Abiomed chairman, president, and CEO Michael R. Minogue today warned the House Committee on Small Business of the hardship the medical device tax will present for the industry. He emphasized that small device companies will likely suffer the most if the 2.3% excise tax goes into effect as slated next year.
“The tax will be especially damaging to innovative start-up companies, since start-ups tend to suffer losses in their early years when they are pouring money into research and development, and trying to move a product to market,” Michael R. Minogue, who is also an AdvaMed board member, told the committee, according to a press release. “Since the majority of the industry includes smaller companies that are not yet profitable, this tax increases the time these struggling companies will be operating at a loss. For some, it could truly be the difference between surviving and having to close their doors.”
Minogue, who was on Capitol Hill to testify on behalf of AdvaMed as part of a hearing on how small businesses are doing well despite the tough economic climate, told the committee that many of the most innovative medical devices and diagnostics come from small companies, and often those backed by venture capital.
He pointed out that close to two-thirds of the medtech companies in the United States have fewer than 20 employees and emphasized that those firms often face an uphill battle.
"Even with truly innovative products and serious commitment, many emerging growth medical device companies simply do not succeed—especially in the current down economy when investment dollars are scarce and regulatory challenges are growing,” he said.
Abiomed makes cardio assist devices.