AdvaMed’s president & CEO Stephen Ubl and chairman James Mazzo.
AdvaMed officials today released a set of principles for modifying the U.S. tax system, part of the group’s efforts to gain Democratic support for repealing the impending 2.3% medical device tax by separating the issue from health care reform.
"We believe, candidly, that if we are successful in repositioning the device tax as a jobs and economic growth issue in the context of tax reform, that many more Democrats will view that issue in the same way and join us in the effort to repeal the tax going forward," AdvaMed president & CEO Stephen Ubl said during a conference call with reporters today.
AdvaMed’s principles include leveling the playing field for device makers around the world, encouraging U.S. leadership by providing incentives to keep manufacturing at home, providing incentives for research and promoting capital for small and start-up companies, according to a press release.
"Let me make one thing very clear. This isn’t about health care reform," Ubl said. "Repealing the device tax is the 1st down-payment on much-needed tax reform. The device tax had little to do with the Accountable Care Act, except that it was added to obtain $20 billion to help pay for the bill."
The gesture drew skepticism from some meeting attendees, who suggested that the industry was refusing to pay its fair share for health care reform measures that would provide insurance for millions of new potential customers, thereby increasing industry revenues.
"Our research suggests that the addition of newly covered individuals will not make a material impact on company revenue," Ubl said. "Otherwise we might have a different view of the device tax."
Ubl noted that much of med-tech’s core customers are in the Medicare population, and potential revenues from other age groups would do little to make up for the impact of the tax.
AdvaMed was largely dismissive of the newly minted draft guidelines for the device tax issued by the IRS last week. While the group hasn’t finished its analysis of the guidelines, it plans to spend most of its energy on repeal rather than quibbling about the details.
"I’d like to keep the focus on the need to repeal the tax," Ubl said. "Obviously, the rule is not going to do anything to simplify our tax code or make our tax burden more rational."
Ubl and Mazzo also reiterated AdvaMed’s support for the agreement the industry recently reached with the FDA regarding medical device user fees, calling on Congress to pass the measure quickly.