At a press conference in front of Onyx Medical Corp., U.S. Senator Lamar Alexander (R-Tn.) said he’d push for a repeal of the medical device tax and press the Food and Drug Administration to lessen regulatory burdens on the industry, calling it “critical to creating jobs for Memphis and Tennessee.”
“This burdensome tax on medical devices is already costing Tennesseans jobs and hurting a crucial Memphis industry by increasing costs, stifling investment and ultimately driving up prices for patients in need of medical help,” Senator Alexander said. “Memphis has become an important center for medical devices, and the industry ranks as Tennessee’s top export. Repealing the Obamacare tax on medical devices – devices that save lives – is one of the most important things we can do to create good jobs for Tennesseans.”
The medical device tax, passed as part of President Obama’s health care law, places a 2.3 percent excise tax on medical device manufacturers. Tennessee’s Department of Economic and Community Development has identified medical device manufacturers as among the state’s most important exports, with U.S. Census data showing its $2.1 billion in 2012 ranks at the top of all state exports by dollar value.
Senator Alexander is a cosponsor of legislation to repeal the tax. He also supported a successful amendment to the Senate budget resolution in March, which demonstrated bipartisan support for repeal.
Senator Alexander’s remarks came before a tour of Onyx, which makes materials such as screws and wiring for medical devices. The senator also discussed the importance of battling over-regulation of the industry by the Food and Drug Administration, and working to make sure sequester cuts don’t negatively impact the use of federal money that the industry is still paying in full.
While Onyx does not pay the medical device tax, its customers that make medical devices do, putting price pressure on Onyx to deal with the cost of the tax and harming investment in its industry.
Senator Alexander said, “Onyx is a success story in an industry facing hardship at the hands of Washington.”
He cited as another example Smith & Nephew, a medical device manufacturer with a Tennessee presence that has announced it laid off nearly 100 employees in Tennessee and Massachusetts as it deals with the tax. The Medical Device Manufacturers Association has also reported thousands of lost jobs in the industry.