Click here to subscribe today or Login.
RIGHT HERE IN Pennsylvania, we have the potential to create tens of thousands of additional jobs in the medical device industry and be a leader in the creation of life-saving technologies and products.
Pennsylvania is the fourth-largest producer of medical devices in the country, and home to 576 medical device companies. The industry provides more than 100,000 jobs, and jobs in the medical device field pay 25 percent more than the average private sector job.
But many of these well-paying jobs could be in danger, thanks to the health care bill. The law includes a new 2.3 percent tax on medical device companies’ total sales.
This tax applies to a business’s revenue – not just profits – especially penalizing small, up-and-coming companies that haven’t yet broken even on investments. This tax will have a big impact on companies right in our backyards.
For example, Chester County hosts one of the most innovative medical device companies in the state. Fujirebio Diagnostics is a world leader in the production of in-vitro diagnostics and biomarkers, helping doctors detect cancer faster. Their manufacturing facility employs 170 workers.
In the Lehigh Valley, B. Braun is a major medical device company specializing in intravenous accessories and pain control and employing 2,000 Pennsylvanians. In Western Pennsylvania, the ZOLL Medical Corporation employs 200 people and manufactures wearable defibrillators.
Many of Pennsylvania’s up-and-coming medical device companies are on the cutting edge of exciting innovations and discoveries, from handheld devices that help our troops detect traumatic brain injuries during battle to non-invasive respirators. Do we really want to impose a tax that could prevent future discoveries just like these?
Already, Pennsylvania’s companies are warning that the impending tax, set to take effect in 2013, will have a chilling effect. The chief financial officer of Boas Surgical, a medical device company in the Lehigh Valley specializing in pedorthic, orthotic and prosthetic devices, recently warned, “Basically, if the tax goes through we will turn out the lights, lock the doors and go home and not be able to service patients anymore.”
Fujirebio has hired 40 new workers over the past year, and has expressed an interest in expanding. Unfortunately, they have halted all hiring efforts because of the looming device tax.
That’s why I have cosponsored two pieces of legislation to repeal this harmful tax. We still have a year and a half until the tax goes into effect. If we act now, we can undo some of the damage the tax has already inflicted on Pennsylvania companies and prevent much more harm to the industry.
Some of my fellow Pennsylvania colleagues in the U.S. House of Representatives understand how devastating the medical device tax could be to the commonwealth’s economic recovery. Four Pennsylvanian representatives – two Republicans and two Democrats – have sponsored similar legislation in the House to eliminate this tax.
If we are going to create jobs in Pennsylvania, we need to make sure the federal government doesn’t get in the way. As I travel across the state, I have the opportunity to speak with companies like Fujirebio who tell me that the worst thing the government can do is impose unnecessary regulations and taxes that raise the cost of doing business.
And yet, that is exactly what the federal government is doing.
With bipartisan support gathering fast, I hope we can abolish this harmful tax and allow Pennsylvania companies to grow and innovate.