The California Healthcare Institute Responds to New Efforts to Repeal the Federal Medical Device Excise Tax

Tax Threatens Job Growth, R&D Productivity

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As a tax on revenues, not profits, it especially discriminates against smaller device companies with pioneering ideas that have yet to reach the marketplace

La Jolla, Calif. (PRWEB) February 07, 2013

The California Healthcare Institute (CHI) today released a statement in response to reintroduced legislation to repeal the 2.3 percent federal excise tax on medical device manufacturers.

“CHI strongly supports efforts to repeal the medical device excise tax, which threatens important research and development, and is already pressuring jobs at a time when we should be doing everything we can to encourage investment, innovation and job creation,” said CHI President and CEO David L. Gollaher, Ph.D. “As a tax on revenues, not profits, it especially discriminates against smaller device companies with pioneering ideas that have yet to reach the marketplace.”

Given the size and scope of the medical technology sector’s presence in California, the 2.3 percent tax has a disproportionate impact on the state. California is home to more than 1,200 medical technology companies — more than any other state in the nation — and the nearly 72,000 medical device jobs in California represent roughly 17 percent of the total U.S. medical technology workforce. Vibrant medical technology clusters exist in and around San Diego, San Francisco/Silicon Valley, Orange County and Sacramento, as well as the Los Angeles, Ventura/Santa Barbara, and Riverside/San Bernardino regions.

In California and nationwide, the tax has already had a negative effect on industry innovators, with large and small companies looking for ways to cut costs, which generally means hiring fewer workers and reducing investments in R&D.

CHI continues to work with California’s congressional representatives, including many who have signed on to co-sponsor the measure, in order to repeal this destructive tax. CHI applauds the bill’s original co-sponsors: John Campbell (R-Irvine), Susan Davis (D-San Diego), Jeff Denham (R-Turlock), Darrell Issa (R-Vista), Doug LaMalfa (R-Richvale), Scott Peters (D-San Diego), Ed Royce (R-Fullerton), David Valadao (R-Hanford) and Juan Vargas (D-San Diego).

About CHI
CHI represents more than 275 leading biotechnology, medical device, diagnostics, and pharmaceutical companies, and public and private academic biomedical research organizations. CHI’s mission is to advance responsible public policies that foster medical innovation and promote scientific discovery. CHI’s website is http://www.chi.org. Follow us on Twitter @calhealthcare, Facebook, LinkedIn and YouTube.


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