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ADA, stakeholders urge Congress to permanently repeal medical device tax

December 12, 2018

By Jennifer Garvin

Washington — The ADA, along with more than 140 other organizations, is asking Congress to permanently repeal the medical device tax, although it appears the only move Congress is taking so far is a proposed 5-year moratorium.

A week after the stakeholders sent a letter to congressional leaders, the U.S. House Ways & Means Committee introduced legislation that called for a 5-year moratorium on the medical device tax — delaying it until 2025.

In the Dec. 5 letter to Sen. Majority Leader Mitch McConnell, R-Ky., and Minority Leader Chuck Schumer, D-N.Y., Speaker of the House Paul Ryan, R-Wis., and Ranking Member Nancy Pelosi, D-Calif., and members of Congress, the stakeholders shared their “deep concern” regarding the impact of the medical device excise tax — which is scheduled to be reinstated in 2020 — and the future of medical technology innovation.

In July, the U.S. House of Representatives overwhelmingly passed H.R.184, the Protect Medical Innovation Act of 2017, which permanently repeals the device tax, with a large margin of bipartisan support. In the letter, the groups are calling for a “full repeal” of the device tax from all of Congress, so that “the medical technology industry can continue innovating new approaches to managing chronic health issues, improving the overall quality of life and developing technologies that could revolutionize the way we treat disease and illness in this country.”

The stakeholders pointed out that since the medical device tax is levied on revenues, not profits, it is “particularly challenging” for smaller companies.

“We are concerned that the impending reinstatement of the medical device tax would result in the curtailing of investment in development of such life-changing innovations and creation of fewer next-generation treatments and cures for individuals in need.” 

“Medical technology touches every aspect of the health care continuum,” the groups wrote, noting that medical technology is helping combat America’s opioid epidemic by providing alternatives to pain management, new approaches to addiction and medication management devices and apps.

“But while there have been many such innovations in recent decades, tomorrow’s breakthroughs promise even greater benefits to patient care,” the groups continued. “Ongoing development of advanced in vivo diagnostics, for example, will allow for more real-time and rapid analysis of blood samples and could be a breakthrough in the management of chronic conditions. Augmented reality technologies hold huge potential in helping surgeons become more efficient, by creating 3-dimensional reconstructions of tumors. Medical 3-D printing may someday allow organs to be created at the bedside.”

“We urge you to act before the end of this year to permanently repeal the device tax, so that individuals with life-threatening conditions will continue to benefit from the promise of advanced medical technology to extend and improve lives,” the letter concluded.