Many companies supported repealing the ACA, which levied an excise tax on device companies to cover expenses; the companies argued if the medical device excise tax were repealed, they'd be able to hire more in the U.S. The Consolidated Appropriations Act was signed in December 2015 and included a two-year moratorium on the tax. Has the change affected job growth among industry giants?
Not in all cases, and companies may continue to face tough times under the Trump Administration, which vows to lower healthcare spending.
Here is a quick overview of orthopedic and spine company hiring patterns over the past two years, based on an IBT report:
1. Johnson & Johnson: Less than one month after the medical device excise tax was suspended, the company reported it would eliminate 3,000 medical device jobs. At the start of 2017, the company's headcount fell by 700 people and another 1,500 jobs could be lost due to restructuring efforts.
2. Medtronic: Since the medical device tax was suspended, Medtronic has opened facilities in Singapore, Vietnam, Romania and Shanghai. The company laid off an undisclosed number of the 1,300 employees at its spine division in Memphis but reported from January 2015 to August 2016, the U.S. employee population increased by 1,300-plus positions.
3. Stryker: The company's number of employees grew from 22,010 before the tax to more than 33,000 currently. CEO Kevin Lobo attributed growth in employee volume due to its acquisitions of Sage and Physio, which were possible in part by the medical device tax suspension.
4. Zimmer Biomet: Zimmer Biomet plans to spend its savings on the medical device tax moratorium on research and development, sales force specialization, medical training and education, according to the company's 2016 Annual Report. Last year the company's U.S. workforce grew 3.6 percent and non-U.S. workforce grew by 7.7 percent.