U.S. Senator Scott Brown filed a bill Thursday that would repeal a $2 billion per year tax on the medical device industry, fulfilling a promise he made to the industry during his campaign.
In remarks on the floor of the Senate, Brown said, “I am extremely concerned that this tax could threaten jobs in my state, reduce domestic investment in research and development and ultimately diminish access to life- saving medical devices for patients. Medical technology companies employ more than 375,000 workers in the United States. In Massachusetts alone, we have more than 225 medical device firms, which employ more than 20,000 workers, and contribute nearly $1 billion in payroll. Medical devices are one of our state’s top exports, contributing $6 billion to our state’s economy.”
The tax, which is 2.3 percent of revenue, was approved as part of national health reform last March and is set to go into effect Jan. 2013. Massachusetts would be hit disprportionately by the tax because the state is home to three of the ten largest medical device manufacturers in the U.S. — Natick, Mass.-based Boston Scientific (NYSE: BSX), Andover, Mass.-based Philips Healthcare and Covidien (NYSE:COV), with U.S. headquarters in Mansfield.
Brown also addressed the confusion currently in the marketplace over how the tax would be implemented.
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This story first ran in the Boston Business Journal on February 3, 2011.