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CLSA in San Diego Business Journal: Politics and Priorities Hinder Repeal of Medical Device Tax

By Jared Whitlock | San Diego Business Journal
August 5, 2018

San Diego — Competing congressional priorities are clouding the path forward for an effort to kill a 2.3 percent excise tax on medical device makers, San Diego’s NuVasive and ResMed among them.

In late July, the House voted overwhelmingly for repeal. For medical device companies, the bipartisan support — 57 Democrats voted for the measure — bodes well as the initiative heads to the Senate. But there’s question over when the matter will be taken up.

The Senate’s lengthy to-do list in the coming months includes an annual defense policy bill, water infrastructure, and confirmation hearings for Supreme Court nominee Judge Brett Kavanaugh. No shortage of hefty topics that could take precedence, simply stated. Oh, and then attention will be elsewhere with campaigning before the midterm elections.

The California Life Sciences Association acknowledged this reality but expressed optimism.

“The good news is that the number of Senate Democrat and Republican co-sponsors and supporters for the bill continues to grow. The strength of the House vote (283-132) and performance of our California Congressional delegation (30-22) should also be a clear statement to the Senate that the time to act is now,” Jenny Nieto Carey, the association’s vice president of federal government relations, said in a statement.

Device companies want to deliver a final blow to the tax, after Congress in January approved a two-year suspension. Companies urged action to avoid not only the tax, but costly accounting and reporting systems.

January marked the second delay in the tax, first instituted in 2013 on artificial joints, heart stents and other devices to help fund the Affordable Care Act.

While the medical device industry seemingly has time on its side — the tax isn’t slated to resume until 2020 — there are no guarantees. In 2017, Congress failed to deliver on promises to terminate the tax.

Adding difficulty, some Democrats have expressed that loss of tax revenue from repeal should be replaced elsewhere to fund health care.

But Carey said this is the closest yet to repeal.

Read the article at the San Diego Business Journal.