Medical Device Tax Repeal Might Actually Happen

The U.S. House voted 280-140 to repeal the 2.3% excise tax, which was part of the 2010 Affordable Care Act.

Chris Newmarker

There's a chance U.S. medical device groups may be near their lobbying holy grail of getting the excise tax on their products repealed that was first implemented on January 1, 2013.

The U.S. House on Thursday voted 280-140 to repeal the tax, with 46 Democrats joining 234 Republicans to pass the bill. The vote exactly met the two-thirds majority needed to override a threatened veto from President Barack Obama, according to The Associated Press.

Next up is the Senate, where Republicans only have a majority of 54 out of 100, and would need Democratic votes for a veto-proof vote. Major medical states such as Minnesota and Massachusetts, however, are represented by Democratic senators who have called for repeal of the tax, and could provide some of the needed votes.

Medical device groups have lobbied hard against the tax ever since it was included in the 2010 Affordable Care Act to help pay for health reform. Total device industry contributions to congressional candidates jumped from $6.5 million in the 2010 election cycle to $10.4 million in 2012, with another $6.8 million spent in 2014, according to the Center for Responsive Politics.

The tax has been blamed for everything from fewer U.S. medtech jobs to companies moving headquarters overseas to slower innovation.

"With an aging population and growing incidences of chronic disease, now is the time for more--not less--resources to advance cures and treatments to help people live longer, healthier, and more independent lives," Stephen J. Ubl, president and CEO of AdvaMed, said in a news release.

Trade group MassMEDIC in Massachusetts said: "We look forward to another 'yes' vote in the U.S. Senate."

Meanwhile, a recent statement of Obama administration policy calls a device tax repeal as a "large tax break to profitable corporations," and says the president's senior advisors would recommend a veto.

"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," the statement said.

Chris Newmarker is senior editor of Qmed and MPMN. Follow him on Twitter at @newmarker.

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