The bipartisan deal struck between negotiators in the U.S. House of Representatives and the U.S. Senate includes language that removes a hurdle for proponents of repealing the medical device tax.*
The deal, hashed out by Rep. Paul Ryan (R-Wis.) and Sen. Patty Murray (D-Wash.), passed the House yesterday on a 332-94 vote.
The bill includes language passed earlier this year in a non-binding Senate vote to repeal the medical device tax. J.C. Scott, senior executive vice president for government affairs and medtech industry lobby AdvaMed, told MassDevice.com that the move makes it easier to find ways to replace the revenue that would be lost if the 2.3% levy on U.S. medical device sales is lifted.
“The practical effect is that Senate rules say if you repeal a tax you have to replace it with new tax revenues. This means they could look to other areas besides new taxes [to replace those revenues],” Scott explained. “There continues to be bipartisan support for repealing the tax.”
The budget agreement would set a 2-year budget through fiscal 2015 and partially repeal portions of the sequester limiting federal spending. It also includes $85 million in spending cuts and increased revenues from fees, plus a 0.36% reduction to the federal deficit.
The Senate is slated to take up the bill next week. President Barack Obama has said he will sign it into law if it passes both legislative chambers.
Importantly for the medtech industry, the budget deal would also allow the FDA to resume collecting the user fees companies pay to have the watchdog agency review their products.
“Because of the sequester, FDA’s device center lost $2.9 million in industry user fees in FY 2013. While the budget deal spares user fees for the next 2 years, unless a permanent solution is found, the agency stands to lose significantly more user fee funds in FY 2016 and beyond. For that reason, AdvaMed strongly supports bipartisan legislation introduced by Sens. Mark Pryor (D-Ark.) and Roy Blunt (R-Mo.) and Reps. Leonard Lance (R-N.J.) and Anna Eshoo (D-Calif.) that would address this situation,” AdvaMed president & CEO Stephen Ubl said in prepared remarks. “AdvaMed is encouraged that the budget deal preserves language from the Senate Budget Resolution calling for repeal of the medical device tax. We look forward to working with lawmakers on both sides of the aisle moving forward to achieve repeal of this tax which continues to cost our country jobs and to stifle medical innovation.”
*Correction, Dec. 13, 2013: This article originally stated that the budget deal contained language for outright repeal of the medical device tax. Return to the corrected sentence.