AdvaMed claims 195,000 jobs lost to medical device tax (MassDevice)
AdvaMed claims that the medical device tax will wind up costing the U.S. economy 195,000 jobs, citing a survey of 55 of its medical device company members.
The national medical device industry lobby today claimed that the medical device tax enacted as part of Obamacare will wind up costing the U.S. economy 195,000 jobs and hamstring medtech firms’ R&D efforts.
AdvaMed updated its annual look at the impact of the 2.3% levy on U.S. sales of prescribed medical devices, which went into effect at the beginning of 2013. The report is based on a survey of 55 of the trade group’s members, representing 20% of its total roster.
“This survey on the effects of the tax after 2 years makes it clear that the passage of time has only added to the negative effects of this burdensome tax,” AdvaMed CEO Stephen Ubl said during a conference call with reporters today.
The job losses claimed in the report are based on a methodology that extrapolates an estimate of the total U.S. spend on medtech in 2011, which was assumed to equal medtech companies’ revenues.
Using percentage increases in revenues in 2012 and 2013 for publicly traded pure-play device makers, the report estimates total industry revenues of $165.4 billion. By that estimate, the 55 respondents to the AdvaMed survey represented 49% of total industry revenues, at $81.1 billion. To reach its job loss estimate, the group multiplied respondents’ numbers for jobs lost and foregone by a factor of about 2.04 (165.4 divided by 81.1), according to the report.
The report claims that the tax resulted in 14,000 lost jobs by the end of 2013, another 4,500 last year and will result in some 20,500 unfilled jobs over the next 5 years.
“Considering both jobs lost and jobs not created, the tax will result in 39,000 fewer industry jobs,” according to the report.
Independent estimates that there are 4 indirect jobs for each medical device job means another 156,000 lost jobs, for the 195,000 total estimate, the report claims.