Contentious Medical Device Tax May Soon Be Gone for Good

The medical device industry is poised to get an early holiday gift this year.

Both the US Senate and House of Representatives have passed a 2020 federal spending package this week that would permanently repeal the controversial 2.3% tax on medical devices like stents and bioprosthetic valves that was enacted in 2010 as part of the Affordable Care Act (ACA) to help fund the program. President Donald Trump is expected to sign the eight bills before the deadline of midnight tonight.

Importantly, the tax has not been paid by any companies since 2015, when Congress passed a 2-year deferment. A second suspension deal was agreed upon in January 2018 that pushed the moratorium until 2020.

In a statement released yesterday, Mark Leahey, president and CEO of the Medical Device Manufacturers Association, said the tax was “punishing patient care and job creation” and thanked legislative leaders for their assistance in ending “this tax on innovation.”

Likewise, Scott Whitaker, president and CEO of AdvaMed, a lobbying group for the medical device industry, hailed the passage of the spending bills. “Without the leadership of Majority Leader Mitch McConnell and Minority Leader Chuck Schumer, as well as that of Sen. Pat Toomey and all the cosponsors of the device tax repeal legislation, the industry would be facing massive job losses and cuts to the very research and development we need to save and improve patients’ lives,” he said in a statement. “Patients are the real winners here today.”