The powerful Ways & Means Committee of the U.S. House of Representatives today advanced a bill that would repeal the medical device tax enacted as part of Obamacare.
The 2.3% levy on U.S. sales of prescribed medical devices was enacted as part of the Affordable Care Act and went into effect at the beginning of 2013. It’s forecast to raise between $20 billion and $30 billion over 10 years.
The “Protect Medical Innovation Act of 2015,” or H.R. 160, sponsored by longtime medical device industry champion Rep. Erik Paulsen (R-Minn.), is 1 of several bills that would do away with the tax.
The House Ways & Means Committee today voted sharply along partisan lines, with 25 Republicans and a lone Democrat (Rep. Ron Kind (D-Wis.) voting to pass the bill and an amendment from chairman Rep. Paul Ryan (R-Wis.) that would put the repeal into effect beginning the quarter after its passage into law.
"There’s an iron law in economics, that when you tax something more you get less of it. So we’ve really got our wires crossed here. We want more medical devices, and what we want is less of the bureaucratic meddling we have these days," Paul said at the hearing.
Democrats said they’d get behind a bill containing a so-called "pay-for" replacing the revenues lost to repeal.
"If you come up with an appropriate pay-for, I’m in," said Rep. Richard Neal (D-Mass.).
"This legislation would add $26 billion to the deficit," added Rep. Bill Pascrell Jr. (D-N.J.). "The device industry wants it both ways. They want the new business the ACA has created for them, and since the law was passed they’ve been lobbying to repeal it."
Some of those lobbying groups were quick to praise the House vote today.
"MDMA warned in 2009 that a medical device excise tax would thwart innovation and patient care, and sadly, these predictions have come true. Fortunately, there continues to be growing bipartisan support in Congress to repeal this onerous policy, which would allow medical technology innovators to invest more resources in the cures and therapies of tomorrow while creating new high-tech manufacturing jobs," Mark Leahey, president & CEO of the Medical Device Manufacturers Assn., said in prepared remarks. "MDMA remains dedicated to working with Congress and the diverse coalition of stakeholders to get repeal of the device tax across the finish line once and for all, and today’s vote is an important step on this journey."
"Today’s mark-up represents a key milestone in the repeal of a tax that has already had a detrimental effect on medical progress. American patients are depending on the next generation of breakthrough technologies to become a reality. With an aging population and chronic disease growing at ever-faster rates, now is the time for more – not less – resources to advance cures and treatments to help people live healthier, more independent lives," said AdvaMed president & CEO Stephen Ubl. "There is strong bipartisan support in both chambers of Congress to repeal this anti-patient, anti-innovation tax. We look forward to the full House taking up repeal legislation in the near future, and we urge the Senate to follow suit."
There are several bills afoot in both the Senate and House that would do away with the tax, in addition to Paulsen’s bill, which has 281 co-sponsors including 40 Democrats. Sen. Orrin Hatch (R-Utah) is the sponsor of the Senate’s companion bill for repealing the medical device tax, S. 149 or the “Medical Device Access & Innovation Protection Act.” The measure has 36 co-sponsors, including 5 Democrats.
A pair of Democrat-led bills would also repeal the tax, but unlike the Hatch and Paulsen measures would replace the lost revenue by closing tax loopholes for the energy industry. A bill by Sen. Ed Markey (D-Mass.), S. 844 or the “No Taxation on Device Innovation Act,” has no co-sponsors. Its counterpart in the House, H.R. 1533 or the “Medical Device Tax Elimination Act” sponsored by Rep. Alma Adams (D-N.C.), ahs 4 co-sponsors, all Democrats.
Repealing the tax also came up in a U.S. Senate subcommittee meeting in April, when the Senate Finance Committee’s healthcare panel, led by Sen. Patrick Toomey (R-Pa.) and ranking member Sen. Debbie Stabenow (D-Mich.), convened the hearing to consider the impact of the medical device tax.
