Congress is expected to permanently repeal medical device excise tax. However, the bill must still pass both houses of Congress and be signed by president Trump to take effect.
The house reportedly voted overwhelmingly over the summer to drop the tax completely, and last week, Senate minority leader, Chuck Schumer, first pushed for a full repeal as part of the spending deal.
The tax went into effect in 2013 and has been suspended twice since then. It was planned to come back in to effect on 1st January 2020. Medical device tax would be particularly detrimental for smaller start-ups because of the way this tax works – being taxed on sales and not profit. Additionally, the tax was anticipated to result in a huge loss of jobs within the sector.
AdvaMed president and CEO Scott Whitaker commented: “Without question, today is a great day for American patients. Inclusion of full repeal of the medical device excise tax in this funding agreement means America’s medtech industry can now focus exclusively on job number one: Innovating and bringing the medical technologies of tomorrow to patients in need.
“This truly is an overwhelmingly bipartisan win for America’s patients.
“Majority leader McConnell and speaker Pelosi are bringing an incredibly important opportunity to Congress this week to permanently end the threat of this innovation-killing tax. I want to thank majority leader McConnell, speaker Pelosi, democratic leader Schumer, and republican leader McCarthy for their leadership and determination to do what’s best for American patients and the medtech community that serves them.
“This also wouldn’t have happened without the commitment and tireless efforts of the nearly 300 cosponsors of device-tax-repeal legislation in both houses. We thank president Trump and his administration for their leadership and support, and we look forward to the president signing it into law.”
The agreement is expected to be passed this week by Congress and signed into law by president Trump.