Cook Group chairman Stephen Ferguson continues to beat the drum for repeal for the 2.3% medical device tax, calling the levy a "bad idea that will only get worse with time" in an op-ed piece for the Des Moines Register.
The tax continues to draw fire as the 2012 election cycle kicks into high gear, with pundits and industry advocates urging Congress to repeal a measure they claim threatens jobs, investment, patient access and U.S. prominence in med-tech.
"The challenge for the historic partnership between patients, government, health care providers and U.S. medical device companies should be to find better ways to provide care for patients," Ferguson wrote in the op-ed, "not new ways to tax our nation’s most innovative industry."
A BioEnterprise Midwest Health care Venture Report found a 24% decrease in investment in health care startups in the Midwest for the first half of 2011, compared to the same time in 2010, according to Ferguson.
"[A]ngel investors will have to get in line behind Uncle Sam before they get any return on their capital. Who’s going to sign up for that deal?" he wrote.
Ferguson’s been vocal in pushing for repeal of the med-tech levy, set to go into effect in 2013, which he has said will kill 15% of Cook Medical’s profits. He estimated that the new levy will up his med-tech operation’s tax burden to 55% of profits.
"For a company like ours, which pays 35 percent of our net earnings in federal corporate taxes and another 4 to 5 percent in state and local corporate taxes, the excise tax translates to another payment that will consume 15 percent more of our earnings," Ferguson told Indiana University’s Health Forum on medical technologies in October. "This creates tremendous pressure for us to move manufacturing to Europe and other parts of the world."
In his latest statement, he noted that Cook has already put the kaibosh on plans to build one new factory a year in the U.S., since the plant the company opened last year in Canton, Ill., cost about as much as 1 year’s worth of taxes under the upcoming levy.
He also cited industry lobby AdvaMed’s estimates that the tax will result in 43,000 jobs lost in the medical device field, and noted Stryker’s recent announcement that it would cut 5% of its workforce in the face of the increasing cost the tax will bring.
Conservative pundit Ramesh Ponnuru also panned the levy, which he dubbed the "tongue depressor tax," noting that the measure is facing more and more opposition in Congress. Nine Democrats and 216 Republicans have indicated their support for repealing the levy, according to a Ponnuru column for Bloomberg.
