[Congressional Record Volume 161, Number 97 (Wednesday, June 17, 2015)]
[House]
[Pages H4472-H4478]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PROTECT MEDICAL INNOVATION ACT OF 2015
Mr. RYAN of Wisconsin. Mr. Speaker, pursuant to House Resolution 319,
I call up the bill (H.R. 160) to amend the Internal Revenue Code of
1986 to repeal the excise tax on medical devices, and ask for its
immediate consideration in the House.
The Clerk read the title of the bill.
The SPEAKER pro tempore. Pursuant to House Resolution 319, the
amendment in the nature of a substitute recommended by the Committee on
Ways and Means, printed in the bill, modified by the amendment printed
in part A of House Report 114-157, is adopted and the bill, as amended,
is considered read.
The text of the bill, as amended, is as follows:
H.R. 160
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Protect Medical Innovation
Act of 2015''.
SEC. 2. REPEAL OF MEDICAL DEVICE EXCISE TAX.
(a) In General.--Chapter 32 of the Internal Revenue Code of
1986 is amended by striking subchapter E.
(b) Conforming Amendments.--
(1) Subsection (a) of section 4221 of such Code is amended
by striking the last sentence.
(2) Paragraph (2) of section 6416(b) of such Code is
amended by striking the last sentence.
(c) Clerical Amendment.--The table of subchapters for
chapter 32 of such Code is amended by striking the item
relating to subchapter E.
(d) Effective Date.--The amendments made by this section
shall apply to sales in calendar quarters beginning after the
date of the enactment of this Act.
SEC. 3. BUDGETARY EFFECTS.
The budgetary effects of this Act shall not be entered on
either PAYGO scorecard maintained pursuant to section 4(d) of
the Statutory Pay-As-You-Go Act of 2010.
The SPEAKER pro tempore. The gentleman from Wisconsin (Mr. Ryan) and
the gentleman from Michigan (Mr. Levin) each will control 30 minutes.
The Chair recognizes the gentleman from Wisconsin.
Mr. RYAN of Wisconsin. Mr. Speaker, I ask unanimous consent that the
gentleman from Minnesota (Mr. Paulsen), the author of this legislation,
be permitted to control the time.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Wisconsin?
There was no objection.
Mr. PAULSEN. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker and Members, defibrillators, operating room monitors,
insulin pumps, pacemakers, heart valves, artificial hips, x ray
machines, ventilators, and ultrasound machines, these are life-
improving and lifesaving technologies that have reduced costs for the
improved health of millions of Americans.
Unfortunately, the President's healthcare law implemented a new tax
on all of these innovative devices, a tax on medical devices. Only in
Washington, Mr. Speaker, would you impose a tax on lifesaving medical
technology and think you will actually reduce healthcare costs. This is
bad tax policy, and it needs to be repealed.
The medical device industry is truly an American success story,
employing more than 400,000 people. In my State of Minnesota, 35,000
people are employed in this industry, 400 companies alone in the State
of Minnesota; 80 percent of device manufacturers are small businesses
with less than 50 employees; 98 percent of all these companies have
less than 500 employees.
It can take these small startups 10 to 15 years to even achieve
profitability or earn one penny of profit because they rely on
investment and the promise of a future of earnings to survive.
The device industry is a net exporter. We have a trade surplus with
our exports. Most importantly, these companies are producing lifesaving
and life-improving devices for millions of our patients across the
world.
Medical advancements have helped add 5 years to U.S. life expectancy
in the last two decades. It has helped slash the death rate from heart
disease by a stunning 50 percent and cut the death rate from stroke by
30 percent.
Devices have contributed to a 16 percent decrease in mortality rates
and an astounding 25 percent decline in elderly disability rates in
just the last 20 years of innovation. Medical innovation is leading and
will continue to lead the way we improve lives for our seniors who have
chronic disease.
Despite all the benefits that this industry provides, a 2014 Harvard
Business Review article recently found that the device industry now
faces one of the most uncertain competitive environments in the entire
country. Instead of hurting this industry, we should be empowering this
industry, creating more jobs, producing more innovation, and helping
more patients.
We often hear that America needs to start making things again to help
[[Page H4473]]
jump-start the economy, and one of the best ways to protect American
manufacturing and spur innovation is to repeal this harmful medical
device tax because here is what the tax is doing: it is costing us
jobs.
One company that I spoke with said they have never laid off any
employees in the last 22 years of their history of business, but they
laid off 25 employees, and they refrained from hiring another 15
employees because of the tax.
If you take it to a bigger, larger picture, up to 39,000 jobs have
been lost because of the tax since it has been imposed. These are high-
paying jobs, Mr. Speaker, that pay nearly $20,000 more than the
national average.
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And the 2.3 percent excise tax, it may not sound like much, but
here's the problem: it is taxing revenue; it is not taxing profit.
A small device manufacturer, they may not be making any money, but
they still have to pay that tax. One company I spoke to, they have 20
employees. They recently said they are borrowing $100,000 a month from
the bank just to pay the tax. That doesn't make any sense.
Mr. Speaker, it is also raising tax rates. Medical device companies
now have to pay one of the highest effective tax rates of any industry
in the world. Recent testimony in the Joint Economic Committee, there
was a small company from Minnesota that now says because of the tax,
they have a 79 percent effective tax rate. Who here can justify that?
It is also harming innovation because instead of investing in the
next generation of innovative devices that can literally save people's
lives, companies are spending money on compliance and accountants
instead of on research and development, which is the lifeblood of this
industry.
Members should know that this is separate from the debate about how
we reform health care. This is about a bipartisan effort today on the
floor to promote American innovation to protect and promote American
manufacturing and research and development jobs because Democrats and
Republicans, conservatives and liberals in both parties, in the House
and the Senate, favor repealing this tax. It is a bad tax policy that
is killing jobs. It is hurting our seniors, and it is harming
innovation.
Mr. Speaker, it is time to protect our American seniors, American
patients, and American innovation and repeal this destructive tax.
With that, I reserve the balance of my time, Mr. Speaker.
Mr. LEVIN. Mr. Speaker, I yield myself such time as I shall consume.
There are certain basic facts here. One is this industry participated
in the creation of healthcare reform. They, like other providers, were
involved; and like other providers, they said that they would
participate in helping to pay for it. That is a fact. Now they want
out.
Another fact is that they have benefited from it. According to a
recent analysis by Ernst & Young, the industry's revenue increased by
$8 billion in the year the tax took effect.
Also, there has been a reference to R&D. R&D, according to that
report, spending by the industry, also increased by 6 percent in the
same year.
There has also been reference to employment. The analysis of Ernst &
Young also says that, in that year, employment increased, and the
overall employment has increased by 23,500. There has been a 23,500
increase in employment.
So those are the facts.
There is another aspect. If people vote for this industry to
essentially go back on its commitment to participate, other providers
are going to ask for the same treatment. So in that respect, what the
Republicans are aiming to do is to unravel ACA.
Another fact is this is unpaid for. So when you add this unpaid-for
provision, you get, all together, well over $610 billion that the
Republicans have passed in permanent tax cuts without paying for one
dime.
Another factor is that this applies to imports as well as to those
that are produced in this country and not at all to exports. So look at
the equities. Look at how this industry has benefited. Look at the
irrationality and irresponsibility and coming forth to this body and
saying let's repeal and not pay for at all from a party that talks
about fiscal responsibility.
So let me just read from the Statement of Administration Policy. That
is another fact. If this were ever to pass the House and the Senate, it
would be vetoed. So here is the Statement of Administration Policy:
``The Affordable Care Act has improved the American health care
system, on which Americans can rely throughout life. After more than
five years under this law, 16.4 million Americans have gained health
coverage. Up to 129 million people who could have otherwise been denied
or faced discrimination now have access to coverage. And health care
prices have risen at the slowest rate in nearly 50 years. As we work to
make the system even better, we are open to ideas that improve the
accessibility, affordability, and quality of health care, and help
middle-class Americans.''
And it concludes:
``In sum, H.R. 160 would increase the deficit to finance a permanent
and costly tax break for industry without improving the health system
or helping middle-class Americans. If the President were presented with
H.R. 160, his senior advisors would recommend that he veto the bill.''
So I close with this. You know, people can be provincial in the sense
that they respond to one pressure point or another, and I understand
that. What you have to do is to look at an entire system, an entire
structure, and what it means for Americans throughout this country.
This industry, as I said, participated in helping to pay for
healthcare reform. They have benefited from it, and now, essentially,
they are coming forth and saying: Just take us out of it; separate us
out.
That is unfair, unwise, irresponsible, and sets a pattern that will
do what Republicans really want to do, and that is to pick apart and
tear apart this reform that has been 75 years in coming. So I urge
everybody to look at the broader interests of the people of this
country and to vote ``no.''
I reserve the balance of my time.
General Leave
Mr. PAULSEN. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days in which to revise and extend their remarks
and include extraneous material on H.R. 160, as amended.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Minnesota?
There was no objection.
Mr. PAULSEN. Mr. Speaker, I yield myself 15 seconds.
Mr. Speaker, just in response to the report that was just mentioned,
the Ernst & Young report, it is true that companies have been hiring
and growing in certain cases, but all of that growth from the report is
outside of the United States. So if you want to continue to promote
more jobs outside of the United States, don't vote for the repeal, and
we will continue to see jobs move overseas.
Mr. Speaker, I yield 1 minute to the gentleman from Pennsylvania (Mr.
Meehan), a member of the Ways and Means Committee.
Mr. MEEHAN. Mr. Speaker, let me begin by dispelling the premise that
somehow this whole thing was devised so that we can allow the medical
device companies to flourish. The thing we want to flourish is research
and development that is producing the kinds of things that are helping
the American people, and that is the essence of what the medical device
R&D innovation is doing, and this is stifling.
At the precise moment where breakthrough opportunities, oftentimes,
in small businesses--I see them, Mr. Speaker; I visit them in my
district--and at the time that it is the most fragile for them, they
are being hit with this 2.4 percent tax which touches them at the time
when it is not on profits. These are the very dollars that are being
used to be invested into R&D, whether they sell that product or not. We
are killing our innovation right in the cradle.
I strongly encourage my colleagues to support the repeal of the
medical device tax.
Mr. LEVIN. I yield 4 minutes to the gentleman from Washington (Mr.
McDermott), the ranking member on the Health Subcommittee.
(Mr. McDERMOTT asked and was given permission to revise and extend
his remarks.)
[[Page H4474]]
Mr. McDERMOTT. Mr. Speaker, Mr. Levin was correct. When we were
designing the Affordable Care Act, everyone was expected to share in
the cost as we work for the American people.
The medical device industry initially opposed 5 percent. They said:
How about 2.3 percent? We will go for that.
They agreed to it. Here they are today asking for us to give them
nothing, no taxes; they don't have to pay anything no matter how they
benefit from it.
Now, repealing this tax, which the nonpartisan analysts have shown
has no negative effect on jobs, will add $24.4 billion to the deficit.
It would eliminate an important source of revenue simply to appease an
industry that has benefited directly and greatly from the expansion of
the coverage of ACA.
On top of that, the bill is a distraction from a more important issue
that the Congress needs to address in the context of medical devices.
They would not let us vote on an amendment in the committee to bring up
the institution of unique device identifiers.
An essential tool of improving patient safety is the UDI. A UDI is a
number associated with a medical device right on the device. They
contain important information about where, when, and by whom the device
was made. They provide for post-market surveillance to identify
problems and notify patients when objects that they put in their bodies
are faulty or dangerous. This has dramatic impacts for safety.
In 2010, a massive recall of breast implants in France impacted tens
of thousands of women. Many cancer patients undergo reconstructive
surgery following mastectomy, and their lives are threatened when
faulty implants leak dangerous contaminants into their bodies. In
situations like this, it is essential that we know who has given the
faulty device so that recall efforts can save as many lives as
possible.
Unfortunately, even when the FDA finishes its new UDI regulations in
the coming years, we will lack important tools, including devices, in
the agency's postmarket safety checking system, the Sentinel
Initiative. The primary source of information for the Sentinel is
insurance claims forms, yet, unlike pharmaceuticals, CMS does not
currently require UDIs to be listed on Medicare claims. That makes it
all but impossible to apply the Sentinel Initiative to the device
context.
Furthermore, additional gaps exist in the FDA's rulemaking on UDIs.
For example, there is no requirement that UDIs be affixed directly to
the implantable devices.
As we look forward, I encourage my colleagues to look beyond efforts
to undermine the ACA and to look for opportunities to enhance safety
and improve the system for patients, not just the device industry.
I urge Members to vote ``no'' on this and come back with a bill--if
you want to take the tax off, that is one thing, but at least make them
identify the name and the place and the number of where it came from
so, if somebody you know gets impacted by one of these devices going
bad, we will have a way to trace it.
Mr. PAULSEN. Mr. Speaker, I yield 2 minutes to gentleman from Indiana
(Mr. Young), a leader on the Ways and Means Committee, who is also
concerned about the impact of this tax on his home State of Indiana.
Mr. YOUNG of Indiana. Mr. Speaker, ObamaCare's medical device tax has
already been devastating to innovation, patient care, and job creation,
especially in my home State of Indiana.
Up north, we have Warsaw, which is known around the world as the
orthopedics capital of the world. In central Indiana, we have a
burgeoning life sciences industry centered around the Indianapolis
area. Further south, we have Bloomington, which is home to Cook
Medical, the largest privately held medical device manufacturer in the
world.
Medical device startups dot Indiana's landscape from Lake Michigan
down to the Ohio River. Indiana's world-class medical device companies
like Biomet, Boston Scientific, Hill-Rom, Zimmer, and dozens more don't
just create and produce lifesaving technology. They also employ tens of
thousands of Hoosiers, and these jobs pay well.
At a time when factories have closed and jobs in rust belt States
have been sent overseas, medical device manufacturing jobs have been a
lifeline for hard-working Hoosiers and their families.
{time} 1645
Every day this tax remains in effect, we continue to slow
advancements in lifesaving and life-improving technologies, and we
hinder patient care. This day is long overdue. It is time to support
H.R. 160 and finally repeal this harmful, ill-advised tax.
Mr. LEVIN. It is now my pleasure to yield 4 minutes to the gentleman
from New Jersey (Mr. Pascrell), a member of our committee.
Mr. PASCRELL. Mr. Speaker, I am sorry the gentleman from Indiana is
leaving the floor right now because one of the companies he mentioned--
one of the companies, there are others--was brought before the Justice
Department because of their behavior not long ago. So my friend from
Indiana talks about Zimmer Holdings. That is one of the reasons why I
am asking you to review your support of this legislation. Because let
me tell you what happened to Zimmer and Stryker in the State of New
Jersey not that many years ago when the U.S. Attorney looked at these
two companies and many others.
Here is what they were brought to heel about: bribing doctors to
recommend their prosthetic to senior citizens under Medicare. Dante
said, what place in hell will they be? These guys should be in the
deepest place in hell--the deepest. You check the record. You can't
make this stuff up.
Mr. Speaker, I oppose this legislation. When the Affordable Care Act
was being negotiated, these companies were at the table. They agreed to
this. You can't deny that. Because of the ACA, the health care market
includes millions of newly insured Americans, more business for these
companies, by the way, driving up the demand for medical devices and
other health care services--increased demand, capitalism, you know
about that.
However, the device industry wants it both ways. They want new
businesses, and they want new business under the ACA, that the ACA has
created, and since the law was passed, they have been lobbying for
repeal of what they agreed to. I swear you can't make it up.
Mr. Speaker, I support the ACA and its goals. You don't. And it needs
to be funded. It is the law of the land, as the Speaker once said. You
can't support the goals of the ACA and then start stripping out the
pieces of the law that fund the realization of the goals.
Oh, but you can. And you have tried 56 different times to repeal this
legislation, and you failed every time, even though you are in the
majority.
This legislation would add $24.4 billion to the deficit--through the
Speaker to my good friend from Pennsylvania--and it is not paid for.
Despite industry claims of job loss and economic hardship, medical
device companies have seen a 7 percent growth in employment since the
ACA. Furthermore, I remain concerned about some of the behavior we have
seen in this industry.
The SPEAKER pro tempore. The Chair would like to remind the gentleman
to address his remarks to the Chair.
Mr. PASCRELL. Sure, Mr. Speaker.
Mr. Speaker, I became highly involved in the medical device issues
since 2007 when a number of device manufacturers entered into
controversial deferred prosecution agreements for providing doctors
with kickbacks for using their knee and hip replacement devices. A
number of these products ended up being recalled. That is the record.
As a result, on the justice side, I have worked to put an end to
deferred prosecution agreements that don't hold the bad actors
accountable. There are many good companies providing medical devices,
but the facts are the facts, and the history is the history, and the
culture of this industry needs to be known. I have also worked to
improve the safety of medical devices for patients by encouraging the
use of clinical data registries.
Repealing the device tax is not good policy, Mr. Speaker, and it is
not good for our budget--another $24.5 billion added to the deficit. I
think if you would ask our ranking member, Mr. Levin, he would give you
a precise
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number as to how much you have increased the deficit in legislation you
have provided over the last 6 months.
Mr. Speaker, I urge my colleagues to oppose this legislation.
Mr. PAULSEN. Mr. Speaker, I yield 2 minutes to the gentleman from
Pennsylvania (Mr. Dent).
Mr. DENT. Mr. Speaker, I just want to address something that was
stated by one of the previous speakers from Washington State who made a
comment to the effect that the medical device industry supported that
tax. Well, that is a statement that is simply not based in fact. In
fact, what happened, as I recall, Senator Baucus helped impose the tax
on the industry because he felt that they were not providing enough at
the table in terms of concessions for the ACA. In fact, since they
weren't doing enough at the table, the medical device industry was
placed on the menu. They fought this tax vigorously. There is no letter
to indicate they had any support for this tax.
Mr. Speaker, I rise in strong support of this legislation to repeal
the medical device tax. However you feel about the 2010 health care law
on the whole, we can all agree that the legislation has its flaws.
Again, one of the most glaring deficiencies in the law is the medical
device tax, designed to extract $26 billion from the industry over 10
years. This new law is already stifling critical innovation and
threatening high quality jobs in my district.
More importantly, it is increasing costs for consumers on products
which are an absolute necessity of life for those who rely on them,
such as prosthetics, pacemakers, and artificial hearts. Costs are also
being passed on to consumers at all levels through increased insurance
premiums and bills from medical providers.
The medical device industry currently supports over 75,000 jobs in
the Commonwealth of Pennsylvania. Several of the companies affected by
the new tax are located in my district, including OraSure Technologies,
Olympus, Boas Surgical, and B. Braun. In fact, B. Braun CFO Bruce
Heugel recently testified before the Senate Finance Subcommittee on
Health Care that his company has been forced to drastically reduce
investments in research and development and also has had job losses as
a result of the medical device tax. In fact, they are not building a
new headquarters because of this tax. These are good paying, 21st
century jobs, and this Congress should not support policies that will
kill them or send them overseas.
Mr. Speaker, the medical device tax is a punitive tax, and it is
creating disincentives for companies looking to stay competitive, hire
domestically, and create lifesaving new technologies. It is past time
that Congress repeal this onerous new tax, and I urge my colleagues to
support the Protect Medical Innovation Act. Let's get rid of this thing
once and for all. Let's excise the excise tax.
Mr. LEVIN. Mr. Speaker, I reserve the balance of my time.
Mr. PAULSEN. Mr. Speaker, I yield 1 minute to the gentleman from
Indiana (Mr. Rokita). Since he was first elected in 2010, he has been a
leader on this, organizing freshman Members, recognizing the importance
of repealing this disastrous tax.
Mr. ROKITA. Mr. Speaker, I thank the gentleman from Minnesota for
yielding the time. He has been the leader on this from day one, and I
am happy to join him. I also thank Chairman Ryan of the Ways and Means
Committee for allowing this to come to the floor the way it has. I
think it is very important. Most of America thinks this is very
important, and to have it stand alone here where it can be debated,
hopefully honestly, I think speaks well to the process, I think it
speaks well to the leadership of Chairman Ryan and Member Paulsen and
others who are behind this.
Mr. Speaker, I am privileged to be back on the floor to support this.
It is long overdue. It needs to happen. There is an old adage, Mr.
Speaker, and that is, if you want less of something, tax it. The same
is true here. If you want less jobs in this area, like the 56,000 jobs
in Indiana alone, tax the devices that those jobs produce. If you want
less innovation, tax these medical devices. If you want America to be
less of a leader in the world when it comes to this industry, tax it.
That is all their argument, Mr. Speaker, is saying, and our bill
corrects that. Let the free market work, and let innovation work. Let's
keep us a leader in the world in this area.
Mr. LEVIN. Mr. Speaker, I reserve the balance of my time.
Mr. PAULSEN. Mr. Speaker, I yield 1 minute to the gentlewoman from
Indiana (Mrs. Brooks) who has also been a leader as part of the Indiana
delegation on the issue.
Mrs. BROOKS of Indiana. Mr. Speaker, I would like to commend my
colleague from Minnesota for leading this effort since I came to
Congress in 2013.
I rise today joining my fellow Hoosiers seeking greater opportunity
for all Americans, and I rise today to call for a swift end to a tax
that is standing in the way of that opportunity.
Back home, I hear from countless Hoosiers about the restrictions the
medical device tax is placing on our life sciences industry, not only
in Indiana but across the country. This tax takes away the
opportunities to innovate, to hire more people, and most importantly to
improve the patient access to critical technology.
In Indiana the life sciences industry is vitally important. It has a
$59 billion impact on our economy and employs more than 56,000 people.
In fact, we are second--Indiana is second only to California in exports
of life sciences products.
Mr. Speaker, my colleagues on both sides of the aisle know that the
unfair medical device tax jeopardizes our competitive edge, it stunts
our workforce opportunities, but most importantly, it is decreasing
access to lifesaving technology for people.
Mr. Speaker, I want to stand for jobs, stand for improving people's
health, and stand for more opportunity. I urge my colleagues to repeal
the medical device tax.
Mr. LEVIN. Mr. Speaker, I reserve the balance of my time.
Mr. PAULSEN. Mr. Speaker, I yield 1 minute to the gentlewoman from
New York (Ms. Stefanik) who has also been doing an awesome job of
organizing a lot of the freshman Members and recognizing the importance
of this issue to the State of New York.
Ms. STEFANIK. Mr. Speaker, I strongly support H.R. 160, the Protect
Medical Innovation Act introduced by Mr. Paulsen, and in March I was
proud to lead a bipartisan letter by 43 freshman lawmakers to Speaker
Boehner calling for a vote to repeal the medical device tax.
According to a 2014 industry survey, the tax resulted in employment
reductions of 14,000 industry workers in 2013 and years prior to
implementation of this tax, with approximately an additional 4,500 jobs
lost in 2014. Furthermore, if we don't repeal this tax, the industry
will forgo hiring of nearly 20,500 employees over the next 5 years.
Mr. Speaker, this important bipartisan legislation will repeal the
Affordable Care Act's medical device tax that is limiting access to
health care devices that North Country families need and undermining
the medical device industry that is so important to our local economy.
Repealing the medical device tax will help our small businesses
create jobs for North Country families and protect employees who are
currently at risk from this job-killing tax. This an extremely
important issue for my district, especially in Warren County, home of
what is called ``catheter valley'' because of the numerous catheter
manufacturers.
I commend the House for bringing this important legislation to the
floor, and I urge all Members to support this measure.
Mr. LEVIN. Mr. Speaker, I reserve the balance of my time.
Mr. PAULSEN. Mr. Speaker, I yield 1 minute to the gentleman from
Indiana (Mr. Stutzman), someone I traveled with in the State of Indiana
who showed me firsthand the impact this device tax had in Indiana.
Mr. STUTZMAN. Mr. Speaker, I rise in support of H.R. 160, the Protect
Medical Innovation Act, and I appreciate the work that Congressman
Paulsen has done on this very important issue that has affected my
district dramatically.
As a sitting U.S. Congressman of Warsaw, Indiana, known as the
Orthopedic Capital of the World, the burdensome medical device tax hits
very close to home for my constituents. In fact, Mr. Speaker, the
Hoosier State as a
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whole is second in the Nation in exports of life science products, and
across the State over 20,000 Hoosiers are directly employed by this
industry. The impact on our communities and our neighbors is one of the
reasons I have fought so long and hard alongside Mr. Paulsen and my
colleagues to repeal this very destructive tax.
Mr. Speaker, back home in Indiana, Hoosiers know that taxation does
not create jobs; it kills them. In fact, a recent study has shown that
the medical device tax, implemented to fund ObamaCare, has cost more
than 33,000 jobs nationally so far. Mr. Speaker, repealing this medical
device tax is a simple, commonsense reform, and I urge my colleagues to
support this legislation.
Mr. LEVIN. Mr. Speaker, I continue to reserve the balance of my time.
{time} 1700
Mr. PAULSEN. Mr. Speaker, I yield 1 minute to the gentleman from
Pennsylvania (Mr. Costello), who knows the importance of this issue.
Mr. COSTELLO of Pennsylvania. Mr. Speaker, the cost of health care
continues to increase in this country.
As a philosophical matter, I do not believe inserting more government
between a patient and their doctor will reduce costs. In fact, to the
contrary. But there are things government can do.
That is why we in the House of Representatives are putting more money
into NIH funding. It is why 21st Century Cures has been introduced--to
streamline approval processes at the FDA and make sure that various
stakeholders involved in finding cures are all working together.
Yet what remains as a contradiction at the heart of ObamaCare is the
policy that taxes those who seek to innovate and improve public health
outcomes through pioneering medical device equipment. We are taxing
those who are trying to help improve, and who have improved, public
health outcomes. It just doesn't make sense.
Simply put, it is a disincentive to invest capital in precisely the
industry that has proven itself to be the single most important in the
history of civilization to improve public health--our life sciences
industry here in this country.
Mr. LEVIN. Mr. Speaker, I reserve the balance of my time.
Mr. PAULSEN. Mr. Speaker, I yield 1 minute to the gentleman from West
Virginia (Mr. Mooney) to speak on this issue.
Mr. MOONEY of West Virginia. Mr. Speaker, I am a proud cosponsor of
H.R. 160, the Protect Medical Innovation Act of 2015, also known as the
medical device tax repeal.
This bill would repeal the tax on medical device manufacturers that
was put into place under ObamaCare. The medical device tax rate is 2.3
percent, and this is in addition to the State sales tax on common
medical devices such as pacemakers, hearing aids, and insulin pumps.
This tax hurts the very same Americans we should be helping. For
example, 13 percent of West Virginians--the State I am blessed to
represent--have diabetes. This 2.3 percent tax makes it more difficult
for struggling taxpayers in West Virginia and around the country to
access critical healthcare devices like insulin pumps.
If gone unchecked, this tax will continue to weaken the industry's
ability to grow and help people in need. It will also continue to
hinder the development of lifesaving treatments and devices.
I hope my colleagues will join me tomorrow in voting for the repeal
of the ill-advised medical device tax.
Mr. LEVIN. Mr. Speaker, I continue to reserve the balance of my time.
Mr. PAULSEN. Mr. Speaker, I yield 1 minute to the gentleman from
Michigan (Mr. Benishek), a physician who works with patients each and
every day and understands the importance of repealing this tax.
Mr. BENISHEK. Mr. Speaker, I rise today to urge my colleagues to
support H.R. 160, the Protect Medical Innovation Act.
H.R. 160 will permanently repeal the misguided excise tax on medical
devices that was imposed by the President's healthcare law.
I am a cosponsor of this important legislation, along with over 280
Members of this House of Representatives. In the 113th Congress, the
Senate endorsed getting rid of this burdensome tax by an overwhelming
margin. It is clearly time for this tax to go.
The medical device tax discourages innovation, lowers the quality of
medical care available to the American people, and cuts jobs while
driving production overseas.
Companies like RTI Surgical, based in my district, are being harmed
by this burdensome tax. Instead of hamstringing these manufacturers, we
should be allowing them to produce new medical devices and create jobs.
I am a doctor who treated patients in northern Michigan for 30 years.
I know how important medical devices are for providing quality health
care, and I believe that getting rid of this tax will improve our
Nation's healthcare system.
I hope all my colleagues will join me in supporting this commonsense
and long overdue fix for the train wreck that is the President's
healthcare law.
Mr. LEVIN. Mr. Speaker, I continue to reserve the balance of my time.
Mr. PAULSEN. Mr. Speaker, I yield 2 minutes to the gentleman from
California (Mr. Rohrabacher), a State that has been a leader in
developing new medical technologies.
Mr. ROHRABACHER. Mr. Speaker, I rise in support of this effort to
prevent this very destructive tax from having the harmful impact that
we know it will have. This medical device tax is perhaps the most
odious of any tax that has ever been loaded upon the shoulders of the
American people in the history of our Republic.
Our first Chief Justice of the Supreme Court, John Marshall, once
pointed out: ``The power to tax is the power to destroy.'' Well, who is
being destroyed and who is being hurt by this medical device tax? It is
the American people who are suffering maladies and health challenges,
and we are putting them as the people who are going to be basically
paying the bill or doing without their medical devices.
I would like to give a personal example of this. I know it is very
painful for me to do so, but I think I need to share this with my
colleagues.
Two and a half years ago, I was notified that my daughter, who was at
that time 9 years old, had leukemia. It was a horror story for my
family, a horror story, just like it is for families across America. We
came out of that. We went through it. It was a tough, tough road for a
year. Last week, she had her last cancer treatment and, last week, she
was declared cancer free.
The SPEAKER pro tempore (Mr. Fitzpatrick). The time of the gentleman
has expired.
Mr. PAULSEN. I yield an additional 1 minute to the gentleman from
California.
Mr. ROHRABACHER. Ninety percent of the kids who get leukemia today
are cured from leukemia after a period of time. They actually will live
through this. Only 40 years ago, 90 percent of the kids who got
leukemia died.
We have had different advances in medicine that have actually
achieved this goal. But in my daughter's case, I could see very easily
a medical device was put under her skin, a portal, so that she did not
have to take the chemotherapy into her arms, which resulted in younger
kids decades ago with their veins collapsing because of the
chemotherapy being shot into their arm.
The people who devised that medical device saved my daughter's life,
and now we want to make them the most heavily taxed people in our
country. That is ridiculous. We want to encourage people to build these
types of devices that will save our children and help those people who
are suffering.
This medical device tax is odious, it is wrong, and it was
wrongheaded from the very beginning. In the name of saving future
children from things that we might be able to cure with a proper
medical device, we need to make sure we eliminate this tax and keep
faith with future generations, as well as those people who are
suffering today.
I ask my colleagues to join me in getting rid of this tax on medical
devices.
Mr. LEVIN. Mr. Speaker, I continue to reserve the balance of my time.
Mr. PAULSEN. Mr. Speaker, may I inquire the amount of time remaining?
The SPEAKER pro tempore. The gentleman from Minnesota has 11 minutes
remaining. The gentleman from Michigan has 16\1/2\ minutes remaining.
Mr. PAULSEN. Mr. Speaker, I yield 1 minute to the gentleman from
Pennsylvania (Mr. Thompson).
[[Page H4477]]
Mr. THOMPSON of Pennsylvania. Mr. Speaker, I thank my colleague from
Minnesota.
I rise today as a 30-year health care professional and a proud
cosponsor of H.R. 160, the Protect Medical Innovation Act of 2015.
This bill would repeal the Affordable Care Act's 2.3 percent tax on
medical devices. These are medical devices that save and improve lives
for millions of Americans. These devices include pacemakers, artificial
joints, CAT scan machines, and many, many more.
Mr. Speaker, the medical device tax is a terrible policy that is
stifling innovation and United States competitiveness and is hurting
small businesses all across the Nation, and certainly in the
Pennsylvania Fifth Congressional District.
This legislation, which has strong bipartisan support, will help to
protect American jobs, keep America at the cutting edge of
technological medical advances, and preserve a patient's access to
affordable, lifesaving devices.
Having served in a nonprofit healthcare setting for three decades, I
rise today and ask my colleagues to join me in voting to repeal this
unnecessary and very harmful tax.
Mr. LEVIN. Mr. Speaker, I yield myself the balance of my time.
There is no one that questions the importance of this industry--no
one. This country has been in the forefront in terms of creating
medical devices. There has been innovation and there has been
enterprise, and it has impacted the lives of millions of people. That
is not the issue here.
The issue is this. A number of industries and a number of providers
participated in creating the Health Care Reform Act. Essentially, I am
not sure it is the industry as much as some Members are essentially
coming here and saying: Give this industry a free ride in terms of
their participation, while others are doing their part.
That isn't fair; it isn't workable; and it is also fiscally
irresponsible. I would like to talk to the CEOs of any of these
companies and ask them if they think it is fiscally responsible to
repeal this provision costing well over $20 billion, unpaid for, made
permanent.
Indeed, this is industry joined with others in the healthcare world
in this country in a letter of May 11, 2009, to the President:
Dear Mr. President,
We believe that all Americans should have access to
affordable, high-quality healthcare services. Thus, we
applaud your strong commitment to reforming our Nation's
healthcare system. The times demand and the Nation expects
that we, as healthcare leaders, work with you to reform the
healthcare system.
And it concludes with this paragraph:
We, as stakeholder representatives, are committed to doing
our part to make reform a reality in order to make the system
more affordable and effective for patients and purchasers. We
stand ready to work with you to accomplish this goal.
And it was signed by a number of representatives--the AMA; America's
Health Insurance Plans, their leadership; the Pharmaceutical Research
and Manufacturers; et cetera, and also signed by the president and CEO
of the Advanced Medical Technology Association.
So now people are coming here and saying what was essentially
committed to in 2009 should essentially be ripped out of ACA in 2015.
I just want to read from a report by the National Center for Health
Research. And I refer, for example, to the chart on the number of
employees at the 12 largest U.S.-based device companies. All of them
show an increase in employment of the 12 largest, except two, and in
one case, the reduction was from 10,800 to 10,500. One company did have
a larger loss, but it wasn't anything close to catastrophic.
Then the number of employees at the small, publicly traded device
companies--one, two, three, four, five, six, seven, eight, nine--of
those, only seven show a reduction in the number of employees from 2012
to 2014. In one of them, there was a reduction of one, and the other, a
reduction of four employees. And then there is another with a reduction
of four, and another, a reduction of six. The others had increases in
their employment, and two of them, one went from 230 to 320, and
another from 244 to 303. These are the smallest.
{time} 1715
Let me also refer in this document to stock prices for the 12 largest
U.S.-based device companies.
When you look down at the profit margin, all of their profits went up
except one, which had a reduction of 1.6 percent from the close of
January 2, 2013, to the close of January 2, 2015. That reduction was
tiny. The others had a very substantial reduction, some in the
twenties, one in the thirties, and the average was a 13.8 percent
increase in the profit margin.
Also, this report reads:
Similarly, the report on 2013 employment, released by a
financial analysis news service, EP Vantage, showed that 11
of the top 15 device makers expanded their workforce after
the device tax went into effect.
I think what is happening here is that a few of my colleagues are
coming here and are using a few examples--and I don't deny, in a
capitalist system, there are some losers as well as winners.
Everybody isn't necessarily a winner, and there was a recession in
this country during some of these years, but to come here and to use
those examples that really are refuted by the overall data, I think, is
essentially saying that we ought to begin, on this point, to rip apart
the ACA because, in every case, there hasn't been an improvement for
every company. In terms of research and development, the Ernst & Young
report makes it very clear that spending by the industry increased by 6
percent in the same year.
I am just asking everybody who cares about healthcare reform and who
cares about the overall picture here in the United States to resist the
temptation to take several examples, perhaps, from their own districts,
to draw conclusions about what really has happened in the medical
device industry and to, essentially, come forth because of those
relatively few examples and say that we should now, essentially, repeal
this provision, costing well over $20 billion--unpaid for--permanently.
That is not only contrary to the letter I read, but it is contrary to
fairness within the healthcare industry, and it is really unfair to the
millions of people who have benefited from the ACA when the motive,
really, of so many of the Republicans who come here is not to simply
repeal this tax, but it is part of an effort to, essentially, repeal
the ACA altogether. We should resist that.
The people of this country do not want that repeal, so let's vote
``no''--and a resounding ``no''--on this proposal.
May 11, 2009.
The President,
The White House,
Washington, DC.
Dear Mr. President: We believe that all Americans should
have access to affordable, high quality health care services.
Thus, we applaud your strong commitment to reforming our
nation's health care system. The times demand and the nation
expects that we, as health care leaders, work with you to
reform the health care system.
The annual growth in national health expenditures--
including public and private spending--is projected by
government actuaries to average 6.2% through the next decade.
At that rate, the percent of gross domestic product spent on
health care would increase from 17.6% this year to 20.3% in
2018--higher than any other country in the world.
We are determined to work together to provide quality,
affordable coverage and access for every American. It is
critical, however, that health reform also enhance quality,
improve the overall health of the population, and reduce cost
growth. We believe that the proper approach to achieve and
sustain reduced cost growth is one that will: improve the
population's health; continuously improve quality; encourage
the advancement of medical treatments, approaches, and
science; streamline administration; and encourage efficient
care delivery based on evidence and best practice.
To achieve all of these goals, we have joined together in
an unprecedented effort, as private sector stakeholders--
physicians, hospitals, other health care workers, payors,
suppliers, manufacturers, and organized labor--to offer
concrete initiatives that will transform the health care
system. As restructuring takes hold and the population's
health improves over the coming decade, we will do our part
to achieve your Administration's goal of decreasing by 1.5
percentage points the annual health care spending growth
rate--saving $2 trillion or more. This represents more than a
20% reduction in the projected rate of growth. We believe
this approach can be highly successful and can help the
nation to achieve the reform goals we all share.
To respond to this challenge, we are developing consensus
proposals to reduce the rate of increase in future health and
insurance costs through changes made in all sectors of the
health care system. We are committed to taking action in
public-private partnership
[[Page H4478]]
to create a more stable and sustainable health care system
that will achieve billions in savings through:
Implementing proposals in all sectors of the health care
system, focusing on administrative simplification,
standardization, and transparency that supports effective
markets;
Reducing over-use and under-use of health care by aligning
quality and efficiency incentives among providers across the
continuum of care so that physicians, hospitals, and other
health care providers are encouraged and enabled to work
together towards the highest standards of quality and
efficiency;
Encouraging coordinated care, both in the public and
private sectors, and adherence to evidence-based best
practices and therapies that reduce hospitalization, manage
chronic disease more efficiently and effectively, and
implement proven clinical prevention strategies; and,
Reducing the cost of doing business by addressing cost
drivers in each sector and through common sense improvements
in care delivery models, health information technology,
workforce deployment and development, and regulatory reforms.
These and other reforms will make our health care system
stronger and more sustainable. However, there are many
important factors driving health care costs that are beyond
the control of the delivery system alone. Billions in savings
can be achieved through a large-scale national effort of
health promotion and disease prevention to reduce the
prevalence of chronic disease and poor health status, which
leads to unnecessary sickness and higher health costs. Reform
should include a specific focus on obesity prevention
commensurate with the scale of the problem. These initiatives
are crucial to transform health care in America and to
achieve our goal of reducing the rate of growth in health
costs.
We, as stakeholder representatives, are committed to doing
our part to make reform a reality in order to make the system
more affordable and effective for patients and purchasers. We
stand ready to work with you to accomplish this goal.
Sincerely,
Stephen J. Ubl,
President and CEO, Advanced Medical Technology Association.
Karen Ignagni,
President and CEO, America's Health Insurance Plans.
Rich Umbdenstock,
President and CEO, American Hospital Association.
J. James Rohack, MD,
President-elect American Medical Association.
Billy Tauzin,
President and CEO, Pharmaceutical Research and
Manufacturers of America.
Dennis Rivera,
Chair, SEIU Healthcare, Service Employees International
Union.
Mr. LEVIN. I yield back the balance of my time.
Mr. PAULSEN. Mr. Speaker, I yield myself the balance of my time.
I have a couple of points right off the bat. My friend from Michigan
claims that the tax hasn't necessarily impacted jobs, that there are
only certain stories. I would just point out that, in his home State,
there is a company named Stryker--now, it is a larger company--that
laid off 1,000 employees back in November of 2011 to provide
efficiencies and realign resources in advance of the new medical device
excise tax.
As to a lot of data that was mentioned earlier, those figures that
are talking about how well the industry is doing and as to the growth
and the sales numbers are global data. These are companies that have
global awareness and a global presence. Those are not U.S. jobs. We
want those jobs in the United States. If we can repeal this tax, we can
make sure that job growth is here in the U.S. instead of outside of the
United States.
Mr. Speaker, this is not smart tax policy. It is hurting our
innovators, and it is costing us jobs. This industry is an American
success story. We all know the names of the larger companies because
some of those were mentioned here in debate on the floor today, but
there are thousands of these companies--the vast majority--because,
again, 98 percent have fewer than 500 employees, and over 80 percent
have fewer than 50 employees.
These are companies you have never heard of, but there is a doctor or
an engineer or an entrepreneur who has started or who has come up with
an idea to create a company in the backyard or in the garage to help
improve lives or to save lives. That is what we are trying to protect
here, Mr. Speaker.
These are not technicians in some white lab coats who are trying to
improve widgets or to build a widget faster. These are, literally,
small businesses that are on missions to save lives. If you think about
it, what could be more entrepreneurially worthwhile than that?
We in Congress have a responsibility to give America's innovators the
best shot, the best opportunity possible, by removing any obstructions
to those inventions that are going to bring us all a better quality of
life. We have the ability to help create a new age of American
innovation, and we can help kick-start that process this week--today,
tomorrow, with a vote--by repealing the destructive medical device tax.
It was mentioned as a part of the debate also that the industry came
forward and that there was vast support for the Affordable Care Act,
and they agreed to the tax. Mr. Speaker, there are no letters from the
industry whatsoever that support their buy-in for a 2.3 percent excise
tax--a tax on revenue, not on profit.
It is true that there were letters that were put out that said they
were committed to healthcare reform and that they wanted to see that
process move forward, but then they were very vocal when this excise
tax idea was floated as a part of the new healthcare law and even after
the law passed. It has been continuous, this awareness about their
opposition in their knowing of the detrimental effects that it would
have.
Mr. Speaker, this is also not about the Affordable Care Act because
we have had many votes on that--to repeal it, to change it, to move in
a different direction. This is about a tax that is going into the
general fund, that is not going into some special account to fund
ObamaCare. That is not what this tax is doing. This is going into the
general fund.
That Affordable Care Act discussion will come up at another time with
the Court case coming up in the near future. This is more of an
opportunity to stand up with a bipartisan voice to declare our support
for American manufacturing, for American jobs, and for protecting our
patients, including our seniors.
I just want to remind my friends that the President has said that he
has been open to any ideas that will improve accessibility, that will
improve affordability, and the quality of health care. That is exactly
what this bill does. It is about protecting access to those devices.
It is also important to point out the 281 cosponsors. The bipartisan
support is deep, and it is broad. If you think back to the sustainable
growth rate debate we had just a little over a month ago, that is
important to bring up. Why? It is because there was broad, bipartisan
support and a belief that the policy was harming patient care and
innovation.
This is good policy now if we can repeal this tax. It is about doing
the right thing for our constituents, which outweighs the concerns of
the offsets.
Mr. Speaker, I urge support for this legislation, and I yield back
the balance of my time.
The SPEAKER pro tempore. All time for debate has expired.
Pursuant to House Resolution 319, the previous question is ordered on
the bill, as amended.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.
The SPEAKER pro tempore. The question is on the passage of the bill.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. LEVIN. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this question will be postponed.
____________________