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Mark E. Brager
January 10, 2017

New Data Shows MedTech Industry Poised for Greater Investment & Growth with Full Device Tax Repeal

Another Suspension of Disruptive Tax Won’t Have Same Economic Impact

WASHINGTON, D.C. – Medical technology companies are leveraging the 2015 suspension of the  medical device excise tax to expand their businesses and investments, according to a new survey from the Advanced Medical Technology Association (AdvaMed).

The study explored various impacts from the tax’s suspension – from job retention and creation to elevated R&D infusions – and suggests a broad range of strong economic activity. Industry analysts believe, however, greater economic growth would occur with permanent device tax repeal.

“Our members are bullish on future industry growth and job creation, as these numbers indicate,” said AdvaMed President and CEO Scott Whitaker. “But the one factor that concerns every manufacturer – both large and small – is the continued uncertainty regarding the medical device tax. With congressional action now, we can take the necessary steps to give this economy the shot in the arm it really needs.”

Conducted primarily in the fall of 2016, AdvaMed surveyed member companies with employees in all 50 states, representing approximately 30% of the industry, and learned that, even with temporary suspension of the device tax, manufacturers have taken short- to medium-term steps to re-invest those resources. Yet the association and many forecasters predict greater growth would come with full repeal.

“It’s not enough to delay or further suspend this disruptive tax, even if for a longer period of time. It simply does not give industry the certainty and confidence it needs to make these critical long-term R&D investments,” Whitaker said. “The time is now. We stand ready to help this administration, Congress, and the nation get Americans back on the job.”

Highlights of the medtech company survey follow. For more information on the device tax, visit here.

  • 73% of respondents increased or avoided reducing employment since the tax was suspended;
  • 33% invested in a new research facility, lab, or research infrastructure;
  • 83% reported increased R&D or avoided reducing R&D funding; and
  • 23% reported increasing investment in start-up companies.