Study: Medical tech industry expected to grow, but one wrong turn could cost billions
The study, “The Economic Impact of the U.S. Advanced Medical Technology Industry,” prepared for AdvaMed by Battelle Technology Partnership Practice, reports that the advanced medical technology industry is responsible for generating over $113 billion in personal income for workers and $381 in billion in national economic output.
According to the study, the advanced medical technology industry “is among the signature industries for the U.S. and stands among a select group of ideal industries,” because it is research and development driven, produces products that are in demand around the world and creates high-wage jobs; responsible for generating almost 1.9 million U.S. jobs.
The study remarked that as a result of the increasing national demand for new devices to assist prevention, diagnosis and treatment of medical conditions coupled with an increase in global demand, the medical technology industry’s growth is anticipated to continue.
“As detailed, every $1 billion in advanced medical technology industry revenues in the U.S. generates an additional $1.69 billion in national economic output, nearly 13,000 jobs and $778 million in personal income,” the study remarked. “Likewise, however, any policies or changes that negatively impact the operating environment or otherwise reduce industry revenues will have the inverse effect—driving significant employment reductions, income reductions and declining business output.”
Battelle, a nonprofit research organization, modeled a hypothetical economic scenario whereby a change in the operating environment in the U.S. might result in the advanced medical technology industry declining by $3 billion, resulting in the loss of 36,840 jobs and $8 billion in output in the economy. Examples of such events cited by the authors include increasing foreign competition; changes in healthcare reimbursement policies; or changes in the business climate from such sources as pricing, demand or taxes.
These data are particularly timely and critical for policymakers with the $20 billion medical device tax set to go into effect in 2013, which could trigger such negative impacts, according to the Philadelphia-based AdvaMed. Imposition of the new medical device tax is projected to cost the industry approximately $3 billion a year over the next seven years, the association stated.
Repealing the device tax is part of AdvaMed’s “Competitiveness Agenda,” a list of policy initiatives for American medical progress to thrive: from promoting early-stage research and development and more efficient and predictable FDA regulation, to adequate reimbursement and fair access to foreign markets.
“The economic impact of the industry is felt broadly across the nation and there are significant opportunities for future growth,” the study concluded. “Realizing these growth opportunities, however, will require attention to be paid to sustaining a competitive operating environment for the industry within the United States.”