Buyer's remorse over medical device tax

By Greg Sorensen, M.D., chief executive officer, Siemens Healthcare North America - 03/26/13 12:15 PM ET

There appear to be a few glimmers of constructive activity in Washington, D.C. Last week, the Senate moved the ball forward on an issue that is extremely important to innovation and jobs in the United States. By passing an amendment to repeal the medical device tax by an overwhelming 79-20 votes, the Senate has done the right thing for patients and the U.S. economy.
The United States Senate has now joined a bipartisan majority of the House of Representatives calling to repeal the 2.3 percent medical device excise tax that has already damaged the U.S. economy and claimed thousands of jobs.

The American medical technology industry is responsible for and supports nearly two million jobs, creating a growing trade surplus and developing the technology essential to advancing patient care in the United States and around the world. However, since the January 1 implementation of the medical device tax, manufacturers have already paid an estimated $388,000,000 to the Internal Revenue Service (IRS) so far this year, redirecting funds that could otherwise be directed towards investment in things like job creation and research and development.
The impact of these semi-monthly payments to the IRS is being felt far and wide. Every day, innovators in this dynamic industry work hard to improve the quality of life for patients by developing the next frontier of life-saving medical devices and imaging technologies. Meanwhile, the companies that manufacture these cutting-edge diagnostic and therapeutic tools are improving the health of the U.S. economy by supporting hundreds of thousands of jobs. From the physician reviewing a CT scan, to the technician performing a procedure, to the factory worker assembling a machine, the medical imaging and devices industry is an essential engine of economic growth.
The clock is ticking in Washington, and the tax continues to impact high-quality jobs and investments in tomorrow’s treatments and cures at companies large and small across the country. Repeal is critical in order to give this industry – and the thousands of Americans it employs – a much-deserved second chance.
Given the negative effects of the medical device tax, it’s not surprising that Republicans and Democrats in both the House and Senate are exploring alternatives. Fortunately, the 79-20 vote on Thursday is an important step towards reversing course and ensuring that the United States remains the global leader in medical technology innovation.

Sorensen is  chief executive officer of Siemens Healthcare North America and chairman of the MITA Board of Directors.

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