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CLSA Wire

Legislation to Repeal Device Tax Introduced in House with Strong Bipartisan Support

By Jenny Nieto 
April 22, 2019

On April 10, 2019, 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.) – introduced legislation to permanently repeal the medical device excise tax, known as the Protect Medical Innovation Act of 2019 (H.R. 2207).  CLSA is strongly supportive of this legislation and actively encouraged members of the California congressional delegation to lend their support as cosponsors.  Our letter of endorsement is available here. CLSA’s press release lauding the introduction is here.

CLSA President & CEO Mike Guerra issued the following statement regarding the bill introduction: “California Life Sciences Association (CLSA) welcomes the introduction of legislation that once-and-for-all repeals the ill-conceived 2.3% medical device excise tax. Since its inception, this tax has only hindered investment in medical technology research and development in California and throughout the U.S. For many years, our trade association has consistently led the charge in educating the California Congressional delegation on the perils of this tax on innovation. With over 226 bipartisan cosponsors in the House, including 22 bipartisan members of California’s delegation in the House of Representatives, this bill has broad, bipartisan support. CLSA and our extensive statewide membership of biomedical innovators welcome the introduction of this device tax repeal legislation. We will continue to work diligently with our bipartisan California Congressional delegation until this tax is fully repealed.”

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 sector. 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.

The bill was introduced with a total of 227 cosponsors overall and enjoys broad bipartisan support, with 47 Democrats signed on as original cosponsors.  22 members of the California delegation signed on as original cosponsors, including 3 freshman delegation members –representing nearly 10% of all original cosponsors.  Similarly, the 16 Democratic California delegation cosponsors represent over 34% of all Democratic cosponsors.  The bipartisan California delegation cosponsors include: Rep. Pete Aguilar (D-Redlands), Nanette Barragán (D-San Pedro), Ami Bera, MD (D-Elk Grove), Julia Brownley (D-Oak Park/Thousand Oaks), Ken Calvert (R-Corona), Tony Cárdenas (D-San Fernando Valley), Paul Cook (R-Yucca Valley), Lou Correa (D-Santa Ana), TJ Cox* (D-Fresno), Duncan Hunter (R-Lakeside), Ro Khanna (D-Fremont), Doug LaMalfa (R-Richvale), Ted Lieu (D-Torrance), Tom McClintock (R-Elk Grove), Devin Nunes (R-Tulare), Scott Peters (D-San Diego), Katie Porter* (D-Irvine), Harley Rouda* (D-Laguna Beach), Raul Ruiz, MD (D-Palm Desert), Jackie Speier (D-San Mateo/South San Francisco), Eric Swalwell (D-Dublin/East Bay), and Norma Torres (D-Pomona). (* indicates new members)

CLSA, along with our national medtech trade association partners AdvaMed and MDMA, and allied stakeholders, including Healthcare Leadership Council and Research!America, remain committed to a full and permanent repeal of the medical device tax and applaud the introduction of this legislation.

A joint press release from CLSA and Rep. Scott Peters (D-San Diego), who serves as one of the key lead cosponsors of the measure, is available on our website. To weigh in with Congress and show your support of the Protect Medical Innovation Act, and call for a repeal of the device tax, click here.

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