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Reactions to Congressional Repeal of Medical Device Excise Tax

by Elizabeth Hofheinz, M.P.H., M.Ed., December 17, 2019

It looks like roughly 21,000 American jobs are safe. An analysis by the nonpartisan Tax Foundation found that the return of the medical device excise tax would lead to a loss of 21,390 U.S. medical technology jobs and a $1.74 billion decline in the nation’s GDP.1

Today, the U. S. House of Representatives issued a full repeal of the Medical Device Excise Tax. The bill will now move to the U.S. Senate for a vote and then to the President to be signed into law.

Massachusetts Medical Device Industry Council (MassMEDIC) President Brian Johnson released a statement:

“MassMEDIC, along with our partners in Washington, D.C., have been working in collaboration for nearly a decade to ensure the full and permanent repeal of the medical device tax. After countless meetings on Capitol Hill with Congressional leadership, the repeal today is a result of bipartisan support in Congress.”

“The full repeal of the medical device excise tax lifts a huge burden from the medtech industry in Massachusetts and will help patients across the globe. This regressive tax stifled innovation for far too long and its repeal will allow medical device companies across our state to accelerate innovation, to foster continued growth of the medtech economy for the Commonwealth and to bring new therapies to patients in need.”

“MassMEDIC would like to thank the entire Massachusetts Congressional delegation, and in particular Chairman Richard Neal and Representative Katherine Clark for their leadership and tireless support. Along with the nearly 300 cosponsors of the device-tax-repeal legislation, this was truly a bipartisan effort to do what’s best for patients and medtech innovators.2

Lucas Diehl, CEO of HD LifeSciences, commented to OSN, “Permanent repeal of the medical device tax will allow HD LifeSciences to re-invest in technologies that elevate the quality of patient care. It will also allow our business to grow more quickly and create new jobs.”

Brian J. Cole, M.D., M.B.A. is Associate Chairman and Professor in the Department of Orthopedics and Managing Partner at Midwest Orthopaedics at Rush. He told OSN, “This tax on the medical device company never made sense to many of us in the first place. The medical device company faces considerable regulatory burdens and costs that are difficult to recover especially given the competitive landscape that often competes by price. Adding a tax to what amounts to a somewhat commoditized industry just because it exists in the medical space always seemed arbitrarily punitive. They made the right decision with this new piece of legislation.”

Constantin Schön, Managing Director at Silony Medical, commented to OSN: “This decrease in taxes will allow for more R&D spending by the industry, but will not alleviate the need for more cost efficient instrument and implant solutions in the market.”

References:

  1. https://www.advamed.org/resource-center/why-medical-device-tax-should-be-repealed
  2. https://business.massmedic.com/newsroom/Details/massmedic-statement-on-u-s-congressional-repeal-of-medical-device-excise-tax-12120
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Elizabeth Hofheinz

Two time winner of the MORE award Ms. Hofheinz was the first writer employed by Orthopedics This Week. The MORE award is granted annually by the American Academy of Orthopaedic Surgeons to recognize excellence in journalism. Ms. Hofheinz is currently the Director of Communications for Ortho Spine Partners (OSP).

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