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House Votes to Repeal Medical Device Tax

House Votes to Repeal Medical Device Tax
As expected, the U.S. House of Representatives has passed legislation that repeals the medical device tax; industry groups cheer the news. 

Marie Thibault

The U.S. House of Representatives today passed the "Protect Medical Innovation Act" (H.R. 160), legislation that includes language to repeal the medical device tax, with a 280-140 vote. The bill was widely expected to pass the House after the House Ways and Means Committee voted earlier this month to advance the proposal to the House floor. 

Rep. Erik Paulsen (R–MN) sponsored the bill, which received bipartisan support. Of the 280 "Yea" votes, 46 came from Democrats. All of the "Nay" votes were from Democrats. The bill would eliminate the 2.3% excise tax on medical devices starting in the calendar quarter following passage of the law. According to the House Committee on Ways and Means report,  "The Committee believes that repealing the medical device excise tax will decrease health care costs, encourage medical innovation, and eliminate an unfair tax burden." 

Following the vote, bill sponsor Paulsen tweeted, "My bill repealing the burdensome medical device tax passed the House 280-140. Great to see the bipartisan support for eliminating this tax." This isn't the first time the House has tried to repeal the device tax; the House passed a repeal back in 2012.

If the device tax remains in place, it is estimated to bring in billions in revenue over the coming years. The House bill does not identify a replacement source for that revenue. Repeal of the device tax has a tough road ahead. Even if legislation passes the Senate, President Obama is expected to veto it. 

According to the White House statement earlier this week, "This excise tax is one of several designed so that industries that gain from the coverage expansion will help offset the cost of that expansion. Its repeal would take away a funding source for financial assistance that is working to improve coverage and affordability and would increase the Federal deficit by $24.4 billion over 10 years." 

Medtech industry groups were quick to applaud the vote. In a press release, Stephen Ubl, president and CEO of industry group AdvaMed, said, "Repealing the device tax will positively impact the future of medical technology and patient care by removing a barrier to medical progress and increasing resources for innovation, jobs, research and development, and manufacturing."

In the same release, Mark Leahey, president and CEO of industry group Medical Device Manufacturers Assocation (MDMA), said, “The House of Representatives sent a strong, bipartisan message that it is time to put an end to this tax on innovation. For far too long, the medical device tax has stymied advancements in patient care and destroyed high tech manufacturing jobs. Repealing this policy will provide an immediate boost for medical technology innovators to continue solving the pressing challenges in the health care ecosystem."

Enhance your medtech knowledge by attending MEDevice San Diego, September 1–2, 2015, in San Diego.

Marie Thibault is the associate editor at MD+DI. Reach her at [email protected] and on Twitter @medtechmarie


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