Trade association Advanced Medical Technology Association (AdvaMed) calls on Congress to repeal the medical device excise tax following the passage of the Cadillac tax repeal.
This announcement follows the passage of legislation by the United States House of Representatives repealing the Affordable Care Act’s so-called ‘Cadillac tax’.
Scott Whitaker, president and CEO of AdvaMed commented: “Today’s House vote sent a clear message that taxes on our health care system are a bad idea – and that the case for keeping the medical device tax in place no longer holds water.
“Passage of the Cadillac tax repeal opens the door to passage of the device tax repeal, which would be a win for innovation, for patients, and for job creation.
“A strong bipartisan majority of members in both chambers supports full repeal of the medical device tax – and really, after today’s vote on the Cadillac tax, it’s not possible from either a tax or health policy perspective to justify this onerous tax. We hope Congress will repeal the device tax without delay.”
The medical device industry in the United States will face a $20 billion tax increase when the excise tax goes back into effect 1st January 2020, unless Congress acts quickly.
The tax was in effect from 2013-2015 and resulted in a significant burden on innovative medtech companies, particularly for smaller start-ups which are not yet profitable, because it is a tax on sales, and not profit.
According to the US Department of Commerce 28,834 jobs were lost within the medtech industry from 2012 to 2015, when the tax was in place.