The president & CEO of the nation’s largest medical device lobby asked President Donald Trump to back its effort to repeal the medical device tax enacted as part of Obamacare.
The medtech tax, a 2.3% levy on U.S. sales of prescribed medical devices, was in effect from 2013 to 2015 and has been suspended several times since then. The current suspension is set to expire at the end of the year.
AdvaMed’s Scott Whitaker today sent a letter to Trump asking him to include repealing the measure in a tax package next year, calling it “a $20 billion tax increase on the dynamic and growing U.S. medical technology industry.”
The tax is especially damaging to small medical device companies that aren’t profitable yet because it’s based on revenues rather than profits or production levels, Whitaker wrote. Firms with 50 or fewer employees make up some 80% of the U.S. medtech industry, he wrote.
“Given your remarkable accomplishments in the private sector, you know a suspended tax is little more than a looming tax. Innovators and entrepreneurs must plan and act as if the tax will ultimately be imposed on them. The highly competitive medical technology industry needs certainty to make multi-year investments in the R&D, hiring, and growth necessary to unleash life-changing innovation,” Whitaker wrote. “By preventing a tax increase on health care as you and your administration consider decreasing taxes in 2020, this administration would be supporting a simple, commonsense way to incentivize business activity, spur economic development, create jobs, and improve our health care system in one fell swoop.”