Medical Device Tax is a Threat to Innovation
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Today, the House of Representatives voted to repeal the impending 2.3% tax on medical device sales. As Greg Sorensen, CEO of Siemens Healthcare North America writes, the tax would stifle medical innovation:
A tax of this magnitude will be deeply felt by the industry and by the health care system as it creates a more difficult environment to create jobs and develop new life-saving innovations. For a company that engineered the world's first cardiac pacemaker, the world’s first real-time ultrasound diagnostic device, and the world’s first integrated whole body PET-MR, a $1 billion loss in revenue over ten years could have a significant effect on our ability to invest in the type of R&D and product development that leads to these types of life-saving inventions.
In a U.S. Chamber Key Vote Letter in support of H.R. 436, the “Protect Medical Innovation Act of 2011,” Bruce Josten, the U.S. Chamber’s Executive Vice President for Government Affairs, also touches on this point:
The tax will undermine America’s global leadership position in product innovation, clinical research, and patient care, while also undermining the industry’s ability to create and maintain well-paying jobs in the United States. The Chamber opposes punitive taxes that target a particular industry, sector, or income group.
Because the tax would apply to sales and not profits, small businesses would be hurt the hardest.
To continue America’s global leadership in this field, the medical device tax must be repealed.