Cook’s Plea To House and Senate: Support Repeal of Medical Device Tax

In short

Medtech industry watchers will no doubt be aware of the current hiatus relating to the 2.3% medical device sales tax levy in the US. At medlatest, as we’re essentially an EU-based vehicle, we’ve been interested observers from “over the pond” rather than avid followers or campaigners, but this week has seen a new act designed to repeal the original legislation, finding its way through the Committee on Ways and Means in the U.S. House of Representatives, with support from both parties. So things are reaching a head.

The committee voted 23-11 to approve legislation, H.R. 436 “Protect Medical Innovation Act of 2011,” that would repeal a medical device tax.


The excise tax is scheduled to go into effect in January as a key component in President Obama’s Patient Protection and Affordable Care Act (PPACA), so-called Obamacare. The primary legislation continues to generate fury among medical device companies who believe it would harm innovative small-to-midsize entities in particular. A sizeable body of the industry, supported by representative body Advamed, believes the 2.3% sales tax levy would lead major multinational companies to relocate existing plants and jobs and to build new plants in low-tax nations.

Not the least of the companies challenging the act is Cook Medical, the nation’s largest privately owned medical device company headquartered in Bloomington, Indiana and with further plants in Illinois, North Carolina, California and Pennsylvania. The company has now issued a press release urging senators to support repeal of the primary legislation, the content of which can be summarised in the comments of Cook group’s Chairman, Steve Ferguson.

Cook comments

“The committee vote is important to every medical device company, as well as suppliers who offer a multitude of services to companies, whether they mow the lawn, sell cars, provide parts, IT services, create components or otherwise offer commercial support,” said Steve Ferguson, chairman of the board of Cook Group, parent of Cook Medical.

“This repeal is vital to patients and their caregivers who want their critical-care devices manufactured in the U.S.”

“The threat of this imminent tax has already led companies to move existing manufacturing offshore and plan for future growth outside the U.S.”

Ferguson was hopeful that more Congress members than the 240 who have co-sponsored the repeal will vote to shelve the tax when it comes before the Senate.

“When legislative mistakes are made and policymakers learn more about an issue, the American people expect their leaders to change course based on that new information.”

SOURCE: Cook Medical, Business Wire