Backed by Hatch, Klobuchar, medical device makers score victory


In the two weeks before the Senate passed a resolution to repeal a tax on medical devices that was part of President Obama's health care overhaul, medical device interests threw a pair of fundraisers benefiting the leadership PAC of Sen. Orrin Hatch, R-Utah, a longtime friend of the industry.

The fundraisers are just the latest example of the industry's closeness to Hatch and its attempts to influence other key lawmakers that have been pushing to end the tax, which is supposed to raise between $20 billion and $30 billion over the next ten years. Hatch pushed to remove the tax even before it became part of the 2009 law.

Sen. Orrin Hatch speaking at the "Hatch Economic Forum" in Utah in 2012

The key legislators in the effort are Hatch, Sen. Amy Klobuchar, D-Minn., and Rep. Erik Paulsen, R-Minn., who introduced a bill to repeal the tax in February. A version of that measure passed the House in 2012 but was never considered in the Senate.

All three are among the biggest recipients of campaign contributions from the medical device industry, which has a large footprint in Minnesota. Former Sen. Scott Brown, R-Mass., is the only member of Congress who received more campaign money from the medical supply lobby in 2011 and 2012, according to the Center for Responsive Politics. Hatch got the second most, some $155,450.

On the very day that Paulsen re-introduced his measure, Feb. 6, his leadership PAC — funds that lawmakers use to increase their influence — received a $5,000 campaign check from Boston Scientific's political action committee, the first and largest check the PAC has written since the new Congress began in January. Later that month, it gave $5,000 to the leadership PAC of Dave Camp, R-Mich., the chairman of the tax-writing Ways and Means Committee, where the bill was introduced. The company is one of the biggest campaign contributors among medical device makers. Paulsen's press secretary did not respond to an inquiry. 

Shortly before Thursday night's Senate vote, which took place shortly before 9 p.m., Klobuchar was scheduled to attend a fundraiser at a restaurant near the Capitol for her leadership PAC. Her staff did respond to questions about who attended the event.

The Senate measure received overwhelming bipartisan backing — a signal, according to industry, of growing support. Past attempts by the three lawmakers to repeal or delay the measure had failed.

"Momentum is clearly growing in Congress to repeal the medical device tax as Senators continue to hear from their constituents that the impact is real," the Medical Device Manufacturing Coalition executive director Gail Rodriguez said in press release.

Klobuchar told the Minnesota Star Tribune that the bill is "about innovation and jobs." It's also about money; the Minneapolis-based Medtronic has said it will cost between $125 million and $175 million annually, MinnPost reported. Obama has stood behind the tax because the health care reform provides device-makers with 30 million new customers by expanding the insurance market.

The measure passed by the Senate would not actually repeal the tax but signals support for doing so if the Senate can make up the revenue elsewhere.

On March 7, the PAC of the Advanced Medical Technology Association (AdvaMed), the trade group for medical device makers, and Linda Tarplin, a former health care aide to President George H.W. Bush-turned lobbyist for many device makers, were among the few hosts for a fundraiser for Hatch's leadership PAC, according to an invitation to the event

A week later, another fundraiser: One of the hosts this time was the Washington law and lobby firm DLA Piper, whose clients include AdvaMed and Novo Nordisk, which makes diabetes care equipment. Hatch, who has said he will retire when his term ends in 2018, has been on a frantic fundraising pace because he hopes to take the helm of the Senate Finance Committee should Republicans win a majority in 2014, a Hatch aide told the Salt Lake Tribune recently.

This is just the latest example of device makers cozying up to Hatch, who has received more device industry money than any other sitting member of Congress over the years — some $375,083 — according to the Center for Responsive Politics. This includes money from company PACs and industry employees and their family members.

Hatch's spokesperson, Antonia Ferrier, wrote in an email that he "supports policies he believes are right — period. He opposes this tax and has been fighting it for over two years."

Beyond that, Abbott Laboratories and Boston Scientific contributed tens of thousands of dollars to a Utah charity that he helped start that helps women and children, as Sunlight has reported. The charity's main fundraising event is an annual summer golf tournament weekend where Hatch serves as the main star. Most donations to the event are not required to be disclosed, but the IRS accidentily published forms showing that the charity got over $170,000 from the pharmaceutical industry in 2007.

That golf tournament, which will be held this summer at a resort in Park City, Utah, offers nice amenities for sponsors. The charity spent $318,051 on sponsor benefits in 2011, according to tax documents submitted to the IRS. Presenting sponsors will also be rewarded with a private penthouse reception with Hatch after a long day of golf, according to the tournament agenda.


(Photo credit: Michael Jolley via Flickr)