A new house bill is set to end the medical device tax once and for all. H.R. 2207 was introduced in April — it’s goal to permanently repeal the medical device excise tax that was imposed as a provision of the Affordable Care Act in 2010.

“America’s medical technology industry is facing a $20 billion tax increase at year-end, when the current medical device tax suspension expires,” says Scott Whitaker, president and CEO of the Advanced Medical Technology Asso­ciation (AdvaMed). Urgent action is essential to protect future medtech innovations that benefit patients and to avoid putting good-paying U.S. jobs at risk.”

Whitaker says the House bill, “Protect Medical Innovation Act of 2019” brings us “one step closer to ensuring this innovation-stifling burden on the medtech industry never returns, supporting continued American leadership of this vital industry.”

The medical device tax was characterized as “an economically flawed tax,” in a report by Alec Fornwalt and Nicole Kaeding of the Tax Foundation, a tax policy nonprofit.

According to Fornwalt and Kaeding, the imposition of the tax “raises prices for consumers, lowers job opportunities, and results in less investment in the industry. Research on the period when the tax was in effect shows that R&D spending decreased, which could lead to less innovation on needed medical devices. The tax has also led to approximately 22,000 fewer jobs from 2013 to 2015.”

The bill’s lead sponsors are Reps. Ron Kind (D-WI), Jackie Walorski (R-IN), Scott Peters (D-CA), and Richard Hudson (R-NC) and has gathered strong bipartisan support.

“Medical devices and new technologies improve the lives and health of millions of Americans every year. Given that this tax applies to revenues — not profits — it is extremely punitive to medical technology innovators. It’s time we permanently repeal this outdated tax on innovation, and support jobs and well-being across the country,” said Rep. Kind in a release.

Rep. Peters highlighted the impact to innovation. “Innovation drives progress in healthcare, technology, science, and more, but the medical device tax stifles innovation and passes costs to consumers,” he said. He believes the change will fuel startup potential in San Diego and make it easier for these job creators to launch their ventures.

Whitaker noted that while past suspensions of the medical device tax have enabled manufacturers to invest in R&D, infrastructure, and new hiring — which in turn benefits patients and the U.S. economy — these benefits are at risk if nothing is done. “Now that bipartisan legislation to permanently repeal the device tax has been introduced in both the House and Senate, AdvaMed will urge Congress and the administration to act as expeditiously as possible to get rid of the tax once and for all this year,” he says.

I have been writing about the need to permanently repeal this excise tax for nearly a decade. Maybe this is our lucky year.

Sherrie Trigg

Editor and Director of Medical Content