Industry Applauds House Passage of Device Tax Repeal Bill

On July 24, the U.S. House of Representatives passed H.R. 184—Protect Medical Innovation Act—by a vote of 283-132. The bill specifically targets the 2.3 percent medical device excise tax, which was brought about as part of the Affordable Care Act and has faced criticism from industry since its introduction for repeal. Opponents state the tax is an impediment to innovation within the space. The bill would eliminate the tax, which has already been suspended twice for a two-year period each time, once and for all.

Several industry associations were quick to announce their support for the House’s vote with public comments. The president and CEO of the Advanced Medical Technology Association (AdvaMed), Scott Whitaker, issued the following statement after passage of the bill in the U.S. House:

“Today’s vote is a win for American innovation, American jobs, and most of all for American patients, who benefit from the life-changing innovations our industry produces every day. We commend Rep. Erik Paulsen (R-Minn.) and a number of leaders from both sides of the aisle for their commitment to permanently repealing this onerous tax and for working to ensure our member companies have the long-term certainty they need to invest in R&D, hiring and other capital improvements to create the next-generation of treatments and cures. 

The overwhelming, bipartisan support for repeal sends a strong message that lawmakers recognize this tax is not good health policy or good fiscal policy. We know a significant majority of the Senate feels the same way and urge them to quickly take up this measure and eliminate once and for all this drag on one of the country’s best hopes for better patient care and economic growth.”

Regarding passage of the bill, Mark Leahey, president and CEO of the Medical Device Manufacturers Association (MDMA), gave the following statement:

“Since MDMA began the fight against the medical device tax in 2009, an overwhelming bipartisan majority has emerged in Congress to put a permanent end to this disastrous policy. Today’s vote in the House of Representatives is yet another significant step towards achieving this goal.

The historic tally in support of legislation to fully repeal the medical device tax sends a powerful message that policy makers recognize a suspension of this punitive tax does not allow for the full potential of the innovation ecosystem.

There continues to be serious challenges facing our nation’s healthcare delivery system, and medical technology innovators are developing the cures and therapies that will address them. Fully repealing the medical device tax would allow them to make significant increases to research and development, and to deliver on the promise of better patient care and improved outcomes.

MDMA urges the Senate to act swiftly to achieve our common goal of putting a permanent end to the medical device tax this year.”

Joe Panetta, president and CEO of Biocom—the association representing the life science industry of California—also stated his support of the passage in the House:

“Today, the House passed legislation to fully and permanently repeal the 2.3 percent medical device excise tax. This bipartisan legislation puts an end to short-term suspensions of the tax which have made it very difficult for medical technology (medtech) innovators to make long-term plans for their development.

While in place, the tax increased the effective tax rate for the medtech industry, stifling innovation, jobs, economic growth, and delaying patient access to medical technology. It was especially burdensome for small companies in California that are not yet profitable. A full repeal will free resources that can instead be invested in research and development (R&D), capital expansion and hiring.

From insulin pumps and heart valves to pacemakers and artificial limbs, our industry has helped increase life expectancy while reducing the burden of chronic diseases. This bill will ensure that medical device manufacturers have the resources to develop the breakthrough products of tomorrow, keep more and more patients alive and address some of today’s most pressing health care challenges, such as the opioid epidemic.

Biocom commends California legislators who strongly supported the legislation. California is home to more than 2,000 medtech establishments which support 78,000 jobs throughout the state and generate $63 billion in economic activity annually. We now turn to the Senate and urge them to pass the bill.”