Sep. 24--Cook Medical, one of Indiana's largest and fastest-growing technology companies, is protesting a U.S. Senate proposal that would add billions of dollars in new taxes on the medical-device industry to help pay for health-care reform.

The Bloomington company, which makes a wide assortment of stents, needles, catheters and other devices used in hospitals around the world, warned Wednesday that extra taxes would slow job growth and divert huge amounts of money that otherwise could be invested in new life-saving products.

"The U.S. leads the world in innovation. This is an industry that we dominate worldwide," Kem Hawkins, Cook Medical's president, said in an interview. "Every time we take investment money away from this purpose, we are doing a disservice to patients."

The Senate Finance Committee wants to charge the medical device industry up to $4 billion a year, over 10 years, with each company paying a specific amount based on its market share, according to a bill introduced a few weeks ago.

Hawkins said he doesn't yet know how much Cook might have to pay under the proposal, as the fee structure is complex and spread across several product categories.

But he said such a tax almost certainly would slow future job growth. Cook, with more than 3,000 workers in the Bloomington area, has been adding thousands of jobs in recent years, from Indiana to Australia, as it rolls out new products. It has invested tens of millions of dollars in construction projects worldwide to expand and upgrade plants.

Earlier this year, the company launched a drug-coated stent in Europe to treat severe blockages in the leg for people suffering from peripheral arterial disease, a precursor to heart disease and a leading cause of leg amputations. It is still awaiting Food and Drug Administration approval to sell the product in the U.S.

Cook said it took an "enormous amount" of money to develop the product, but the private company declined to disclose a dollar figure.

Big additional taxes could take away money from other new products, Hawkins said. "It really does put patients at risk, and we'll never know what we don't have," he said.

The industry has combined revenues of about $130 million a year, led by big companies such as Medtronic, Johnson & Johnson, Baxter International and Boston Scientific. Cook rang up revenues of $1.6 billion last year, up more than 10 percent from 2007.

On Monday, governors of five states that are home to big medical-device companies -- Indiana, Minnesota, Nevada, California and Utah -- sent a letter to Sen. Max Baucus, chairman of the Senate Finance Committee, to express strong opposition to the new tax.

They said the new tax would increase health-care costs, crimp innovation and affect as many as 80,000 products sold in the U.S.

"This would affect everything from toothbrushes and eyeglasses to artificial heart valves and advanced diagnostic equipment," the governors wrote. "The tax would apply regardless of the size of the company or its profitability, which would have a particularly negative effect on small and mid-sized companies, the backbone of the medical technology industry."

But some analysts predict that the medical-device industry might be able to negotiate lower fees and taxes. Michael Weinstein, an analyst at JP Morgan Chase & Co., said the industry could see the amount in new taxes fall from $4 billion a year to about $2 billion a year.

"It's important to emphasize that all this is far from final," Weinstein told Bloomberg News. "There are a number of amendments under active discussion to reduce industry exposure and, in particular, limit the impact on smaller companies."

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