Congressman Jim Gerlach helped the House pass legislation on Thursday that would prevent a nearly $30 billion tax hike on companies that manufacture insulin pumps, blood screening tests for cancer, dental tools and other medical devices.
The House passed H.R. 436, the proposed Protect Medical Innovation Act, by a 270 to 146 margin. The bill now goes to the U.S. Senate for consideration.
During debate on the House floor, Gerlach said the pending 2.3 percent tax on medical device manufacturers' gross sales puts more than 20,000 Pennsylvania jobs at risk. Audio and video from Congressman Gerlach's floor statement is available here.
"This pending tax means higher costs for doctors and hospitals, less investment in finding new ways to improve treatments for patients and fewer jobs for American workers," Gerlach said. "Approximately 600 medical device makers have helped our Commonwealth's workforce transition from a Rust Belt economy to a high-tech leader in life-sciences, biotechnology and medical device manufacturing. However, this looming tax on innovation threatens to bring a little bit of the rust back to our manufacturing base."
"Some of the medical device manufacturers in Pennsylvania have said that forcing them to write larger checks to the Internal Revenue Service would mean facing decisions about cutting back on research and development, or raising prices," the Congressman continued.
"Cutting research and development would mean patients wait longer for groundbreaking treatments and products. Raising prices would put American workers at a disadvantage compared to their European competitors, which are often propped up by huge government subsidies."
The massive health care law enacted in March 2010 included a provision imposing a 2.3 percent tax on the gross sales of medical and dental devices used to improve -- and in some cases save -- patients' lives. The IRS is scheduled to start enforcing the law and collecting the tax in January.
A recent report estimated more than 40,000 jobs could be at risk nationwide if the medical device tax is allowed to go into effect.
Congressman Gerlach was the prime sponsor of H.R. 488, the proposed Save Our Medical Devices Act. The legislation was nearly identical to the bill passed on Thursday and would repeal the medical device tax.
He also made the argument for repealing the tax, along with House colleagues Erik Paulsen of Minnesota and Brian Bilbray of California, in this opinion piece published by Roll Call.