Congress Should Act Now to Permanently Repeal The Medical Device Excise Tax

Posted: Updated:

There's a cloud of uncertainty hanging over one of Indiana's most important employment sectors - the medical device industry. A sales tax on medical devices that has been suspended since 2016 will resume in 2018 unless Congress takes action to repeal it by the end of this year.

At a time when technical advancement in the life sciences is at an all-time high, this medical device sales tax threatens to stifle medical advancements, stop new investment, and prevent future job growth. Furthermore, the Obamacare system the tax was designed to support is crumbling under its own weight. For all those reasons, it’s time for Congress to permanently repeal the medical device tax.

Medical device companies are crucial to the continuing advancement of medicine, and the technology they produce has been life changing for families. Consider NICO Corporation, an Indianapolis-based company that developed a revolutionary technology called NICO BrainPath. The new technology creates a path the size of a dime in a person’s brain for a surgeon to operate with minimal damage or invasion.

Beyond astounding medical breakthroughs, the medical device industry also supports high-wage Indiana jobs. Our state has among the highest concentration of medical device jobs in the U.S., with the life sciences industry alone employing approximately 56,000 Hoosiers. Indiana's booming life sciences industry is home to several medical device giants, such as Zimmer Biomet, Roche, Boston Scientific, and Cook Medical - along with countless smaller companies and startups. And, these medical device manufacturing jobs pay 41.7 percent more than the average wage in Indiana.

The negative effects of the medical device tax between 2013 and 2016 were clear: The tax resulted in the industry losing about $82 billion in medical device sales. Moreover, the tax stopped investment in new technology that was essential for healthcare advancement and for growing our economy.

Orthopediatrics, a company located in Warsaw, Indiana, had to freeze hiring and stop research and development for new products intended to help disabled children walk again because it needed the money to pay the medical device tax. Similarly, Cook Medical in Bloomington, Indiana, was forced to hold off on plans for five new manufacturing facilities in the Midwest so it could use the money to pay its tax bill.

The medical device tax has failed to achieve its purpose. Proponents of the tax said it would raise revenue to help pay for Obamacare and increase medical device sales. Instead, it has generated 27 percent less revenue than originally projected while reducing investment and billions in sales. We should be building a tax system that unleashes economic growth, not one that chokes it.

There are many complicated issues facing leaders in Washington in the months ahead, but repealing the medical device tax is a smart and straightforward move that will encourage innovation and economic growth in our state. Congress should act now to permanently repeal the medical device excise tax.

Eric Holcomb is the 51st governor of Indiana.

  • Perspectives

    • The Art of The Apology

      You screwed up. You handled something the wrong way, or you failed to handle it when you should have. Now what are you going to do? If you're a big company, you're probably going to screw up some more. Oh, you’ll attempt some kind of public apology, but it will be so halfhearted or passive-aggressive that you'll get called on it, and you’ll find yourself taking a second whack at the apology tree. That's the conclusion I’ve drawn as I've...



Company Name:
Confirm Email:
INside Edge
Morning Briefing
BigWigs & New Gigs
Life Sciences Indiana
Indiana Connections


  • Most Popular Stories

    • $600M Waste-to-Fuel Plant Coming to Gary

      A California-based renewable jet fuel and diesel producer has announced plans for a massive investment in northwest Indiana. Fulcrum BioEnergy Inc. says it will invest $600 million to build the Centerpoint BioFuels Plant in Gary, which will convert municipal solid waste into renewable transportation fuel. The project is expected to create up to 163 jobs by the end of 2022. The Indiana Economic Development Corp. says Centerpoint will be located at an industrial site that will be...

    • Preferred Route For I-69 Bridge Unveiled

      The team overseeing the I-69 Ohio River Crossing project has unveiled a preferred route for the extension of the interstate connecting Evansville and Henderson, Kentucky. The group has also released the Draft Environmental Impact Statement for the effort, which identifies preferred alternatives for the route with different tolling options. The project team, which includes the Indiana Department of Transportation and the Kentucky Transportation Cabinet, is recommending the...

    • Committee to Steer Future of Bloomington Hospital Site

      A newly-formed group tasked with providing the next steps for the Indiana University Health Bloomington Hospital property will hold its first meeting Monday. The Hospital Re-Use Steering Committee will begin the effort to re-envision the property, which will be acquired by the city upon completion of the new Indiana University Health Regional Academic Health Center.

    • Scotty's Brewhouse Files For Bankruptcy

      Indianapolis-based Scotty's Brewhouse has filed for Chapter 11 bankruptcy protection. The company says the decision was "driven largely by the challenges of some specific locations and was necessary because of the way the company was structured corporately." As a result of the deal, Scotty's will close four of its restaurants by the end of the year. In a news release provided to Inside INdiana Business...

    • Lids Sold in $100M Deal

      The Tennessee-based parent company of Lids Sports Group has found a buyer for the Zionsville-based headwear and team athletics retailer. Genesco Inc.'s (NYSE: GCO) $100 million deal involves Ames Watson Capital LLC in Maryland, which owns Utah-based sports apparel retailer Fanzz Gear Inc. Genesco entered into the definitive agreement with FanzzLids Holdings, which is a holding company operated by Ames Watson Capital affiliates. Sports licensing and ecommerce company...