Republican Erik Paulsen, alongside 220 bipartisan representatives, has introduced a bill to permanently repeal the 2.3% tax placed on medical device companies under the Affordable Care Act (ACA).
Tax Refund
The tax, which was suspended in 2015, has been opposed by medical device companies as it negatively impacts job creation, the domestic industry, as well as small businesses.
If introduced, the bill will permanently delay the tax from taking effect in 2018. President-elect Donald Trump supports the full repeal of the tax, as well as the replacement of the ACA.
Regarding the repealing of the tax, Paulsen said: "We are already seeing new American jobs and increased investment in research and development as a result of the temporary suspension of this tax. With over 200 cosponsors at the start of this new session, and with overwhelming bipartisan support in the past, permanent repeal should be a top priority for Congress."
Medical device companies are hoping for the tax to be repealed. Scott Whitaker, president and CEO of manufacturer, Advanced Medical Technology Association 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.”
Other companies such as Philips Healthcare, CardioFocus and groups including the Medical Device Manufacturers Association and the California Life Sciences Association, welcomed the bill’s introduction.