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CLSA Wire

Congress to Introduce CLSA-Endorsed Legislation to Repeal Medical Device Tax & Protect Medical Innovation

By Jenny Nieto 
March 19, 2019

In the coming weeks, legislation will be introduced to permanently repeal the medical device excise tax. Reps. Ron Kind (D-Wisc.) and Jackie Walorski (R-Ind.) – together with Reps. Scott Peters (D-San Diego), Terri Sewell (D-Ala.), Suzan DelBene (D-Wash.), Darin LaHood (R-Ill.), Jason Smith (R-Mo.) and Rich Hudson (R-N.C.) – will introduce this measure as the Protect Medical Innovation Act of 2019. CLSA is strongly supportive of this legislation and actively encouraging members of the California congressional delegation to lend their support as cosponsors. Our letter of endorsement is available here.

As you may know, the 2.3% medical device excise tax was passed as part of the Affordable Care Act (ACA) in 2010, despite opposition from the medical device industry. Opposition has continued ever since, with repeal of the tax a top priority of the medical device sector given its impact on R&D and jobs – in fact, in 2017, the U.S. Department of Commerce released industry employment data showing the devastating impact of the medical device tax: while the medical device excise tax was in effect from 2013 to 2015, the U.S. medical technology industry saw its jobs ranks fall by nearly 29,000, a 7.2 percent decrease for the time period. Growing bipartisan support for repeal led to the tax’s two-year suspension as part of the December 2015 tax and spending bill signed into law by President Obama, and a subsequent 2-year repeal was included in the continuing resolution passed in January 2018 and signed into law by President Trump – this most recent suspension is set to expire December 31, 2019. Thus, full repeal remains an ongoing and imminent priority for the US’s innovative medtech sector.

According to CLSA’s recently released 2019 California Life Sciences Industry Report, California is home to 1,848 medical device firms employing over 81,000 people – more firms and employees than any other state in the nation – making the impact of the tax on California state particularly troublesome.

A full and permanent repeal of the medical device tax is of utmost importance to protecting California’s vibrant innovative med tech sector – CLSA has opposed this tax since its inception, and we are actively working toward seeing this tax permanently repealed before the end of the year.

To share your voice in support of the Protect Medical Innovation Act, visit CLSA’s Digital Action Center to easily contact your Member of Congress.

Questions? Please contact Jenny Nieto, CLSA’s Vice President of Federal Government Relations & Alliance Development (jnieto@califesciences.org).