U.S. Senator Kelly Ayotte (R-NH) today visited Corflex, a Manchester veteran-owned small business that manufactures and sells orthopedic medical products. During her visit, Senator Ayotte toured the production and packaging facilities and spent time answering questions from employees about making health care more affordable, improving the nation's regulatory climate, and lowering the corporate tax rate.
She also heard from CEO Paul Lorenzetti about his concerns with an onerous new excise tax on medical devices. While the company has experienced steady growth and now employs 43 workers, Lorenzetti said Corflex could struggle to remain competitive because of the Medical Device Tax, which is scheduled to take effect in 2013 as part of President Obama's health care law as a means to finance the costs of the law. Under the new tax, medical devices ranging from surgical tools to bed pans would face a 2.3 percent excise tax. The tax is especially burdensome for start-up medical device companies because the tax is not based on company profits, but rather, takes a cut of every sale made. New Hampshire is home to about 50 medical device companies employing approximately 3,800 people.
Senator Ayotte, a member of the Senate Small Business Committee, is cosponsoring legislation that would repeal the Medical Device Tax, and she renewed her call for repealing the tax during today's visit.
"The medical device tax could cause profitable businesses like Corflex to lose money, cut investment budgets, and reduce jobs or move them overseas," said Senator Ayotte. "Companies like Corflex are creating good jobs and making innovative products - and we need to keep them here in the U.S. I will continue to work hard to repeal this burdensome new tax."
Corflex CEO Paul Lorenzetti said, "We would like to thank Senator Ayotte for taking the time out of her busy schedule to tour Corflex today and discuss the Medical Device Tax. If this revenue based tax goes into effect in January 2013, it will have devastating effects on Corflex and the other 50 medical device companies based in New Hampshire. If not repealed, it will ultimately force companies like ourselves to cut operations, research and development and possibly employment levels."