Medical Device Tax Repeal moves to the Senate

NOTE: I know I do a lot of postings on this, but this is truly a critical bill for our Industry.

The U.S. House of Representatives has passed H.R. 160, or “The Protect Medical Innovation Act” — a measure repealing the medical device tax described by opponents as a hindrance to innovation and a jobs-killer.

“Instead of hurting this industry, we should be empowering this industry,” said Rep. Erik Paulsen (R-Minn.), the lead sponsor of the bill, Bloomberg reports. “Companies are spending money on compliance and accountants instead of on research and development.”

On Thursday, the House voted 240-180 — including 46 affirmative votes from Democrats —to repeal the 2.3 percent excise tax on medical devices and supplies, reports The Washington Times. This marks the third time the GOP-led House has voted to nix the device tax, an important source of funding for Obamacare. In 2013, 17 Democrats threw their support behind a repeal bill, while 37 Democrats backed a similar measure in 2012. However, both of those bills were shot down in the then-Democrat-dominated Senate. Odds of Senate approval appear better this time, though, since Republicans now have majority control of the upper chamber of Congress.

According to The Washington Times, there may be enough support this time to muster the 60 votes needed to pass the bill in the Senate. At least five Democrats — notably from states with a strong medtech presence — namely, Sen. Joe Donnelly (D-Ind.), Sen. Ben Casey  (D-Penn.), Sen. Jeanne Shaheen (D-N.H.) Amy Klobuchar (D-Minn.), Al Franken (D-Minn.), as well as Sen. Elizabeth Warren (D-Mass.), are backing a Senate version of H.R. 160.

However, most Senate Democrats remain wary of efforts to take away sources that help fund Obamacare, particularly if such legislation proposes no alternative funding. None of the bills to repeal the device tax have offered ways to make up for the $29 billion in revenue the device tax is expected to collect over the next decade.

Even if the most recent repeal bill survives a filibuster in the Senate, it can be vetoed by President Obama. Anticipating Thursday’s House action, the White House earlier this week threatened to veto any legislation that would derail the Affordable Care Act, arguably the hallmark of the Obama administration. It described any repeal of the device tax as a tax break to corporations at the expense of providing quality healthcare to Americans.

Trade industry groups and device manufacturers have intensely lobbied against the excise tax for years. In a statement, they lauded the House’s latest decision to repeal the tax.

“Repealing the device tax will positively impact the future of medical technology and patient care by removing a barrier to medical progress and increasing resources for innovation, jobs, research and development, and manufacturing,” said Stephen J. Ubl, president and CEO of the Advanced Medical Technology Association (AdvaMed), in the statement.

“Patients are depending on the next generation of breakthrough technologies to become a reality in order to improve and save their lives. With an aging population and growing incidences of chronic disease, now is the time for more — not less — resources to advance cures and treatments to help people live longer, healthier, and more independent lives,” added Ubl.

“For far too long, the medical device tax has stymied advancements in patient care and destroyed high tech manufacturing jobs,” Mark Leahey, president and CEO of the Medical Device Manufacturers Association (MDMA), said in a statement.  “MDMA and the broad coalition of stakeholders who have worked tirelessly to repeal the medical device tax will not rest until we get this accomplished once and for all.”