Patient, Research, Surgeon Groups Urge Congress To Permanently Scrap Device Tax

Wednesday, November 8, 2017
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A coalition of patient advocacy, research and surgeon groups penned letters to House and Senate leaders on Wednesday (Nov. 8) urging them to permanently repeal the medical device excise tax, which is set to go back into effect in January 2018. The letter argues the tax will stymie medical device innovation and reduce incentives for medical device research, echoing many of the points made by Research!America in a separate letter last Thursday (Nov. 2).

The medical device industry and other opponents of the device tax had hoped a repeal of the tax would be included in Children's Health Insurance Program funding legislation, and most recently in the GOP tax reform bill moving through the House this week. But the substitute tax overhaul bill unveiled by Ways & Means Chair Kevin Brady (R-TX) wouldn't repeal any of the Affordable Care Act's excise taxes. Brady indicated Monday (Nov. 6) he hopes to move a separate bill by year's end providing "temporary, targeted relief" from several of the ACA's taxes. The upcoming measure is expected to include relief from the medical device tax, health insurance tax and tax on over-the-counter medications -- the repeal of which all have bipartisan champions.

In their Wednesday letter, the AIDS Institute, American Association of Neurological Surgeons, Lung Cancer Alliance, U.S. Pain Foundation and nine other health organizations argue that the uncertainty surrounding the future of the tax is "preventing manufacturers from maximizing investments" in research and development.

The groups also point to ongoing development and potential future breakthroughs in the medical device space that could be negatively affected by the device tax.

In its Nov. 2 letter, Research!America also argued the tax would negatively impact development of new medical devices and other medical technologies, especially new diagnostic tools, by disincentivizing investment and diverting capital from medical device R&D.

"We firmly believe that if accelerating the pace of medical progress, bolstering U.S. innovation output and capacity, and growing jobs are American objectives, the nation would be blocking its own path by sustaining the medical device excise tax. By disincentivizing investment in medical device R&D, the medical device tax works against progress toward new medical technologies that can save lives and provide transformative support to individuals with disabilities," Mary Woolley, Research!America president and CEO, wrote in the organization's letter.

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