Senate Hearing on Medical Device Tax Effects
Friday, April 24, 2015
Source: Medical Design Technology
The Medical Imaging & Technology Alliance (MITA) commends the U.S. Senate Committee on Finance Subcommittee on Health Care for convening today’s hearing, “A Fresh Look at the Impact of the Medical Device Tax on Jobs, Innovation, and Patients,” to explore the various effects of the tax. The committee is headed by Senator Pat Toomey (R-PA), Chairman and Senator Debbie Stabenow (D-MI), Ranking Member.
“We greatly appreciate the leadership of Senators Toomey and Stabenow to provide a forum in which to discuss the deleterious effects of the medical device tax,” said Andy Dhokai, MITA’s Director of Federal Relations. “In addition to its impact on jobs and the economy, this burdensome tax has forced many device manufacturers to reconsider R&D budgets, which complicates the development and introduction of new, innovative medical technologies and, ultimately, may have an effect on patients.”
The 2.3 percent excise tax has been levied on the sale of medical devices, including innovative medical imaging technologies that are fundamental to the practice of medicine both in diagnosing and treating disease. This often reduces the need for costly medical services and invasive surgical procedures. The medical technology industry, which includes imaging, devices and information technology, has long been an important engine for economic growth, employing more than 400,000 workers nationwide, generating approximately $25 billion in payroll, paying salaries that are 40 percent more than the national average ($58,000 vs. $42,000) and investing nearly $10 billion in research and development annually. The industry is fueled by innovative companies, the majority of which are small businesses, with 80 percent of companies having fewer than 50 employees.