AdvaMed appeals to Trump over medical device tax
The Advanced Medical Technology Association (AdvaMed) has called on president Trump to overturn the medical device tax.
The tax, which is part of the Affordable Care Act, has been suspended since 2016 and is due to come back into effect at the end of the year. It would place a 2.3% tax on any medical device sales when the suspension is lifted.
Scott Whitaker, CEO of AdvaMed, appealed to Trump in a letter stating that the tax threatens jobs in the US and hinders medical device innovation.
“In 11 days, the medical device excise tax is set to be reinstated, meaning a massive tax increase is on its way. I am writing to you to underscore the devastating impact this tax has and will have on our industry. I know you have long supported repealing this onerous tax. I want to emphasize why, unlike other business taxes, retroactive relief from the device tax is not feasible and why action this year is essential” Whitaker wrote.
Whitaker argues that when active, the medical device tax had a significant “negative impact on medical innovation and has resulted in the loss or deferred creation of jobs, reduced R&D, and slowed capital expansion”.
He also writes that when in effect, the medical device tax resulted in a loss of almost 29,000 jobs. When the tax was suspended, it helped to free up resources that were invested into things such as R&D, new hiring, capital expansion and innovation, Whitaker says.
Earlier this year a proposed bill was introduced to permanently repeal the medical device tax. Companies such as Philips Healthcare and the Medical Device Manufacturers Association welcomed the bill.
About the bill Whitaker said: “As we predicted, the temporary suspension of the tax has led medical technology companies to reinvest funds that would have gone to the tax into new R&D, infrastructure improvements and new hiring. With the suspension set to expire in 2017, for these benefits to continue for the long term, companies need the certainty of permanent repeal to support future job growth and sustainable R&D investment. This will help ensure a strong pipeline of continued medical innovation for patients worldwide.”