Support CNY jobs. Repeal the medical device tax, once and for all.

Thursday, November 7, 2019


To the Editor:

More than ever, our nation needs innovators to address the challenges facing the health care ecosystem. Upstate New York has long been the home of such innovation and it is critical that our region continues to drive the growth that will create good jobs at home and improve the quality of life for people around the world. This was Eugene Corasanti’s dream in 1970 when he started a small medical device company in Utica. His vision grew into Conmed, one of New York state’s many proud innovators who are transforming patient care and creating high-tech manufacturing jobs in our communities. Unfortunately, there is a looming policy called the medical device tax that would prevent the next generation of entrepreneurs with a passion to improve patient care from succeeding. The good news is that there is broad, bipartisan support to stop this from happening – but time is running out.

The medical device industry is responsible for more than 400,000 American jobs, and creates over one million additional jobs that support it. In New York alone, this vibrant industry employs tens of thousands of workers at places like Conmed’s facilities in Utica and Buffalo and Hillrom’s operations in Skaneateles. In an economic environment where high tech manufacturing is valued more than ever, these are the very jobs that we need to create for a vibrant 21st century.

The United States competes on a global stage, and the bio/med industry has proven to be one of the few net-trade exporters in the country. Conmed and Hillrom are but two of the thousands of innovators that make up this dynamic American industry. In fact, 80 percent of medical device businesses have less than 50 employees, and 98 percent have less than 500.

Passed as a part of the Affordable Care Act, the medical device tax consists of a 2.3 percent excise tax on medical devices, meaning it is applied to sales, not profits. This onerous tax was in place for three years, and many small companies ended up owing a substantial bill to the IRS, despite having little to no profits. During this period, according to the U.S. Department of Commerce, the medical device industry lost 29,000 jobs.

Fortunately, Congress recognized the negative impact this policy was having on patient care, innovation and job creation, and suspended it twice beginning in 2016. However, if nothing is done by the end of the year, medical technology innovators will again be forced to divert resources from developing the cures and therapies of tomorrow into paying this punitive tax. New York’s congressional delegation has been a powerful bipartisan voice in working to end this tax, and it is time to repeal it once and for all. The Empire State can lead the way in solving the pressing challenges facing patient care, but we need smart policies in place that foster innovation, not punish it.

The MedTech Association is a coalition of companies and universities with a mission to develop the relationships, tools and programs that enable New York State companies to bring tomorrow’s medical solutions to the healthcare marketplace. Our members employ thousands of workers in New York’s bio/med industry right here in Central New York. We commend New York’s Congressional delegation for their continued support of efforts to repeal the medical device tax, and call upon them to lead the charge to repeal this burdensome and job-killing tax once and for all.

-Winthrop H. Thurlow, Executive Director, MedTech Association


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