New Yorkers Benefit from Medical Device Tax Freeze
Monday, May 9, 2016
New York contributes to the frontlines of health care innovation — and thanks to the leadership of Rep. Elise Stefanik and Sen. Chuck Schumer and the support of many other members of the New York congressional delegation to suspend the medical device tax, we can continue to be a hub for medical technology and innovation that saves lives, creates jobs and improves the quality of life for millions of Americans.
The more than 300 medical device companies in New York are important contributors to the state's economy. Upstate New York has a specialized concentration in medical devices and equipment, 26 percent more concentrated than the national average. Their work ensures that New Yorkers, Americans and people across the world have access to the most advanced and effective technologies. Advancements in medical technology allow people to better manage their medical conditions and live longer, healthier lives.
In December, Congress acted to suspend the medical device tax for two years. The tax stifled innovation and limited medical technology companies' ability to continue innovating tomorrow's medical miracles. It charged a 2.3 percent tax to medical device manufacturers on the sale of medical devices — on revenue, not profit — which Sen. Schumer rightly called "a tax on innovation." The tens of millions of dollars from New York state companies being paid to the tax over the last two years should have been spent investing in our workforce here in New York and in future technology that can improve people's lives.
Our industry is the eighth-largest medical device industry in the nation, accounting for more than 13,000 jobs and a $4.6 billion economic impact. More than 8,400 residents are directly employed by 141 medical device businesses in Upstate New York alone.
The device tax reduced our members' ability to invest in the research and development that was key to the advancements that allow patients to live longer and healthier lives. Without the tax suspension, we would not be able to continue the rapid pace of research and development we are known for — which would not only negatively impact innovation, but also New York's economy.
In the last few decades, medical devices have increased Americans' life expectancy by five years and reduced fatalities from heart disease, stroke and breast cancer by more than half. Since 2000, heart disease fatalities have been reduced by 34 percent. We need to hold on to and expand the spirit of innovation that has improved American health care.
The medical technology industry has remained a small and stable portion of the nation's health care spending, and new innovations have decreased expensive emergency room visits and helped people better manage their conditions — which means they can stay in the workforce, manage day-to-day tasks like grocery shopping and keeping up with their grandchildren.
Politics isn't easy. But we're grateful that our elected officials, including Rep. Elise Stefanik and Sen. Chuck Schumer, made the commonsense decision to suspend the medical device excise tax — and we hope will eliminate it altogether. We know there are still-undiscovered innovations that patients and their families are waiting for and that's what motivates us every day. Our ability to properly invest in innovation produces cost savings for the health care system and better outcomes for patients — whether they live here in New York or across the world.
Jessica Crawford is president of MedTech, a member-based trade association representing New York's bioscience and medical technology (Bio/Med) industry. It is based in Syracuse. Scott Whitaker is president and CEO of the Advanced Medical Technology Association (AdvaMed), the leading national medical technology association. It is based in Washington, D.C.