The 2.3 percent medical device tax enacted as part of the Affordable Care Act (ACA), levied on medical devices like heart valves and MRI machines, continues to adversely affect investment in life-saving medical devices:
- The medical device industry has lost more than 33,000 jobs as a result of this tax
- “Medical Device investing declined for the third consecutive quarter, falling 37 percent in dollars and 27 percent.”-Price Waterhouse Coopers
- ”Investment in med tech has just cratered. It’s at an all-time low,” said Shaye Mandle, Executive Vice President and Chief Operating Officer of the trade group LifeScience All - Wall Street Journal
- According to a survey, about 47 percent of medical device companies are reducing investments in research and development (R&D) by an average of 18 percent to pay for the tax. Source: The Medical Device Manufacturers Association (MDMA)
While there is continued bipartisan support for repealing the 2.3 percent Medical Device tax, getting this accomplished have proved difficult, but not for lack of trying:
- In March of 2013, 79 Senators from both parties voted to repeal the tax in a non-binding vote. In fact, Senator Ron Wyden (D-OR), Chairman of the Senate Finance Committee, which has jurisdiction over tax matters, was one of 33 Senate Democrats who joined with all of the Senate Republicans to support this repeal in a non-binding vote.
- Earlier this month, an amendment was offered in the Senate Finance Committee to repeal the tax, but it was ruled out of order by the Chairman.
- Republicans sought to repeal the tax as part of a deal to keep the federal government open last fall, but Democrats objected to the tactics, as Senator Durbin, the second highest ranking Democrat in the Senate, said I am“ willing to look at it, but not with a gun to my head.”
- Congressman Dave Camp, Camp (R-MI), the Chairman of the tax-writing Ways and Means Committee in the House of Representatives, recently unveiled major, comprehensive tax reform legislation that includes a provision to repeal this tax. However, this legislation was declared “dead on arrival,” and has not shown any signs of movement. Further, Congressman Camp has announced that he will be retiring at the end of this Congress, and Congressman Paul Ryan, the former GOP Vice-Presidential candidate, is expected to take over.
While the prospects for repealing this $29 billion tax in this hyper-partisan atmosphere is not great, a group of members of Congress from the House and Senate, as well as both sides of the aisle, continue to look for ways and opportunities to repeal this tax. The votes, the support and the ingenuity appear to be there, but Congress has fumbled the ball on far easier and more popular initiatives in the past. AGG will continue to work with a broad range of businesses and consumers to seek ways to repeal this unfortunate tax.