Medical device tax has been suspended since 2016, however, it is planned to come back into effect on the 1st January 2020 unless Congress takes action.
Previously when the tax was in place it had a hugely detrimental effect on the sector. According to the U.S. Department of Commerce, from 2012 to 2015, the number of U.S. medtech jobs declined from 401,472 to 372,638.
Scott Whitaker, president and CEO of AdvaMed commented: “We’ve seen it before. We’ll see it again.
“A $20 billion tax increase on the industry will have serious consequences on employment and investment. The last time this tax was in effect, we saw nearly 29,000 jobs lost, and we could face even greater losses if Congress does not stop this tax from returning.”
AdvaMed conducted a survey of medical device companies. Key findings included:
- 67.4 % are concerned about reinstatement of medical device tax leading to layoffs in their companies
- 83.2% believe the tax would result in their companies cutting back on research and development
“American patients and the American economy cannot afford for us to return to the days when this tax had such a devastating impact on our industry,” Whitaker added. “Strong, bipartisan majorities in both the House and Senate want this tax to go away. It’s time for action.”
Whitaker has previously called on both Congress and President Donald Trump to repeal medical device tax.