The medical device industry is warning Washington, D.C., lawmakers that the medical device tax will push companies off of an "innovation cliff" if it is allowed to go into effect on January 1st.
The call comes as the U.S. Treasury Department released its final guidance on the 2.3% excise tax Wednesday. In its released documents IRS officials rejected many of the suggestions on how to lessen the impact of the tax, despite efforts of made by industry stakeholders during the lengthy public comment period ahead of the final guidance.
"AdvaMed is carefully reviewing the regulations released today by the IRS. But regardless, Congress should act to address this $30 billion tax before it takes effect on January 1," AdvaMed president Steven Ubl said in a prepared statement. "There is strong bipartisan support for action. While Washington talks about a fiscal cliff, this tax could push us off an innovation cliff, costing as many as 43,000 jobs and hurting the ability of medical technology companies to find tomorrow’s treatments and cures. It should be repealed. Already, medical technology companies are laying off workers or cutting back on research and development or other expansions."
Ubl added that the tax is "scaring away investors and it threatens U.S. leadership in medical technology, where America is a net exporter to the tune of $5.4 billion a year."
Earlier, Mark Leahey, president of the Medical Device Manufacturers Association or MDMA issued a similar call for action, saying that the final rules do "nothing to prevent the loss of jobs and innovation that has already occurred as a result of the medical device tax, and will unfortunately continue if we do not repeal this bad policy."
A copy of the IRS’ guidelines can be found here.
AdvaMed officials released a report in November, which estimated next year’s total federal tab may be nearly 30% larger than the industry currently pays.