US House proposes 5-year extension to medical device tax suspension

The US House of Representatives has proposed a five-year suspension to the medical device tax that would keep it from becoming active again next year, according to an AdvaMed press release posted today.

The proposal comes from House Ways & Means Committee Chair Kevin Brady and Reps. Erik Paulsen (R-Minn.) and Jackie Walorski (R-Ind.), and would suspend the 2.3% levy imposed on U.S. medical device sales by the Affordable Care Act in 2013.

Industry groups AdvaMed and the Medical Device Manufacturer’s Association both lauded the move, saying the five-year suspension would be beneficial to employment and R&D in the sector.

“AdvaMed commends the leadership of House Ways & Means Committee Chairman Kevin Brady and Reps. Erik Paulsen and Jackie Walorski for their proposal to prevent this onerous tax from returning. A five-year suspension is an important first step to provide medical technology innovators with confidence that this tax will not go back into effect. With time running short, we urge Congress to adopt this suspension immediately. During the current suspension, medtech companies have been able to reinvest millions that otherwise would have been lost to the tax into new jobs, capital improvements and R&D to fuel the next generation of life-changing technologies for patients. We are committed to continuing this reinvestment in innovation if the tax is suspended on a long-term basis going forward. However, while we applaud this proposed five-year suspension, it is a only a first step toward the ultimate goal to fully repeal the medical device tax and unleash the full promise of job growth and medical innovation for American patients,” AdvaMed CEO Scott Whitaker said in a prepared statement.

“Today’s announcement by the Ways and Means Committee to work on securing a five-year suspension of the medical device tax is a significant step towards boosting innovation and patient care. We thank Chairman Brady and Representatives Paulsen and Walorski for their commitment that this onerous policy doesn’t come back into effect on January 1st, and MDMA will continue to work with the House and Senate to achieve this bipartisan goal,” MDMA prez & CEO Mark Leahey said in a press release.

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