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MDMA Survey Shows Device Tax Suspension Creating Jobs, Increasing R&D

Tuesday, January 10, 2017  
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MDMA Survey Shows Device Tax Suspension Creating Jobs, Increasing R&D

Temporary status of suspension limiting opportunities for innovation and growth

WASHINGTON, DC – A new survey conducted by the Medical Device Manufacturers Association (MDMA) shows that suspension of the medical device tax has led to significant increases in R&D investments and job creation, but that the temporary state of the policy is limiting innovation.

“Medical technology innovators have boosted patient care and spurred job creation as a result of the device tax suspension, and we need to make sure this punitive policy is fully repealed once and for all,” said Paul LaViolette, Executive Chairman of CardioFocus

and Chairman of MDMA.  “The health care ecosystem desperately needs additional investments in the cures and therapies of tomorrow, and our nation needs more high-tech manufacturing jobs.  A permanent repeal of the medical device tax will support both of these critical priorities.”

The survey included over 100 responses from senior executives at some of the United States’ most innovative and entrepreneurial medical device companies. 

Notably, three out of four innovators said that they would make additional investments in job creation and R&D if the device tax was permanently repealed, as opposed to a temporary suspension.

“Both the Senate and the House of Representatives have made it clear that there is broad, bipartisan agreement that the medical device tax needs to be repealed,” said Mark Leahey, President and CEO of MDMA.  “While much of the damage caused when the device tax was in place cannot be undone, today med tech innovators are investing the additional resources in communities throughout the United States.  Congress needs to put a permanent end to what they agree is a misguided and destructive policy.”

Other top findings of the survey include:

  • 70 percent of companies increased hiring and created new jobs as a result of the suspension
  • 73 percent of pre-revenue companies noted that suspension of the device tax has improved the climate for raising capital and funding
  • When asked how much respondents have increased their R&D budget, the average increase was 19 percent

In addition to the two-year suspension enacted in the 114th Congress, the House of Representatives overwhelmingly voted for a full repeal of the device tax by a veto-proof majority of 280-140.  This built off of the 113th Congress where 79 Senators voted in support of repealing the medical device tax.

To see a summary of the survey, please CLICK HERE.