Medical Device Tax Unfair to Indiana

By Mike Pence

Indiana is a leader in the medical device industry and its long history in the field is well-known.

In the late 1800s, Revra DePuy invented the fiber splint to replace wooden staves that were being used to immobilize fractures.  The demand was so great that DePuy founded the DePuy Manufacturing Company in Warsaw, Indiana.  The company that bears DePuy’s name as well as Zimmer, Biomet and dozens of others have helped make the region around Warsaw, Indiana, the orthopedic capital of the world.

Other companies like Cook Medical in Bloomington, Boston Scientific in Spencer, and Roche in Indianapolis, to name just a few, help improve the lives of people worldwide every day by making orthopedic, cardiovascular and other specialized medical devices.  All told the medical device industry employs more than 20,000 Hoosiers, with nearly 6,800 in Warsaw alone.  Every day these researchers, scientists, technicians and high-tech manufacturers produce a multitude of life-saving and life-enhancing products that are sold around the world, generating an economic impact of more than $10 billion in Indiana.

Unfortunately, these jobs and this thriving sector of Indiana’s economy is at risk due to an excise tax on medical devices that was included in ObamaCare.  If Congress does not repeal this tax before the end of the year, a 2.3 percent tax will be levied on the sale of medical devices by a manufacturer, producer or importer, including everything from artificial knees and hips to stents and catheters.   

The tax will cost an estimated $28.5 billion over nine years and cost our state more than 2,000 jobs, hurting the companies that make the products and the people who need them. 

This week, the U.S. House of Representatives will vote on the Health Care Cost Reduction Act of 2012 (H.R. 436), bipartisan legislation that will fully repeal the medical device tax.  I am a cosponsor of this legislation and look forward to supporting it.  During this time of high unemployment and a continuing difficult economy, we need to do everything in our power to lift up our nation’s innovators, not stifle them with higher taxes. This week Congress can demonstrate its commitment to job growth by repealing ObamaCare’s harmful medical device tax.

Indiana takes great pride in manufacturing precision medical equipment that changes people’s lives.  Repealing the medical device tax will ensure that Hoosiers can continue to produce these innovative products, and Indiana can continue to be a leader in the medical device industry. 

Comments

[Ryan Farmer]

And in exchange for not taxing them a few percent, the 10,000% markup on medical equipment is expected to change?

I doubt it, but any excuse to stop taxing companies that bring in billions of dollars a year and continuing to shift the tax burden onto working class families seems to fly with most of the Republican Party.

If we're going to give any company a tax break based on the nebulous statement that "it may create jobs" or "it might lead to lower prices for the consumer", we ought to hold them to creating those new jobs or cutting prices like they say they will.

The Republicans have proven time and time again that when you give the rich a tax cut, they either stuff it in some low-risk investment that doesn't cause any kind of positive ripple effect throughout the US economy, or they take the tax cut, fire Americans, and invest the money in foreign countries.