Protecting Medical Innovation Strengthens Economy, Improves Lives | Commentary
It’s a new year, with a new Congress in session and new opportunities for our elected leaders to work together on these priorities. And, fortunately, there’s one critical issue that can address all three of these priorities at once: the repeal of the Medical Device Excise Tax.
Both the House and the Senate are on the right track with the introduction of “The Protect Medical Innovation Act” (HR 160) by Reps. Erik Paulsen, R-Minn., and Ron Kind, D-Wis., and of its companion bill in the Senate (S 149) by Finance Chairman Orrin G. Hatch, R-Utah. It’s not surprising that each is gaining support on both sides of the aisle.
Despite the bipartisan support, it is frustrating to see hurdles put in the path of something so clearly matching the priorities set by the electorate.
Instead of clearing those hurdles and making way for American businesses to do what they do best — innovate and create jobs — both sides of the issue are spending needless time attacking specific revenue projections and job-loss predictions.
That guessing game loses sight of a simple fact that every businessperson understands: When a significant portion of companies’ revenue is diverted — as it is with the Medical Device Excise Tax — it’s less money for jobs, investment and research and development. These are the very things we need to be doing now and at even greater levels in the future if we are going to achieve our goals of having more jobs, a stronger economy, a sustainable health care system and healthier people.
In Arizona, the medical technology industry accounts for more than 17,000 jobs and contributes more than $2.9 billion to the economy. Medical innovation resulting from the med-tech industry is the key to making a difference in the lives of our people and in reducing the cost to keep them healthy. Let’s look at just one example.
Diabetes is a group of diseases characterized by high blood-glucose, or blood sugar, caused when the body either does not produce enough insulin or is unable to use insulin in an effective way. When not controlled, the high level of glucose can lead to serious health complications, including death.
Importantly, medical technology has revolutionized the ways in which people are screened for and live with diabetes. These advanced diabetes technologies don’t just improve quality of life; they also help to cut overall health care costs. Many of the costly complications associated with diabetes — high blood pressure, kidney failure or dialysis, heart attacks and hospitalization requirements, to name a few — can be prevented or delayed with regular diagnostic testing and better management of glucose control.
New medical device innovations, such as a fully functioning artificial pancreas — a technology that links an insulin pump with a continuous glucose monitor to provide automatic, real-time monitoring of glucose levels and delivery of insulin — can make a huge impact. The potential savings to Medicare thanks to artificial pancreas technology is estimated at $1.9 billion over 25 years, according to a study carried out on behalf of the Juvenile Diabetes Research Foundation.
The journeys from discovery to development to delivery of life-changing innovations like this one are not for the faint of heart. Innovation is a high-risk endeavor. The companies that make up the medical-device industry take chances in their research and development, and these companies assume lots of risk for a tremendous upside — the next life-changing technology. Adding more hurdles to that, in the form of a Medical Device Excise Tax, hampers their ability to take these risks. As a result, it hurts our companies now, and hurts American patients in the long run.
Protecting medical innovation is a strategic imperative we can all embrace. Medical innovation improves the lives of patients while strengthening our economy through the creation of jobs and supporting our ability to continue to bend the health care cost curve. Now is not the time to put up more hurdles to industry and innovation: it’s the time for Congress work together on healthy priorities.
Joan Koerber-Walker is chairwoman of AdvaMed State Medical Technology Alliance and president and CEO of the Arizona Bioindustry Association.