Like a recurring nightmare for medical device manufacturers, the 2.3% medical device tax may actually return in 2020.
It’s been seven years since the tax was instituted as part of the Affordable Care Act (ACA). After near widespread pushback from manufacturers, the tax was suspended from 2016 to 2019. Unless Congress acts, the tax will go back into effect on January 1, 2020.
The Medical Device Manufacturers Association (MDMA), the Advanced Medical Technology Association (AdvaMed), the Medical Imaging & Technology Alliance (MITA) and virtually every medical device manufacturer in America sent a letter to congress urging them to permanently repeal the medical device excise tax.
2.3% Tax on Every Medical Device
The medical device tax is a 2.3% levy on the sale of nearly every medical device sold in the country—from large joint implants and spine braces to pacemakers and stents to MRI machines and CT scanners.
In their letter to Congress, the orthopedic companies and their representatives in Washington wrote: “The United States is the world leader in manufacturing life-saving and life-enhancing diagnostics and treatments within an industry that is an important engine for economic growth. Unfortunately, when the medical device tax was in effect, it had an adverse impact on R&D investment and job creation, jeopardizing the U.S. position as a global leader in medical device innovation.”
Furthermore, said Jeff McCaulley, CEO of Avalign Technologies and Chairman of MDMA, “This diverse community of voices urging Congress to fully and permanently repeal the medical device tax is yet another example of the growing coalition working together to ensure this tax on innovation never returns. Having fought against the medical device tax when it was first proposed in 2009, MDMA remains committed to working with Members of Congress and all stakeholders to make sure that this disastrous policy never diverts precious resources away from the cures and therapies of tomorrow.”
Kevin Lobo, Chairman and CEO of Stryker Corporation and Chairman of AdvaMed said, “Congress needs to act now to stop a $20 billion tax on the medical technology industry from coming back at the end of the year. This tax hurts innovation and the development of future treatments and cures. American patients and health care providers are counting on our industry to help improve and save lives and this tax is an obstacle to that mission.”
Dennis Durmis, Senior Vice President Bayer Radiology, America’s Region and Chair of MITA Board of Directors chimed in saying, “We applaud the sweeping coalition of more than 600 signatories for leading the charge in urging lawmakers to repeal this economically harmful and innovation stifling tax. By making their voices heard in the halls of Congress, innovators, patients, and job creators are letting our elected leaders know that the time has come to end permanently this punitive and burdensome excise tax.”
