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Op-ed: Repeal medical device tax to help patients and Utah economy

Published December 17, 2016 2:51 pm
This is an archived article that was published on sltrib.com in 2016, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

In an undeniable victory for patients and medical innovation, last month Congress passed historic legislation known as the 21st Century Cures Act. When fully implemented, this legislation will help accelerate the discovery, development and delivery of medical advancements to ensure more timely access to new treatments and cures for patients in need. Passage of the legislation would not have been possible without support from both sides of the political aisle, including U.S. Sen. Orrin Hatch.

This year, Congress has the opportunity to make an even more positive impact on the American innovation ecosystem, and do something great for Utah's patients, researchers and medical technology innovators: Repeal the onerous medical device tax for good.

Two years ago, Hatch — as chairman of the Senate Finance Committee — led the charge in securing the current suspension of the device tax — a 2.3 percent excise tax on sales of all medical devices not sold at retail – providing much-needed relief to medical technology innovators in our state. In fact, Hatch has authored and advanced repeal legislation every year since the tax was enacted.

Because of the suspension, companies across Utah are increasing investment in research and development, improving employee benefits, re-starting delayed projects and, importantly, adding many needed jobs to our state's economy. Simply put, temporary suspension of the device tax is working: Utah's medical technology companies have been able to strengthen our economy and innovation ecosystem due to the savings.

At BD, a company that proudly employs more than 1,200 skilled and dedicated workers at their manufacturing facility in Sandy, the savings from the device tax suspension is enabling the company to accelerate its innovation strategy in both its medical and life science segments. BD is reinvesting the savings from the tax into a number of R&D projects including medication management and genomics. At Edwards Lifesciences, a leader in the science of heart valves and hemodynamic monitoring, the suspension has provided additional flexibility to accelerate investments in their structural heart initiatives. Many other companies with a presence in Utah — companies like Varian Medical Systems and Merit Medical, among others — have also reallocated funds they were forced to set aside to pay the tax back into their employees, and research and development.

But while the temporary suspension has been a good first step, it is not enough. Innovators face uncertainty on when this tax will be repealed once and for all. These companies are already making decisions about whether to maintain new investments in their operations, R&D and workforces to ensure a long-term pipeline of life-changing medical technologies. Early action in the first quarter of 2017 will immediately open the door to this sustained investment.

Utah is home to a growing and vibrant life science community and is an important economic engine with approximately 1,000 companies employing 27,000 Utahns, ranking 13th in the country for life science employment. The medial technology industry contributes approximately $5 billion to Utah's economy. It is imperative we continue to foster an environment where Utah can be recognized as a respected global leader in the medical technology innovation that is creating jobs, and saving and improving quality of life for patients.

We thank Hatch for his leadership and commitment to Utah's economy, innovators and patients, and urge him and the rest of the 115th Congress to act swiftly this year to repeal the onerous medical device tax once and for all. Doing so will provide certainty for Utah companies making decisions affecting tomorrow's life-changing medical technologies.

Scott Whitaker is president and CEO of AdvaMed (the Advanced Medical Technology Association). Kelly Slone is president and CEO of BioUtah.






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