The 2.3 percent medical device tax set to go into effect in January 2013 could result in the loss of close to 39,000 jobs and $8 billion in economic output, a report published this week from the Advanced Medical Technology Association (AdvaMed) concludes. While hardly unbiased--AdvaMed represents medical device manufacturers--the report's authors point out that the industry currently generates nearly 1.9 million U.S. jobs, more than $113 billion in personal income for workers, and $381 billion in national economic output.
What's more, according to the authors, the medical technology industry is "geographically dispersed," making for a plethora of job opportunities in every state.
"[I]t is anticipated that the advanced medical technology industry will continue to grow in importance to the U.S. economy," the authors write. "For these opportunities to be realized, however, advanced medical technology companies need to operate in a business environment that encourages continued R&D investment and facilitates profitable business operations."
AdvaMed enlisted the services of non-profit independent research and development organization Battelle Technology Partnership Practice to create the report, which modeled a hypothetical event that would cause the advanced medical technology industry to decline by $3 billion annually. The tax is anticipated to cost the industry $3 billion a year over seven years, DOTmed News reports.
"Taxes our government applies to activities conducted in the U.S. are two and a half times higher than the taxes foreign governments levy on those same activities abroad, and on top of that, now we face a counter-productive medical device tax," AdvaMed Senior Vice President David Nexon said, according to DOTmed News.
However, not everyone is buying the argument that the tax would cause an industry implosion.
"[D]espite the talk of gloom and doom, I don't think [the tax] is going to take the [U.S.] industry down," Mark Bonifacio, president of Natick, Mass.-based medical device consulting company Bonifacio Consulting Services told Plastics News.
Added Tim Reis, vice president of Bethel, Vt.-based contract manufacturer GW Plastics, according to Plastics News: "[T]he healthcare market continues to drive forward. I don't see that going offshore."
To learn more:
- read the AdvaMed/Battelle report (.pdf)
- here's the accompanying announcement
- check out the DOTmed News article
- read the Plastics News piece