FLASH: Medical device tax payments hit the $1B mark

July 15, 2013 by Arezu Sarvestani

Medtech companies have collectively paid an estimated $1 billion in compliance with the Affordable Care Act's 2.3% medical device sales tax.

MassDevice.com coverage of the medical device tax

The 2.3% medical device sales tax has cost the industry an estimated $1 billion so far, according to a report released by a coalition of medical device lobbying groups, which called the milestone "frightening."

The tax costs medical device makers an average of $194 million per month, funds which should be going to research & development efforts and to salaries for new employees, according to the Medical Imaging & Technology Alliance, AdvaMed and the Medical Device Manufacturers Assn. 

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"Each day that goes by with the medical device tax in effect is a major roadblock for patient care, job creation and innovation," MDMA president & CEO Mark Leahey said in prepared remarks. "This issue is a shining example where there is overwhelming bipartisan support in both chambers of Congress to right a wrong, and MDMA continues to work with all stakeholders to get repeal of this onerous policy across the finish line."

The tax, implemented by the Affordable Care Act in order to help raise funds for healthcare reform, took effect at the start of 2013, despite the efforts of medtech industry groups to strike the levy in Congress. Although device makers have managed to generate support from lawmakers on both sides of the aisle, repeal efforts have been hindered by disagreements on how to make up for the $30 billion in revenue the tax is supposed to raise over the course of a decade.