CLSA in MassDevice: US House Reps introduce bill to permanently repeal medical device tax


By Fink Densford |
Jan. 3, 2017

Congressional legislation was introduced today looking to permanently repeal the medical device tax.

The Protect Medical Innovation Act of 2017, sponsored by Rep. Erik Paulsen (R.-Minn.) and Ron Kind (D-Wis.), seeks to repeal the 2.3% medical device excise tax that was enacted as part of the Affordable Care Act.

The tax, a levy on all U.S. sales of prescribed medical devices, was suspended for 2 years last December through another bill sponsored by Paulsen.

“One of the best ways to protect American manufacturing, spur innovation, and make sure the latest and best medical technology is affordable for patients is to repeal this burdensome tax. We are already seeing new American jobs and increased investment in research and development as a result of the temporary suspension of this tax,” Paulsen wrote in a statement, according to KSTP News.

Other details of the bill have not yet been released.

Medical device lobbying group AdvaMed praised the legislation, urging for a full repeal of the tax. The move was also applauded by the California Life Sciences Association, which represents California-based life science groups.

“Introduction of the Protect Medical Innovation Act is a key milestone in finally repealing this onerous tax once and for all. As one of the first bills to be introduced in the House in the new session, this sends a strong signal that repeal is a high priority for the incoming Congress. AdvaMed commends the bill’s co-sponsors Reps. Erik Paulsen and Ron Kind for their leadership on this issue. The strong bipartisan support they have gathered behind their bill makes it clear that a majority of members recognize the urgency to permanently repeal this anti-job, anti-innovation and anti-patient tax. As we predicted, the temporary suspension of the tax has led medical technology companies to reinvest funds that would have gone to the tax into new R&D, infrastructure improvements and new hiring. With the suspension set to expire in 2017, for these benefits to continue for the long term, companies need the certainty of permanent repeal to support future job growth and sustainable R&D investment. This will help ensure a strong pipeline of continued medical innovation for patients worldwide. We look forward to working with members in the House and Senate, the new administration and other stakeholders to move forward on permanent repeal of this tax,” AdvaMed CEO Scott Whitaker said in prepared remarks.

“California Life Sciences Association applauds the reintroduction of legislation to permanently repeal the ill-conceived 2.3 percent medical device tax, which could further hamper innovation and investment in medical technology research and development, if not fully rescinded. California is home to more than 1,700 medical device firms, more than any other state in the nation, employing nearly 75,000 people, making the impact of the tax on our state particularly troublesome. While the tax is currently suspended, fully scrapping the medical device tax will help ensure that the U.S. does not jeopardize our position as a global leader in medical technology innovation. With over 220 Republican and Democratic cosponsors, a majority of the House of Representatives, the Protect Medical Innovation Act of 2017 is a common-sense solution we can all agree on that will rescind this ill-conceived tax. We thank Reps. Erik Paulsen, Ron Kind and the 21 bipartisan members of California’s congressional delegation for supporting this critically important bill,” CLSA Prez & CEO Sara Radcliffe said in a press release.

There are approximately 9,000 U.S.-based medical device manufacturers which provide about 520,000 U.S. jobs and produce $150 billion in direct sales, according to industry advocacy group AdvaMed.

Read the full article at MassDevice.