Competitiveness Agenda for a Vibrant MedTech Cluster
Today, America is recognized as the world leader in the production of life-saving and life-enhancing medical technology. Yet the industry’s leadership is threatened by unprecedented chal- lenges, including a nearly $30 billion federal excise tax set to go into effect in 2013, which is forcing some companies to produce and introduce new technolo- gies outside of the US. Te industry employs people in nearly every state, but the majority of its jobs are concentrated in 20 states. Tose states, which account for nearly 85% of all medical technology jobs in the United States, have a unique responsibility, and a narrow window in which to act, to preserve jobs or risk losing them. Te US medical technology industry
is a dynamic part of the US economy and a source of economic growth and good jobs. Te future presents sig- nificant opportunities for growth. Te industry employs more than 420,000 people in the US. Between 2005 and 2007, medical technology employment grew 20.4% adding 73,000 jobs. Te average medical technology worker enjoys wages almost 40% higher than average and even 22% higher than the average for manufacturing jobs. It generates an additional four jobs in suppliers, component manufacturers, and other companies servicing the industry—for a total more than two- million jobs nationwide. Te medical technology industry
is also a strong source of exports and is almost alone among manufacturing industries in consistently maintaining a favorable balance of trade. Worldwide demand for medical technology will
expand dramatically as populations age in countries around the world. In the US alone, the elderly population will increase 32 million over the next two decades—a jump of 80%. Worldwide, by 2025, the elderly population will grow by 3.5 times as fast as the population as a whole. Also, rapidly growing middle class populations in countries like Brazil, India, and China will fuel demand for advanced medical technologies. China’s middle class alone is expected to exceed the entire US population by 2015.
The medical technology industry offers a special opportunity for states to bolster their economic development.
Te medical technology industry of-
fers a special opportunity for states seek- ing to bolster their economic develop- ment and grow stable high-paying jobs. Growth of the industry tends to revolve around clusters of excellence, in which small start-up companies generate the technologies of the future, larger com- panies interact with the start-ups and transform new products into large-scale sales and employment, and medical centers and universities produce ideas and trained personnel. AdvaMed, in conjunction with the
State Medical Technology Alliance (SMTA)—a network of state-based industry associations—has released a comprehensive state-based policy agenda aimed at preserving America’s global leadership in medical innovation. Te agenda proposes recommenda-
tions under three broad policy areas in- cluding: state taxes, business assistance
Stephen J. Ubl
President and CEO Advanced Medical Technology Association (AdvaMed) Washington, DC
programs, and coverage and reimburse- ment policies. Specific recommenda- tions include: • Research and development tax credits and state-run venture capital funds should be estab- lished by states that have not already done so, providing a significant boost for start-ups in particular.
• States should consider tax credits to mitigate the impact of the federal medical device excise tax, which took effect on Jan. 1 since the federal tax will have a negative impact on industry employment as well as research and development.
• Workforce training grants should be provided to meet manufactur- ers’ needs for employees with unique skills and training for medical device manufacturing positions. Grants could fund programs administered by state life-science associations.
• Reimbursement policies under state Medicaid plans, as well as state employee insurance and workers’ compensation pro- grams, should ensure patients have timely and predictable access to innovative medical technologies.
Tis agenda will help states retain
and attract the kind of high-paying, high tech-jobs that will fuel America’s econo- my in the 21st century. We look forward to working with SMTA and state poli- cymakers to implement these proposals and ensure the US retains its competitive edge in medical innovation.