WASHINGTON — With lawmakers bearing down on drug and device companies over prices, the industry can’t afford to lose any friends on Capitol Hill. And when it comes to medical devices, the industry might not have a better friend than Minnesota Congressman Erik Paulsen.
Paulsen, a four-term Republican, has long been device makers’ “go-to guy” in Washington, helping secure a two-year delay of the Affordable Care Act’s tax on medical devices and pursuing reforms that could help the industry.
But this year, Donald Trump is threatening to drag Paulsen down. So device makers are stepping in and pouring money into his campaign to save him.
Paulsen’s district, the Minnesota 3rd, is populated by major device companies including Medtronic and Boston Scientific as well as startups. It’s sometimes described as the Silicon Valley for health care. They call it Medical Alley.
For the firms there, the congressman has been a reliable ally.
“Paulsen’s a known quantity, a sympathetic voice, someone’s who been effective in pressing for amendments that help the medical tech industry,” said Steve Schier, a retired political science professor who has followed Minnesota politics for years.
Although he won re-election by nearly 25 points in 2014, political handicappers consider Paulsen’s race against Democratic state Senator Terri Bonoff this year more of a toss-up. Trump’s national poll numbers have cratered in recent days, and the possibility that Republicans could lose the House is being taken seriously.
They still consider Paulsen the favorite, but Democrats have made him a target. His district is filled with business-minded voters who tend to prefer the GOP’s economic policies, but who might be turned off by Trump’s bombast. The congressman, for his part, has disavowed Trump.
The device industry isn’t taking any chances. By the summer, Paulsen had received nearly $400,000 from political action committees for health care companies and trade organizations, according to Political Moneyline, a figure that will surely rise when new disclosures are released this month.
Medtronic, Boston Scientific, Eli Lilly, and Pfizer are some of the blue-chip companies that gave to Paulsen, as did influential D.C. trade groups like the Pharmaceutical Research and Manufacturers of America and the Advanced Medical Technology Association.
“As an election comes up that’s a bigger challenge, you naturally see people more engaged,” said Shaye Mandle, president and CEO of the local industry group Medical Alley Association. “You see them stepping up to ensure that we don’t lose him from Congress.”
A state senator since 2005, Bonoff had raised less than $700,000 to Paulsen’s $3.1 million as of July — and virtually none of it from political action committees for health care companies and trade organizations.
Bonoff is perceived as a business-friendly Democrat, and she touts a record that includes securing state tax credits for angel investments and medical research and development. She, like Paulsen, would like to see the ACA’s medical device tax repealed entirely.
“I’m actually upset that we’re losing her from the Minnesota state Senate,” Mandle said, “because she was very helpful as it relates to the state work.”
But forced to make a choice, device companies are overwhelmingly backing Paulsen. He’s a Republican in a House that will probably remain in GOP control, barring a Trump-driven collapse that would likely take out vulnerable incumbents like Paulsen anyway, and he has a seat on the influential Ways and Means Committee.
Bonoff said in an interview that she has received individual contributions from people inside the industry, but seemed to recognize she would have to win without the industry’s support and hope to win over device makers once she gets to Congress.
She pointed to her special election to the state Senate in 2005. That year, she didn’t receive endorsements from the local chambers of commerce, she said — but then the next year, they backed her for re-election because of the work she did in her initial stint in the legislature.
“I expect that should I be elected, it will be like that,” she told STAT. “I will be their champion.”
Paulsen’s campaign did not respond to numerous requests for an interview. But his ads have attacked Bonoff as a tax-and-spend Democrat. His campaign hasn’t focused heavily on medical device issues, but the industry still praises him for taking up its cause in Congress.
“He is the go-to guy on the Hill,” Mandle said.
For the industry, his signature achievement was the two-year delay of the device tax, passed as part of a larger government-spending bill in December. The industry has been lobbying to repeal the tax since the law passed, as has Paulsen. The delay is seen as a first step.
“Businesses that often make lifesaving products now have to pay one of the highest effective tax rates of any industry in the world,” Paulsen wrote in an op-ed in the Wall Street Journal. “The U.S. is the only country that imposes an excise tax on medical-device companies.”
Mandle also credited Paulsen with pursuing Food and Drug Administration reforms to make it easier for devices to get approved and for supporting increased funding for the National Institutes of Health.
Bonoff criticized Paulsen for his anti-abortion stance and his social conservatism on LGBT rights, two issues that she argued put the congressman at odds with the industry.
On the former, she questioned whether Paulsen opposes research that uses fetal tissue, a contentious topic on Capitol Hill after conservative allegations that Planned Parenthood was selling such materials.
“Right now, using that type of research, they are solving diseases,” Bonoff said. “I am research-based, and I would think that would be of concern to anyone who was.”
But there again, it doesn’t seem to be an issue for the industry.
“I don’t know exactly what his position is,” Mandle said. “I know there is nothing in his congressional record to suggest that he’s taken a stance that should be targeted in this election.”
