Minnesota’s Device Companies Pumping Money into Congressional Race to Re-Elect Their Champion

In Minnesota, medical device companies and trade groups are pumping thousands of dollars into the campaign coffers of Republican Representative Erik Paulsen, STAT news reported this week.

Paulsen, the incumbent, has served Minnesota’s third congressional district since 2009 and is considered the “go-to guy” for the medical device industry, particularly for his efforts in obtaining a two-year suspension of the Affordable Care Act’s tax on medical devices, STAT reports. Paulsen’s district is often referred to as “medical alley” given that it’s home to major device companies and smaller start-ups. 

While Paulsen won his bid for reelection in 2014 with ease, the specter of Republican presidential nominee Donald Trump looms large in 2016, and there are concerns Republicans could lose seats in the House of Representatives. Polls have shown Trump’s support falling in light of recent controversies, including poor debate performances and recently unearthed audio of him engaged in indefensible “locker room” talk.

Paulsen, who called Trump’s recent comments “disgusting and offensive” and who has urged Trump to drop off out of the race, is currently involved in a tight race against Terri Bonoff. A Democratic state Senator since 2005, Bonoff had previously stated she is running for Congress “because she is sick of Paulsen staying silent about Trump.”

With the race neck-and-neck, Minnesota health care companies and national trade organizations are helping to make sure Paulsen is reelected. According to STAT, Medtronic, Boston Scientific, Eli Lilly, and Pfizer, as well as the trade groups Pharmaceutical Research and Manufacturers of America (PhRMA) and the Advanced Medical Technology Association (AdvaMed), have given nearly $400,000 to political action committees supporting his reelection.

Shaye Mandle, president and CEO of Medical Alley Association, a trade group representing medical technology companies in Minnesota, told STAT the device companies “are stepping up to ensure that we don’t lose [Paulsen] from Congress.”

So far, according to STAT, Paulsen has raised significantly more money than Bonoff—$3.1 million to $700,000 from the most recent estimates—with almost none of Bonoff’s money coming from Minnesota’s healthcare sector. Despite industry’s preference, Bonoff is also in favor of repealing the ACA medical device tax and has been actively involved in securing tax credits for medical research and development. 

The medical device tax was enacted as part of the 2010 overhaul of the US healthcare system and applies to the sales of all medical devices. Implementing the tax was delayed until 2013, but since then a 2.3% levy on all sales has been in place. In December 2015, as part of a spending and taxation bill, President Obama suspended the medical tax for two years, a delay attributed to Paulsen and other lawmakers.

The Minnesota Star-Tribune has called the two-year delay a “windfall for device companies,” reporting that Medtronic paid $135 million in excise taxes in 2015 while spending just $10 million in lobbying. Paulsen, in 2014, wrote an opinion piece in the Wall Street Journal calling the medical device tax a “job-killing, growth-stalling mess.”  

TCTMD contacted PhRMA, AdvaMed, and the office of Senator Bonoff regarding the campaign contributions. PhRMA stated they do not comment on political contributions beyond what is publicly reported data while AdvaMed, through spokesperson Wanda Moebius, noted the effort to repeal the medical device tax was a bipartisan effort, one driven by Representative Paulsen, and that his efforts are appreciated. “The two-year suspension has allowed companies to reinvest in their innovation for patient care and their employees,” she stated.

Bonoff’s office did not respond to requests for comment.   

Related Stories:

• Device Companies Paid Millions in Lobbying Fees, Campaign Contributions to Combat Controversial Tax
• Senate Votes to Repeal Medical Device Tax, Though Presidential Veto Likely
• Affordable Care Act-Related Changes Hold Promise for Future of Device Innovation, Physician Payments