Once in a while, a topic comes along that allows legislators to unite, even across partisan lines. The attempt to repeal the Medical Device Tax seems to be one example of this phenomenon.
The Medical Device Tax was enacted as part of Obama’s Patient Protection and Affordable Care Act in March of 2010, in theory, as a way to help offset the cost of the overall reform. However, there is concern that the 2.3% tax on medical device companies will instead have very different results. There are fears that the tax will limit entrepreneurship, innovation, and therefore jobs in the medical device manufacturing industry. And, perhaps even more worrisome, that the tax will actually drive up our health care costs when medical device companies pass the tax expense to the end users; the opposite of the president’s initial intent.
Efforts have been made to repeal the Medical Device Tax legislation. And, from recent updates, it seems these endeavors are getting traction. At least three different pieces of legislation have been introduced to repeal the Medical Device Tax bill by the following representatives: Rep. Erik Paulsen (R-Minn), Sen. Orrin Hatch (R-Utah), and Rep. Jim Gerlach (R-PA), who was co-sponsored by Reps. Jason Altmire (D-PA) and Tim Holden (D-PA).
To make his point more clear Rep. Erik Paulsen circulated a “Dear Colleague” letter requesting support for his legislation. As a result, his bill has effectively attracted signatures from both sides of partisan lines.
In addition, industry associations such as the Advanced Medical Technology Association (AdvaMed) and the Medical Device Manufacturers Association (MDMA) have been working with legislators to get the tax bill repealed. The on-going debate and discussion on the topic seems to be creating significant support in Congress, but only time will tell what the end result will be.
What effect will the Medical Device Tax have on your medical company? What are the recent developments on this topic? Please feel free to leave a comment below or to contact one of our contact our Life Sciences and Innovation Group by calling 440-449-6800.
Click here to read more about what qualifies as a taxable medical device.