Ayotte: Medical Device Tax Will Cost New Hampshire Jobs
Press Release
U.S. Senator Kelly Ayotte (R-NH) announced today that she is cosponsoring bipartisan legislation to repeal the $29.1 billion Medical Device Tax, an onerous new excise tax on medical devices that took effect January 1 as part of President Obama's health care law. The Medical Device Access and Innovation Protection Act, introduced by Senator Orrin Hatch (R-UT), would repeal the provision, under which medical devices have a 2.3 percent excise tax.
Senator Ayotte has long supported repealing the tax, which threatens New Hampshire jobs and stands to increase costs for consumers. New Hampshire is home to about 50 medical device companies employing approximately 3,800 people.
"Medical device manufacturers across the state have told me this tax will make it harder for them to invest and grow, and could result in job losses," said Senator Ayotte. "At a time when we need good-paying, sustainable jobs, this tax makes no sense."
"This tax will have a devastating effect on Corflex and the dozens of other medical device companies based here in New Hampshire," said Paul Lorenzetti, CEO of Corflex in Manchester. "If not repealed, it will ultimately force companies like us to cut research and development dollars, pass costs on to consumers, or even consider reducing our workforce."
Quinton Farrar, Vice President, Global Operations Technology, of Keene-based Smiths Medical, said "Repealing the medical device excise tax is about improving patient care, and investing more in innovation and jobs. The medical device tax has sadly already cost the United States thousands of jobs. Bipartisan action to repeal this tax is required before any more irreparable damage is done to a proud American success story."
The Wall Street Journal recently reported that several medical device companies have notified hospitals that they are implementing new surcharges and price increases to cover the costs of the device tax. Medicare's Chief Actuary has estimated that the tax will increase national health care costs by $18.2 billion in 2018. A 2011 study estimates that the tax threatens 43,000 jobs nationwide, and could result in $3.8 billion in lost wages.
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