Providing for Consideration of H.R. 160, Protect Medical Innovation Act of 2015, and Providing for Consideration of H.R. 1190, Protecting Seniors' Access to Medicare Act of 2015

Floor Speech

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I thank my colleague on the Rules Committee, who handles our rules and legislation so effectively on the floor.

Mr. Speaker, I rise today in support of the rule and the underlying bills. When the Democrat-controlled Congress rammed the so-called Affordable Care Act through this Chamber, I joined my Republican colleagues in expressing our grave concerns over the effects of the law's tax increases. Specifically, we warned that the excise tax on medical devices would hinder innovation as well as restrict growth and job creation in an industry that has improved the quality of life for millions around the world.

And just as we cautioned, this tax on devices that restore mobility, keep hearts in rhythm, and help doctors diagnose life-threatening diseases earlier than ever before has cost us local jobs and reduced research capabilities.

Cook Medical is a privately owned company, with facilities around the world. It employs about 500 people in Winston-Salem, North Carolina, where the company focuses on endoscopic and urological medicine.

Since the medical device tax was levied in 2013, Cook Medical has paid roughly $13 million annually. As a result, the company has pulled back on capital improvements as well as research and development investments. They have also considered moving manufacturing capacity outside the United States.

Scott Sewell, vice president of technology acquisition and development for the company's Winston-Salem office, recently told the Triad Business Journal that if the medical tax device is repealed, they would look at expanding operations in North Carolina with a new plant in Winston-Salem.

I would like to submit for the Record this May 1 article from the Triad Business Journal.

[From Triad Business Journal, May 1, 2015]
Device Tax Thwarts Expansion in Winston-Salem

(By Owen Covington)
The push to repeal an Affordable Care Act tax on the sale of medical devices appears to be gaining steam with a prominent device manufacturer with a strong Triad presence recently lobbying Congress for action.

In written testimony to a Senate committee this month, Cook Medical Board Chairman Stephen Ferguson said the company has had to pull back on capital improvements and R&D investments because of the tax. Cook is also considering moving manufacturing capacity outside the country.

``Make no mistake about it: We want to develop and manufacture our devices in the U.S., but this tax is preventing this growth in this country,'' Ferguson wrote.

I caught up with Scott Sewell, vice president of technology acquisition and development at Cook Medical's Winston-Salem operation, where the focus is on endoscopy and urological medicine.

Just for further explanation, the tax is a 2.3 percent levy on the sale of many medical devices that's expected to generate $29 billion during its first 10 years.

Proponents have argued that increased health insurance coverage will mean more sales for these companies, which also have the option of passing that increase along to consumers rather than absorbing it themselves.

Sewell said that since the tax was levied in 2013, Cook Medical has paid roughly $13 million annually. That accounts for only a portion of Cook's overall sales, since it isn't paid on the roughly 60 percent of Cook's products that are sold abroad.

Both Sewell and Ferguson said that uptick in sales hasn't occurred, and the company has generally been unable to pass along the cost of the tax to consumers, which are typically very cost-conscious hospitals. That's meant pulling back on plans to expand in Winston-Salem and elsewhere, Sewell said.

``I think if the device tax were repealed, in the next couple of years, we would probably be looking at a new plant in Winston-Salem,'' he said.

Cook's arguments are grabbing the attention of more in Congress. That said, advocates of the tax say claims like those of Cook are overblown.

``A manufacturer can't avoid the tax by shifting production abroad, doesn't pay the tax for devices it produces here but sells abroad, and suffers no competitive disadvantage from foreign producers, who also have to pay the tax for devices that they sell here,'' wrote Chad Stone, chief economist of the left-leaning Center on Budget and Policy Priorities, in U.S. News & World Report.

Ms. FOXX. It is clear that ObamaCare's medical device tax has directly and negatively impacted the people who live in North Carolina's Fifth District, as well as people around the country and around the world.

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