Across the pond: Quest for medical device tax repeal begins

Medical device tax is set for repeal once again as District Rep Erik Paulsen attempts to continue his quest to get the law revoked.

Paulsen has so far done everything in his power to repeal the medical device tax written into the Affordable Care Act, but he keeps falling short of success.

Earlier this year, and in years past, Paulsen’s repeal bill advanced out of the House Ways and Means Committee, yet it has never made it through the Senate to President Obama’s desk.

His stumbling block however, could come in the form of lawmakers who are still at odds on how to offset the $30 billion in revenue the tax would raise.

This time Paulsen is more confident and with support from the Minnesota delegation he believes the repeal could progress even further this year.

“In the end, I do not think this offset will be the hang-up for passage,” Paulsen said.

He hopes the forward momentum and bi-partisan support behind the bill means there will be enough votes for repeal in the Senate, even if there is not an offset for lost revenue.

Medical device tax was originally written into the law in order to account for what was projected to be increased demand for medical devices.

In 2012, lawmakers settled on a 2.3 per cent tax on medical equipment from basic items like surgical gloves, to high-end artificial hearts. 

The law however only took effect in 2013 after a successful congressional push to delay its implementation.

Paulsen is not the only person working hard to get the law revoked; Senate Majority Leader Trent Lott has also lobbied for the medical device industry, gathering 400 lobbyists to try and defeat the tax.

Over 1,000 patient groups, innovators, associations and provider organisations have also come together and have urged congress to put an end to the tax, which they believe prevents innovation, hurts patient care and destroys jobs.

Fred Lampropoulus, Chairman and CEO of Merit Medical Systems has high hopes for the repeal, believing the law is a significant impediment to economic growth and investment.

He hopes the bi-partisan legislation will overwhelmingly pass both the House and Senate, with the President signing the repealing bill.

The tax has however provoked an even larger debate about the future of medical device manufacturing in the U.S.

Recently, Cook Medical, one of America’s largest medical device companies, announced in testimony to the U.S Senate Committee on finance that without repeal of the device tax, they will move device related product lines outside of the U.S.

Merit Medical systems have also confirmed that although they want to develop and manufacture their devices in the U.S., the tax is preventing investment in Utah and in other U.S. facilities, impacting company jobs.

Despite concerns for the repeal, the President vowed to veto any repeal bill that came to his desk and so an override of the law is still a possibility.