Minnesota lines up against medical-device surtax

How often do Tim Pawlenty, Al Franken, and Amy Klobuchar agree on an issue?  Until the Senate began debating a tax on medical manufacturers that would impose $40 billion of new costs on an industry that creates live-saving and health-improving devices, the answer would be never.  Since Minnesota houses a number of manufacturers in the medical-device market, both the Republican Governor and the two Senators have agreed that penalizing innovation in health care to pay for ObamaCare will mean disaster — for the state and for patients everywhere:

Medical-device makers, joining an 11th-hour scramble to influence the shape of health-care legislation in the Senate Finance Committee, have petitioned panel chairman Max Baucus to shave billions of dollars in fees that the industry would face under the measure.

The Advanced Medical Technology Association, or AdvaMed, the trade group for the larger device manufacturers, wants the Montana Democrat to reduce $40 billion in fees over the next decade to $15 billion, according to people close to the negotiations. But industry was told that offer is too low. As of Sunday, the final draft included the higher number. …

A number of lawmakers have voiced support for the device makers. Sens. Amy Klobuchar and Al Franken, both Minnesota Democrats, have publicly objected to the proposed fees, which they describe as a tax, as have Indiana’s two senators, Republican Richard Lugar and Democrat Evan Bayh. Medtronic Inc., a major cardiovascular-device maker, is based in Minneapolis, and defibrillator maker Guidant Corp. is based in Indianapolis.

Pawlenty joined four other governors in opposing the tax two weeks ago:

Five Republican governors have sent a letter to Senate Finance Committee Chairman Max Baucus to voice their opposition to his proposed $40 billion tax on medical device makers arguing that it would kill jobs and stiffle medical innovation.

“We all support health care reform, but special taxes on the companies that bring high-quality, innovative solutions to health care professionals runs counter to the goals of better health care for America,” reads the letter, which is signed by, Governors Tim Pawlenty of Minnesota, Mitch Daniels of Indiana, Jim Gibbons of Nevada, Arnold Schwarzenegger of California, and Gary Herbert of Utah.

If anyone doubted that ObamaCare would strike at the heart of innovation and dynamism in American health care, this tax proves it.  The same can be said for the $80 billion levy on the pharmaceuticals, but most people ignored it because of the campaign of demonization Democrats have conducted over the years.  That money will gut research and development and force higher prices onto consumers, which means we will be less able to afford existing products and see fewer advances in technology.

We have marveled at rapid advances in prosthetic technology over the last two decades.  Instead of providing just form for people who have lost limbs, new prosthetics allow people to have function restored as well.  Heart-valve implants have advanced tremendously, extending lives far beyond what we expected twenty years ago.  Joint replacements allow people who would normally be invalids to return to normal lives.

Why should Congress penalize an industry that has created miracles over the last few decades?  For that matter, why should Congress penalize any of the industries that contribute to the most innovative and successful system in the world?  Minnesotans agree at least on the former question.  If we want to have continued innovation and improvements in medical devices, the industry has to have the capital to invest in research and experimentation that creates these success stories — and they  will put it to much better use than the ObamaCare bureaucracy.  This is an absurd idea that only pencil-pushers in the Beltway could love.

Allahpundit Dec 03, 2021 3:21 PM ET