Buckeye State Is Home To Over 1,900 Medical Device Companies Who Employ 22,000 Ohioans

Earlier this month, Tony Dennis the CEO of BioOhio penned a column in the Cleveland Plain Dealer where he expressed his frustrations with President Obama and Senator Sherrod Brown for passing a $2.5 trillion government-run healthcare bill that is partially financed by a 2.3 percent tax increase on medical device companies, because it thwarts innovation and job growth.

What’s remarkable is that Sherrod Brown told his party boss Senate Majority Leader Harry Reid (D-NV) that the medical device tax in ObamaCare would kill jobs in Ohio, yet he still voted for it.

• POLITICO:  “In a preview of a major fight to come, 10 Democratic senators [including Sherrod Brown] — a mix of liberals and moderates — are protesting an annual $4 billion tax on the medical device industry as a killer of jobs and research. They sent a letter Thursday to Senate Majority Leader Harry Reid (D-Nev.) and committee chairman Max Baucus and Tom Harkin urging them to ‘moderate’ the tax to help fund health care reform.” (Carrie Budoff Brown, “Dem Senators Protest Medical Device Tax,” Politico, 10/8/09)

Now, the Kalamazoo Gazette has reported that Stryker – an orthopedic company based in Michigan – will soon layoff 1,000 worker and this comes on the heels of a warning from Boston Scientific that the medical device tax could kill 45,000 jobs nationwide.

“When Senator Brown rubberstamped President Obama’s government-run healthcare bill into law he didn’t just cut Medicare by $500 billion to pay for this $2.5 trillion experiment, he also voted to raise taxes on Ohio’s 1,901 medical device companies, which will kill thousands of good paying jobs,” said National Republican Senatorial Committee (NRSC) spokesman Jahan Wilcox.  “With 525,000 unemployed Ohioans, it’s clear the Buckeye State cannot afford the tax-and-spend, job-killing agenda of Sherrod Brown.”

Background…

Government-Run Healthcare Is A Job-Killing Law For Ohio’s Medical Device Companies And Their Employees

Lorain County, OH: The Threat Of Obama’s $20 Billion Medical Device Tax Caused Businesses To Stop Hiring. “[I]n the short run, some of his policies could cost existing jobs, especially health-care reform, if it is enacted. One of the few large businesses that has prospered in Lorain County in recent years has been Invacare, a maker of home medical devices … The company has 1,300 employees in Lorain County but has stopped hiring in anticipation of a tax on medical devices that was proposed to help pay for the president’s health-care reform plan.” (Michael A. Fletcher, “Assessing Obama’s Promises Of Jobs In A Hub Of Manufacturing,” The Washington Post, 1/22/09; “Estimated Revenue Effects Of The Manager’s Amendment To The Revenue Provisions Contained In The ‘Patient Protection And Affordable Care Act,” Joint Committee On Taxation Report, 3/20/10)

Boston Scientific Says Obama’s Medical Device Tax Could Kill 45,000 Jobs Nationwide.  “Boston Scientific’s chief executive yesterday ripped a tax on medical devices slated for 2013 and anticipated major layoffs at the Natick company if the levy — part of President Obama’s health-care overhaul — isn’t repealed. … Elliott’s comments came a week after trade group AdvaMed released a study finding that the 2.3 percent federal excise tax would lead to more than 45,000 job losses nationwide …” (Greg Turner, Boston Scientific CEO: Medical tax will mean job cuts, Boston Herald, 09/15/11) 

Kalamazoo’s Stryker Orthopedic Company Will Soon Reduce Its Workforce By 5 Percent By 2012 To Pay For Stabenow’s Medical Device Tax.  “Stryker Corp.’s plans to cut its worldwide workforce by 5 percent by the end of 2012 and take other restructuring steps in order to cut its operational costs could mean a loss of about 1,002 of its worldwide workforce, and a loss of about 112 workers in the Kalamazoo area, if the cuts are made across-the-board. … The company said the restructuring and cost-cutting are needed to prepare for a new Medical Device Excise Tax scheduled to begin in 2013. Industry officials have said the excise tax will significantly add to the cost of medical products made in the United States.” (Al Jones, Stryker Corp.’s plan to cut its workforce may mean 112 jobs lost in the Kalamazoo area, Kalamazoo Gazette, 11/11/11)

Massachusetts Medical Device Companies Said Tax “Could Stifle Innovation, Drive Jobs Overseas, And Force Them To Raise Prices.” “On the same day, Patrick hosted more than a dozen representatives from the Massachusetts medical device industry at the State House. They told him the tax could stifle innovation, drive jobs overseas, and force them to raise prices. Richard A. Packer, chief executive of defibrillator maker Zoll Medical Corp., based in Chelmsford, has met with Brown and Patrick to discuss the issue. ‘I think the medical device bill is ill-conceived, and is not a good part of the legislation,’ he said. ‘I’m in favor of repealing it in total, or going in and seeing how it can be adjusted.’” (D.C. Denison, “Repeal Of Medical Devices Tax Unlikely,” The Boston Globe, 4/3/10)

MassDevice.com’s Brad Perriello Said The Medical Device Tax Will Cause More Pain For “Mid-Sized And Smaller Companies,” Pushing Some “From Black To Red.” “I think the real impact is going to be on the mid-sized and smaller companies, where profit margins are a lot more narrow, and in some cases are so narrow that the effect of the tax will push a small minority of the companies from black to red…” (Annie Baxter, “Excise Tax Has Local Medical Device Makers Concerned,” Minnesota Public Radio, 3/29/10)

2,200 Jobs At Allergan, An Irvine, CA Based Medical Device And Pharmaceutical Company, Are At Risk. “David Pyott, chairman and CEO of Allergan, a global pharmaceutical and medical device company based in Irvine, met with me Wednesday to discuss the hard implications of President Obama’s health care bill and how it will affect Pyott’s company and the broader health care industry. To put things in perspective, Allergan employs about 8,300 people worldwide, and roughly 2,200 of them work in Irvine (well over 200 are UC Irvine graduates). The company had revenue of about $4.5 billion last year.” (Brian Calle, Op-Ed, “CEO Series: Obamacare Impact,” The Orange County Register, 4/25/10)