Is medical device tax a lame duck? Industry insiders look for repeal after election

October 12, 2012 By MassDevice staff Leave a Comment

There’s a growing confidence among medical device industry insiders that there may be an opportunity to repeal the medical device tax in the interim session between the November election and the seating of a new Congress – no matter who wins the race to the White House.

"I believe there is an opportunity to repeal [the medical device tax] during the lame duck session," Mark Leahey, CEO of the Medical Device Manufacturing Assn., said during the OCTANe Medical Device Investors Forum in Irvine, Calif this week. "I’m confident we could get a repeal."

Leahey said his organization, which represents small and mid-sized medical device manufacturers, has had several fruitful conversations with Democratic senators, who he believes will support a repeal efforts if a bill is brought up for a vote on the Senate floor.

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In particular, Leahey pointed at lawmakers such as Sens Amy Kloubechar (D-Minn.) and Al Franken (D-Minn.) as likely supporters of repeal. He added that the House of Representatives bill, which passed a vote in June, now has enough votes to override a threatened veto from the White House. He said the industry is working to continue to educate members of the Senate on the dangers of the tax and will continue to do so until they get a vote to the floor of the Upper House.

Rep. Erik Paulsen, whose bill to repeal the medical device tax passed overwhelmingly in the House this summer, told MassDevice.com that he also believes there’s a chance to get a device tax repeal bill on the table as part of the sequester negotiations on the debt-ceiling during the months after the election.

"There is an opportunity to have [device tax] in the mix," he said. "It should be a part of [the discussion]."

Still, he called the November election a wild card, which would "dictate the path forward," on whether or not there is real momentum, especially if Gov. Mitt Romney is able to beat President Barack Obama on November 6th.

Paulsen declined a chance to handicap the chances of the tax ending up in the mix. He added that getting the talks going after the election may not offer much solace for device makers, some of which are already making cuts in anticipation of the impending tax, which is slated to go into effect in 2013. Most medical device companies, he said, need answers now from the IRS in particular on how the tax will be structured.

But there appears to be a contagious confidence re-emerging in medtech circles that the medical device tax may yet be repealed.

The same sentiment was echoed last week at the AdvaMed 2012 Conference in Boston where B. Braun Medical CEO Caroll Neubauer told audience members, "we have a bill in the U.S. Senate which, if it gets to the floor, would pass. It would get 53 or 54 votes from outspoken Senators, including Democrats, who are going to vote for it."

Those comments came after AdvaMed CEO Stephen Ubl, who told reporters that the industry has seen "considerable Senate support for the repeal, and it seems to be growing."

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