Senate follows House in launching medical device tax repeal bill

MassDevice.com coverage of the medical device tax

A bipartisan group of Senators today released a bill that would repeal the 2.3% medical device tax, closely following a parallel bill released in the House of Representatives yesterday.

The pair of blows effectively reignites the medical device industry’s fight against the new tax, a battle they lost last year when Congress left attempts to repeal or delay the levy out of the final fiscal cliff negotiations. The 2.3% sales tax took effect at the start of the year as prescribed by President Barack Obama’s Affordable Care Act, but the war for repeal is not over.

The new Senate bill includes participation from 9 senators, 4 of which are Democrats. The blue members are key to repeal as medtech industry advocates overcome an underlying aversion to tinkering with and potentially weakening the Affordable Care Act.

The Senators named on the new repeal effort are:

  • Orrin Hatch (R-Utah)
  • Amy Klobuchar (D-Minn.)
  • Richard Burr (R-N.C.)
  • Patrick Toomey (R-Penn.)
  • Robert Casey (D-Penn.)
  • John Cornyn (R-Texas)
  • Al Franken (D-Minn.)
  • Dan Coats (R-Ind.)
  • Joe Donnelly (D-Ind.)

Of the group, Sens. Klobuchar and Franken were also signatures on a letter sent late last year to Senate Majority Leader Harry Reid (D-Nev.) to ask for a delay on the medtech tax.

Repeal is practically a sure thing in the House, where a similar medtech tax repeal bill passed passed 242-173 last year, and this week Reps. Eric Paulsen (R-Minn.) and Ron Kind (D-Wis.) jointly introduced a new repeal bill to replace the one that expired with the seating of a new Congress.

Passing a repeal bill in the Democrat-led Senate, however, is an uphill battle. Device makers have ceded that repealing a tax that has taken effect is a difficult order, but they also have to fight perceptions that the repeal efforts will weaken President Obama’s landmark healthcare reform measure. President Obama himself has said on no less than 2 occasions that he would veto any bills that would strike the medtech levy, should any make it to his desk.

Advocates for repeal remain undeterred, and industry lobbying groups have banded together to convince lawmakers that the tax represents a danger to U.S. innovation, an obstacle to patient access to health technologies and a failure of the U.S. corporate tax structure. Lobbyists are taking pains to reinforce that their battle isn’t an attack on healthcare reform, even though the $30 billion the medtech tax is slated to raise over 10 years is intended to help fund the Affordable Care Act.

"In uniting together to defeat this burdensome tax, a growing number of members of Congress affirm what manufacturers have long known: the medical device sector is a critical driver of economic growth, bringing the most innovative life-saving technologies to market while creating and sustaining thousands of American jobs," Medical Imaging & Technology Alliance executive director Gail Rodriguez said in prepared remarks. "This legislation underscores that repeal is essential so that companies can continue to invest their resources here in America."

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