The first-year impact of 2012’s medical device excise tax has led to a significant cut in jobs, R&D, and U.S. investment, according to findings in a newly released survey from Advanced Medical Technology Association (AdvaMed). AdvaMed is a trade association representing 80 percent of medical technology firms in the United States. The survey, conducted at the end of 2013, reports that the new tax has led to 14,000 job reductions for industry workers, while companies have foregone hiring 19,000 workers—affecting a total of approximately 33,000 people. The relationship between direct industry employment and indirect employment among suppliers yielded a 4-to-1 ratio, suggesting that the impact on indirect employment could be as high as 132,000 jobs--for a total job loss of up to 165,000.

Almost one-third (30.6%) of respondents also said they had reduced R&D due to the tax, with nearly 10% moving or expanding their manufacturing abroad. Three-quarters of respondents have either: delayed or eliminated capital investments and/or plans to open new facilities; cut back on investment in start-up companies; deemed it difficult to raise capital amount start-ups; or delayed or eliminated increases in employee earnings.

The 2.3% tax on medical devices does not apply to retail sales for individuals, but to manufacturers and importers.