Looks like employment’s steady globally in the medical device sector, despite the doom-and-gloom provocations from those stateside who have been concerned about the U.S. medical device excise tax killing medtech jobs.
Most medical manufacturers actually increased their employee count for the year, according to a new report from EP Vantage. Of the top 15 device makers, only three experienced reductions in headcount – and two of those were simply because the companies spun off their pharmaceutical divisions. The remaining 12 increased their employee bases by 6 percent.
“With more hiring than firing occurring and continued growth expected this year, the medtech industry may finally be picking up steam,” the report said.
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A Forbes op-ed cites the report as rationale for why those clamoring for a repeal of the tax need a new argument, since stifling job growth certainly isn’t one of them. The medical device excise tax, enacted as a revenue-generating portion of the Affordable Care Act, skims 2.3 percent from revenues in the sector.
“This is not what (we) were led to expect before the excise tax started to bite,” John R. Graham, former vice president for payment and health care delivery research and policy at Advamed, wrote in the article. He continues:
What can be done to move the repeal along? Clearly, new research is needed to qualify the employment situation in the industry. Also, the industry has recoiled from suggesting a “pay for” to replace the revenue lost to the government if the tax is repealed. Finding a “pay for” is an important step for legislative success.
The main reason for large company growth was due to enhanced M&A activity, the report said, which could mean that it’s still unclear whether the medical device sector has been impacted more among smaller companies. An employee count of the top medical device firms can be seen below:
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Here’ s a chart of the top 10 firers of 2013:
The report said that employment growth doesn’t necessarily mean a company is healthy – and these large companies have had a rather turbulent year. Medical device sales are falling as hospitals make cuts and shore up their budgets to save costs; reimbursement, as well, is under pressure. The report closes out with this:
…the story in medtech employment over the course of 2013 is one of slow and steady growth, enlivened by a handful of dramatic mergers and divestments. But this story is going to change in the coming years as even bigger mergers and spinouts produce greater peaks and troughs. Fasten your seatbelts, it’s going to be a bumpy ride.
