Citing data from the U.S. Census Bureau’s Annual Survey of Manufacturers, a medtech industry lobby said that the industry lost nearly 29,000 jobs when the medical device tax was in effect.
AdvaMed, the Washington, D.C. advocacy group said on Wednesday that the data for the eight industry subsectors show that employment fell to 372,638 in 2015, from 401,472 in 2012, a decline of more than 7 percent. The group squarely blames the loss on the 2.3 percent device tax imposed domestic sales as part of the Affordable Care Act also known as Obamacare.
“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), in a news release. “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.”
What is missing from AdvaMed’s analysis is that the medical device industry is undergoing a massive consolidation. Several top tier companies have merged in billion-dollar deals — Zimmer and Biomet; Medtronic and Covidien; Becton Dickinson and CareFusion to name just a few.
And as everyone knows, consolidation typically leads to job losses.
Specifically, as the healthcare industry moves to an outcomes-based and value-based model, large companies that previously had a veritable army of sales reps to maintain physician relationships are cutting those jobs. Companies are shifting entire business models and that disruption could just as well lead to lower headcounts.
A Deep-dive Into Specialty Pharma
A specialty drug is a class of prescription medications used to treat complex, chronic or rare medical conditions. Although this classification was originally intended to define the treatment of rare, also termed “orphan” diseases, affecting fewer than 200,000 people in the US, more recently, specialty drugs have emerged as the cornerstone of treatment for chronic and complex diseases such as cancer, autoimmune conditions, diabetes, hepatitis C, and HIV/AIDS.
It would have been a more interesting analysis to dig deeper and see what exactly were the roles lost between 2012 and 2015 and how many R&D positions were eliminated or moved elsewhere in this period.
Still, any job loss hurts and it’s no surprise that the device lobby has a convenient scapegoat in the device tax. Back in 2013, PolitiFact reviewed the claim that the tax had cost thousands upon thousands of job losses and gave it a “half true” rating.
But whether the tax has exacted a whole world of pain may not be worth litigating anymore. With Republicans enshrined in Congress, and broad bipartisan support for repeal, this is one regulation that both sides will likely gladly kill.
AdvaMed believes that with the pause the medtech industry has already added jobs and is reinvesting and their hope is that with a permanent repeal, the industry will thrive.
Photo: freedigitalphotos user renjith krishnan
