Instead, a lot of these companies have chosen (and will choose as of 2018) to move their factories overseas, and countries such as China or Canada benefit as a result. Losing these companies is a huge blow to the American economy and its healthcare system.
And to compound matters, it’s true to say that the device tax has to be accounted for by these companies somehow.
A Severe Lack of Investors in R&D Thanks to Taxation
To make matters even worse, the U.S. currently spends less than five cents of each health dollar on Research and Development. This means that funding is at an all-time low, and the brand name pharma companies – who receive a tax on their drugs – and medical device manufacturers who are already struggling with the 2.3 percent tax don’t have sufficient government funding to innovate.
Why is this important? Because these are the companies who are researching treatment for illnesses and diseases like Alzheimer’s or Diabetes. They’re the ones who are helping save the lives of American citizens. Private funding alone isn’t enough to help these companies develop the products required to deal with outbreaks of Zika, and the lack of funding has discouraged major pharma companies like from actively researching a vaccine.
