With Sen. Max Baucus (D-Mont.) on the road to China, Sen. Ron Wyden (D-Ore.) is slated to take over the 2nd-most-powerful post in the U.S. Senate.
The senior senator from Oregon is considered to be a pragmatic dealmaker, winning praise from both sides of the aisle. That could augur well for proponents of repealing the 2.3% medical device tax enacted as part of the Affordable Care Act.
And Wyden – whose ascension follows President Barack Obama’s appointment of Baucus as ambassador to China – joined a symbolic Senate vote last year to repeal the medtech tax.
"He’s one of the most sensible Democrats," anti-tax advocate and Republican firebrand Grover Norquist told Politico. "While there probably shouldn’t be any Democrats on the Senate Finance Committee, if you have to have one, Ron Wyden would be a fine choice."
In trying to suss out Wyden’s impact on the fight to repeal the device tax, we reached out to J.C. Scott, senior vice president for government affairs at medical device lobby AdvaMed. Our conversation, edited for clarity, is below.
MassDevice.com: We’ve always operated under the idea that the Senate Finance Committee and Sen. Baucus were central not only to the inception of the device tax, but in deciding whether this tax got rolled back or repealed. Does his departure change the landscape at all for the medical device industry?
J.C. Scott: I think the perception is accurate, in terms of what Sen. Baucus’ role was, and I think it remains to be seen what the path ahead is and whether that changes. With regard to the device tax, change is good. Sen. Wyden voted in favor of the budget amendment last spring. He said that he doesn’t agree with the device tax as a policy and he’s always been focused on innovation as a concept, due to the industries he has back in his home state. I think he may have a different perspective, but he’s still brand-new to the chair and it remains to be seen what kind of agenda he’s going to lay out and what he wants to get done, and where our issue with the device tax may fit into that.
MassDevice.com: Has AdvaMed communicated with Sen. Wyden in his previous roles?
J.C. Scott: We have engaged with him as a member of the Senate Finance Committee on a number of issues. Senate Finance has a much broader set of responsibilities than just the device tax for us. There a number of trade issues, fundamental tax reform issues and a number of issues related to the Centers for Medicare & Medicaid Services, all of which are relevant to the device industry.
MassDevice.com: Obviously the Finance Committee played a critical role in framing the Affordable Care Act. Does the committee still have a critical role in whether the tax gets repealed?
J.C. Scott: The short answer is yes. Regardless of how a repeal of the medical device tax moves in the future, whether it’s through a committee process, an amendment on a bill going through committee, or something that happens on the floor of the Senate, as chairman of the finance committee, chairman Wyden is certainly going to have a role in whatever that decision is as to whether or not to have a vote on the device tax. I don’t see the Senate leadership deciding that they’re not going to consult the chairman of the Senate Finance Committee on a tax issue as significant as the medical device tax.
MassDevice.com: Where are we with the repeal strategy – are you still looking for broader packages to attach a repeal bid to?
J.C. Scott: We’re trying to assess in this new legislative reality, where the right vehicles might be. Part of the challenge will be that, in the past, we looked for those "must pass" vehicles, such as the fiscal measures, where the device tax might come into play. I think with the passage today in the Senate of the debt ceiling increase, that this may have taken all those issues off the table for the remainder of the pre-election year.
Are there going to be other tax vehicles, or healthcare-related vehicles or job-related vehicles (since we think this is fundamentally a jobs issue), where it makes sense to engage in a debate around the medical device tax? I think we’re still assessing what the landscape is going to look like. In the meantime, we’re working hard to remind folks that the tax has been in place for more than a year. It’s having a real-world impact.
MassDevice.com: Let’s look at the enrollment numbers for ACA and the news last week from the Congressional Budget Office that they’ve downwardly revised the total enrollment numbers by 1 million. Does this help your argument that there will be no windfall?
J.C. Scott: We have never agreed with the premise that there would be a windfall from the newly insured, but certainly to the extent that proponents of the tax want to argue that there’s going to be a windfall, I think this undermines their argument. We’re seeing a much smaller volume of newly insured than they projected when creating the device tax.
MassDevice.com: Now that we’ve had the benefit of a few months to reflect on the device tax’s inclusion in the debates over the debt ceiling and the government shutdown, was it a good thing that the device tax repeal got mixed up in all that?
J.C. Scott: I don’t think we would be in any better position if we hadn’t been through that exercise, so it’s still a net positive. I certainly recognize the negative, for some, that it created the perception that this was a more partisan issue than it really is. At the same time, it raised the level of attention and visibility of what a negative policy the device tax is, and better positions us to better move forward this year.
