A $7.4 million state grant to Organogenesis is the topic of an illuminating story in The Boston Globe, which writes, "The Organogenesis case underscores the risks when state leaders place big bets with public money on private companies."
Indeed. The company had promised to grow to 500 employees. Instead it has laid workers off, shrinking from a peak of 350 to 205 at the start of 2015. What hurt?
The company encountered its first big government-imposed setback at the start of 2013, when the new 2.3 percent federal tax on medical device firms' revenue took effect. This Affordable Care Act tax, Lowe said, cost the company more than $2.5 million a year, eliminating funds that could have supported at least 40 jobs.
But the real blow came later that same year. That is when the federal Centers for Medicare & Medicaid Services significantly cut reimbursement rates for Organogenesis' Apligraf and Shire's Dermagraft products.
Is this what capitalism in America has come to? The state government grants to companies are the cushions against the federal government taxes and spending cutbacks? What a sad story.
