Sen. Brown Urges Senate To Support Amendment To Repeal Medical Device Tax


By:  Scott Brown
Date: July 12, 2012
Location: Washington, DC

U.S. Senator Scott Brown (R-MA) spoke from the Senate floor today to urge his colleagues to repeal the medical device tax that will go into effect next year as part of the federal health care law. Senators Brown and Orrin Hatch (R-UT) filed an amendment yesterday to the Small Business Jobs and Tax Relief Act (S. 2237) that would repeal the 2.3 percent excise tax on medical device sales. In his speech, Senator Brown highlighted the impact the tax will have on Massachusetts businesses and workers in the industry.


"This 2.3 percent tax on medical device sales will cost our economy thousands of jobs and limit Americans' access to the most groundbreaking, state of the art medical devices. For example, Covidien, a medical device company with 2,000 employees in my home state has estimated that taxable medical devices represented approximately 30 to 40 percent of their total net sales in 2011. What that means in plain language is that this tax will cost Covidien between $80 million and $107 million dollars annually."

"Over the last five years Covidien has more than doubled its R&D investment, and launched more than 100 new products. One of those products is a device that restores blood flow to the brain in patients suffering from stroke by mechanically removing blood clots from blocked vessels…another product provides the first safe and effective treatment for large or giant, wide-neck brain aneurysms available on the market. But losing $80 to $107 million dollars in revenue each year is going to put Covidien's continuing growth in very, very real jeopardy."

"Another medical device company, Stryker Corporation, said late last year that they would begin cutting five percent of their workforce in response to the tax. That's 1,000 jobs gone as a direct result of this tax. Stryker expects the device tax to cost them $130 million to $150 million dollars in the first year alone."

"These are just two examples, but in Massachusetts we have over 400 medical device companies. The Massachusetts medical device industry employs nearly 25,000 workers and contributes over $4 billion to our economy. Massachusetts alone is expected to lose over 2,600 jobs as a direct result of this tax."

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