R. 3211), which will lift restrictions imposed on manufacturers who develop devices intended to treat individuals who suffer from rare diseases, which affect 4,000 or fewer individuals a year. Product safeguards will remain in place, but by lifting current restrictions, more entrepreneurs can enter the market, expanding the realm of treatment for these patients who need them the most.
Unfortunately, a dark cloud looms over the medical device industry. One of the many taxes included in the President’s health care law is set to go into effect at the beginning of 2013 and will only serve to suppress innovation and job growth in an industry where, when progress stalls, patients suffer the consequences.
More commonly known as the medical device tax, the health care law imposes a 2.3 percent sales tax on every medical device manufactured in the United States. The money collected will not even be used to benefit the medical device industry or the patients it serves, but goes toward funding many unrelated provisions of the new health care law.
Studies show that should this tax be enacted, more than two-thirds of the medical device manufacturers across the nation would, without question, immediately halt any new hiring and severely limit research and development. To top it off, it is projected that, effective in 2013 when the tax goes into full effect, 43,000 Americans will be out of a job.
It is for the need of our patients and entrepreneurs who keep New Hampshire a leader in the medical device industry that I cosponsored and helped pass bipartisan legislation (H.R. 436) that repeals this disastrous provision of the health care law. This tax, if not repealed, equates to lost jobs, higher health care costs, and the stifling of the potential for countless treatments for patients desperate for a life improved, and saved, by a device.
It’s disappointing that President Obama has threatened to veto this legislation should it reach his desk. I voted with a majority in the House to repeal this tax, but the bill faces a grim future in the Senate. (The Supreme Court could strike down the tax as part of the Affordable Care Act today.) In this sluggish economic recovery, when Congress and the administration should be doing everything it can to make it easier for companies to grow and create jobs, repealing this tax on medical device manufacturers is a no brainer.
Charles F. Bass represents New Hampshire’s Second District in Congress.