U.S. Sens. Bob Casey and Pat Toomey today joined a bipartisan group of senators hoping again to repeal the 2.3 percent excise tax on medical device manufacturers.
The tax, part of the Patient Protection and Affordable Care Act, went into effect Jan. 1. It is expected to raise nearly $30 billion in revenue over 10 years — a reported $194 million per month.
The renewed effort backed by the Pennsylvania senators is being called the Medical Device Access and Innovation Protection Act in the Senate. House members also have introduced a repeal measure.
The primary argument is that the tax unfairly burdens small businesses and manufacturers. It has been labeled a job killer and something that will impact research and development, according to those in the industry.
"It's killing their cash flow," said Christopher Molineaux, president of Chester County-based Pennsylvania Bio, the trade group for the state's life sciences industry. "You have to pay the 2.3 percent whether you have been paid or not."
The vast majority of these companies are not making a profit yet, he said.
"There are ways to address it. Lay people off, freeze hiring or stop investing in R&D," he said.
The Advanced Medical Technology Association said the tax puts 43,000 American jobs at risk.
"This (tax) will undoubtedly increase the cost of dental care in the country," said Michele Mummert, a spokeswoman for York-based Dentsply International Inc., one of the largest professional dental products companies in the world.
The excise tax affects about 90 percent of the products Dentsply sells, she said.
"If dentists increase costs, it will reduce access to care to some degree in the country," she said. "Some people may choose not to seek dental care."
The tax on dental devices is estimated to be $160 million, which is more than 70 times the estimated increase in profits for the industry, according to the Dental Trade Alliance.
That could hinder manufacturers' ability to invest in new products, Mummert said. On average, Dentsply introduces 20 to 30 new products each year.
"I wouldn't say we're adjusting our investment in research," she said.