Medical device tax repeal legislation introduced in Senate

A bi-partisan group of ten senators—five Republicans and five Democrats—have introduced legislation to repeal the medical device tax, suggesting that momentum is building behind efforts to eliminate the 2.3% tax.

Similar legislation to repeal the tax was introduced in the House of Representatives last week.

“Every dollar medical device manufacturers spend on this onerous tax is a dollar taken away from American innovation, job growth, and the ability to provide groundbreaking medical technologies to patients in need, said Orrin Hatch (R-Utah), chairman of the Senate Finance Committee and one of the bill’s sponsors, in a statement. “Both Republicans and Democrats understand just how bad this tax really is, and we owe it to the American people to ensure the development of life-saving medical devices are not plagued by high-costs that will, ultimately, be passed on to patients. This is a common-sense bill, and I’m hopeful Congress will act swiftly to repeal this misguided tax once and for all.”

The bill—the “Medical Device Access & Innovation Protection Act”— was co-sponsored by Sens. Amy Klobuchar (D-Minn.), Pat Toomey (R-Pa.), Joe Donnelly (D-Ind.),  Richard Burr (R-N.C.), Al Franken (D-Minn.), Rob Portman (R-Ohio), Bob Casey (D-Pa.), Dan Coats (R-Ind.), and Jeanne Shaheen (D-N.H.).

Hatch’s legislation was accompanied by a letter addressed to the leaders of both parties in Congress and signed by about 1,000 representatives of the medical device industry asking that the repeal of the medical device excise tax “be addressed as a top priority.”

“[T]he health care law imposes tens of billions in new excise taxes on medical technology companies, which are stifling innovation and U.S. competitiveness,” the letter stated. “The tax is already having an adverse impact on R&D investment and job creation, jeopardizing the U.S. position as a global leader in medical device innovation. If this tax is not repealed, it will continue to force affected companies to cut manufacturing operations, research and development and employment levels to recoup the lost earnings due to the tax. It will also adversely impact patient access to new and innovative medical technologies.”

As with the legislation introduced in the House of Representatives, the Advanced Medical Technology Association (AdvaMed), the Medical Imaging & Technology Alliance (MITA), and the Medical Device Manufacturers Association (MDMA) were quick to applaud the introduction of the legislation in the Senate.

“We’re encouraged to see continued bipartisan momentum behind repeal of the harmful device tax,” said Gail Rodriguez, executive director of MITA, in a statement. “MITA appreciates Senators Hatch and Klobuchar’s leadership in introducing this bill in the Senate. Our industry’s jobs and the U.S. economy cannot wait any longer.”