The federal government is waging a stealth two-pronged war on medical innovation. And it will cost not just American jobs, but American lives.
The first prong is through new taxes. Recently, the Cook Medical company announced that it was canceling plans to open new factories because of the impending ObamaCare tax on medical device manufacturers scheduled to take effect in 2013. The 2.3% tax on total sales (not profits) will cost Cook $20 million dollars a year. As a result, the company will not be opening five plants that would have employed up to 300 people each.
Cook is not the only medical device company affected by the tax. Stryker (which makes artificial joints) will cut 5% of its workforce. Medtronic has announced the tax will cut into its investments in future products. Jonathan Rennert, chairman of Zoll Medical (which makes advanced cardiac defibrillators) has stated that the tax will mean “less innovation, fewer jobs, and fewer lives saved.”
The second prong of the war on innovation is through regulations. The Wall Street Journal recently reported how a single FDA scientist, Dr. Robert Smith, blocked approval of digital mammography machines for several years last decade. Breast cancer specialists like Dr. Etta Pisano stated that Smith had imposed “obstacles to approval that were unreasonable.” This was especially frustrating for Pisano, who had co-authored a 42,760-patient study in the 2005 New England Journal of Medicine that demonstrated the reliability of digital mammography and showed that it was “‘significantly better’ than film in finding cancer in women under 50 and those before or during menopause.”
However, Smith’s lawyer claims that Dr. Smith was merely following proper FDA procedure. Smith contends that too many other FDA regulators have an improper “cozy relationship” with medical device manufacturers, whereas Smith was merely being “an honest and rigorous regulator.”
It would be bad enough if Smith had been a rogue, overzealous regulator. But it’s even worse if Smith is correct, because that means Smith represents how the system is supposed to work.
As the Wall Street Journal notes, “There is no way of knowing whether any women had cancers advance because of the delays of digital technology.” But a friend (and breast cancer survivor) whom I will call “Cynthia” told me:
I just realized that if this particular bureaucrat had continued in his position, I probably wouldn’t be here… [P]erhaps I should send him a “thank you for moving on” card.
(Cynthia had an invasive breast cancer that was detected at a still-treatable stage with a digital mammogram. It might not have been detected until a year later if she had been obliged to have a conventional film mammogram.)
Even though this particular regulator is gone, how many more Dr. Smiths still work at the FDA, delaying other vitally-needed medical innovations for American patients?