The 2.3% medical device tax imposed as part of the Affordable Care Act has a good chance of being repealed this year, according to an optimistic AdvaMed CEO Scott Whitaker.
In a press conference at AdvaMed’s Medtech conference in San Jose today, Whitaker was positive about the chances of the tax being repealed, and laid out 3 specific policy focuses for the industry group for the future: tax policy, regulatory changes and CMS payment issues.
Whitaker presented options for a repeal of the tax, assuming that the current attempts to repeal and replace the ACA fall through. These include a must-sign legislation later this year, a stand-alone repeal effort and a repeal as a part of a large omnibus spending bill – which he said he has “assurances” would have such a repeal attached.
The repeal of the tax is essential for the industry, Whitaker argued, with medtech firms facing a return of the tax next year as its previous suspension runs out.
“It’s bad news for our companies, bad news for the industry and, I think, bad news for the economy and bad news for jobs,” Whitaker said.
The industry group is “open to a conversation” about a straight repeal, with Whitaker saying he’d be taking steps next month to advocate for such legislation.
“We’ve gotten positive feedback from leadership in the House that they’re willing to move that bill, and I think there are positive interactions with the Senate as well that they’d be willing to consider moving that bill as long as the votes are there. So we’re going to spend a good portion of October trying to collect the votes and see where they are,” Whitaker said.
Whitaker also seemed optimistic that, should the 1st 2 options fail, that a repeal of the tax could be part of a larger legislation later this year.
“We have assurances that it will be attached to that in some form at the end of this year. The problem with this is we need certainty now, as opposed to certainty in December. And we need more than a year, we need 5 to 10 years,” Whitaker said.
With the previous suspension running out, Whitaker said that future efforts would be focused on a full repeal, with no consideration for another suspension. At least, not until the end of the year, he added.
“It’s a question of timing. I think right now there’s no reason to consider a temporary suspension when we realize that a full suspension is possible – a full repeal is possible. If we get later in the year and congress can’t seem to get their act together, then we would. One year is better than nothing, but it doesn’t create certainty to create jobs and grow our industry,” Whitaker said.
On the regulatory front, Whitaker was also optimistic, touting the passing of the 21st century cares act last year, the MDUFA renewal this year and other victories as positive changes for the medtech industry.
“I think we’re on a very good trajectory with the FDA and regulatory issues. If you talk to our companies, you’ll hear them say, I think consistently now, that 5 years ago the FDA was a tough place to do business. Today, it’s actually a really good place to do business. I think with these 2 agreements in place it’s going to get even better, which is exciting for the future of the industry because the regulatory aspects of what we do are so critically important,” Whitaker said.
As for CMS payment issues, the situation is more complex, Whitaker said. He said is hopeful that the change in administration and positive steps over the past years were making issues with coding and coverage more obvious and that solutions were being considered.
“We have a lot of work going on in that space that we can talk about. That’s the area of probably the biggest uncertainty and concern for us. On the good side, we believe with the new administration coming in we have a very good dialogue ongoing with them to help them understand about the challenges and uncertainty it brings to a market like ours,” Whitaker said.