Report: Medtech tax has cost 33,000 jobs already

February 18, 2014 by Arezu Sarvestani

Medical device industry lobbying group AdvaMed reports that about 33,000 medtech jobs have been lost already as companies deal with the medical device sales tax.

Survey: Medtech tax has cost 33,000 jobs already

The medical device industry has already lost some 33,000 jobs as a result of the medical device tax, according to a report from lobbying group AdvaMed.

Including indirect repercussions in related industries and the economy in general, AdvaMed estimated that as many as 165,000 jobs have been compromised due to the impact of the 2.3% medical device sales tax that took effect last year. The findings came from an AdvaMed survey of its member companies, using responses from 38 firms to extrapolate effects in the industry at large.

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"Contrary to the claims of some of the proponents of this tax, companies are simply not able to pass the tax on and are not anticipating a windfall from expanded coverage," AdvaMed president & CEO Stephen Ubl said in a conference call with reporters today. "At a time when unemployment remains at historic highs and there is bipartisan interest in growing advanced manufacturing jobs here in America, our industry is experiencing an unprecedented real-world negative impact on jobs and R&D due to this tax."

In addition to layoffs, device makers slashed their R&D budgets, reduced employee pay, moved manufacturing overseas, reduced spending in start-ups, canceled or put off new facilities and took other actions to deal with the cost of the new levy, according to the report.