Report: Med Tech Industry Lost More Than 28,000 Jobs Under Medical Device Tax

Industry group calls for “full and permanent repeal”

The U.S. medical technology industry saw its job ranks fall by nearly 29,000 while the medical device excise tax was in effect, according to the latest figures from the U.S. Department of Commerce. Specifically, from 2012 to 2015, the number of U.S. med tech jobs dropped from 401,472 to 372,638–– a loss of 28,834 jobs (7.2%) during that period.

“These numbers reveal just how devastating of an impact the device tax had on our industry and underscore the urgent need for permanent repeal,” said Scott Whitaker, president and CEO of the Advanced Medical Technology Association (AdvaMed). “At a time when American device manufacturers are ready to grow and create jobs, the best message this Congress and the Administration can send is through a full and permanent repeal.”

The 2.3% medical device tax was imposed by the Patient Protection and Affordable Care Act in 2010 as one of several revenue-raising provisions designed to finance the Obama administration’s health care reform. The tax took effect in January 2013.

Based on data updated by the Commerce Department last month, jobs began to drop in 2012 in anticipation of the device tax going into effect the following year. The decline rapidly accelerated in 2014 with an additional 27,022 job losses. The medical device tax was suspended for two years beginning in late 2015.

The medical technology industry consists of eight subsectors:

  • In vitro diagnostic substance manufacturing
  • Electromedical and electrotherapeutic apparatus manufacturing
  • Irradiation apparatus manufacturing
  • Surgical and medical instrument manufacturing
  • Surgical appliance and supplies manufacturing
  • Dental equipment and supplies manufacturing
  • Ophthalmic goods manufacturing
  • Dental laboratories

Sources: AdvaMed; February 8, 2017; AdvaMed Employment Analysis; February 7, 2017; and Congressional Research Service; January 9, 2015.