Bipartisan Group of Lawmakers Urge Permanent Repeal of Device Tax

A bipartisan team of eight Congressional leaders are circulating a “Dear Colleague” letter to urge fellow members of Congress to permanently repeal of the 2.3% medical device excise tax before it is reinstated next year.

The device tax has only been in effect for two years—between 2013 and 2015—since it was introduced in 2010 under the Affordable Care Act. From device firms and industry groups to patient advocacy groups and health research organizations, the push against the 2.3% levy on the sale of most medical technologies has continued to grow in terms of the number and types of opposed stakeholders.

The latest letter was circulated on Wednesday and calls for co-sponsors of the Protect Medical Innovation Act of 2019. The bipartisan piece of legislation was developed by Rep. Ron Kind (D-WI) and first introduced by former Rep. Erik Paulsen (R-MN) in 2011. If enacted, it would immediately repeal the device tax.

“If Congress does not act this year, the medical device tax will be reinstated in 2020 and billions of dollars will be diverted away from research and development for cures and therapies,” the eight lawmakers argued. “Perhaps most concerning, the short-term suspensions limit the ability of companies to make longer term investments in new technologies and treatments without the certainty of a full repeal.”

The sense of urgency lawmakers expressed in their letter comes after the tax received its second two-year moratorium last year as part of a short-term continuing resolution. Both the 2016 and the 2018 moratoriums received bipartisan support, citing hindered industry innovation and job creation.

“Congress has suspended the tax longer than it has allowed it to be in effect,” the letter noted. “While these suspensions have had no measurable impact on health care coverage, the relief has enabled medical device makers to invest in important research and development projects and new hires.”

Most of the new letter’s signatories joined the bipartisan Congressional movement to permanently repeal the medical device tax years ago. Long-time supporters of a repeal include Reps. Kind, Scott Peters (D-CA), Suzan DelBene (D-WA) and Jackie Walorski (R-IN). Other signatories include Reps. Terri Sewell (D-AL), Richard Hudson (R-NC), Darin LaHood (R-IL) and Jason Smith (R-MO).