Congressman with Premier

Jan. 27, 2011
Congressman Jim Gerlach (R-PA) to dicusss medical device tax concerns.

PLYMOUTH MEETING, Pennsylvania--One of the funding mechanisms in the Health Care and Education Reconciliation Bill of 2010 is a 2.3% excise tax on medical devices.

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Ostensibly, this tax was added to the bill to help fund expanded Medicaid coverage, including universal dental coverage, for a projected 18 million individuals (including six million children) nationwide. That universal dental coverage did not make it into the final version of the bill, but the tax did.

Looking at oral health care for this group of six million children (according to government and industry projections)--the bill would result in approximately $330 million in incremental dental services--of which an estimated $20 million would be spent on dental products.

But,according to Julie Charlestein, president of Premier Dental Products, this excise tax would have a severe financial impact on the dental products industry--a total of $159 million annually in additional taxes nationwide.

“This tax puts a massive new tax burden upon the 2,000 companies in the U.S. that manufacture and supply products and services to oral health professionals,” said Charlestein. “The tax is wildly disproportionate compared to the services rendered for this at‐risk population.”

In response to this potential threat to the financial future of many manufacturers, as well as the negative impact this legislation will have on jobs across the country at companies such as Premier Dental, company employees have undertaken a grass roots letter writing campaign to raise awareness of this issue.

Premier staffers sent personal correspondence to Congressman Jim Gerlach (R‐PA), explaining the potential damage this legislation could do to their company and the dental products industry as a whole. Congressman Gerlach, a Chester County Republican, earned a seat on the House Ways and Means Committee in December 2010, and was appointed to the Ways and Means Health Subcommittee in January 2011.

“I am extremely concerned that imposing an immense new tax on both medical and dental device manufacturers will jeopardize more than 20,000 jobs in Pennsylvania’s thriving biotechnology and life‐sciences sectors," Gerlach said.

"This new tax will dampen investment and innovation of products that improve patient care. That’s why I am committed to working with my House colleagues to repeal this tax to ensure that Pennsylvania companies, including Premier Dental, remain competitive in global markets.”

Congressman Gerlach will hold an informational meeting with Premier Dental employees and leadership at 1 p.m. Feb. 3, 2011. The congressman hopes to learn more about the issue so he can be prepared to help repeal this component of the bill.

This meeting is not open to the public, but will be open to media participation and attendance.

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