AdvaMed Lends Support to Tax Bill

NEWS TRENDS

AdvaMed has thrown its support behind a new tax bill intended to foster innovation in medical technology. The American Life Sciences Competitiveness Act of 2007 would modify net operating loss rules and create a medical innovation tax credit for clinical trials.

“Creating incentives that reward innovation in medical technology is essential to helping patients lead longer, healthier lives and strengthening our healthcare system,” AdvaMed president and CEO Stephen Ubl said in a press release. “AdvaMed commends Congresswoman Allyson Schwartz for introducing important legislation that will modernize tax laws to encourage continued investment and advancements in medical technology.” Schwartz (D–PA) sponsored the legislation along with Reps. Kevin Brady (R–TX), Richard Neal (D–MA), and Wally Herger (R–CA).

The bill's updated tax code is expected to be most beneficial for small companies, which make up a large portion of the device industry and are responsible for many of its innovations. More than 70% of the companies that belong to AdvaMed have fewer than 50 employees. Products generated by these companies tend to be in niche markets and bring in less than $30 million in sales annually.

The bill includes provisions to make the research and development tax credit permanent and to promote long-term investment in small life sciences companies, who often struggle to raise research capital.

“Ensuring that inventive, entrepreneurial medical device companies can attract the funding to develop and bring new technologies to market will result in improved healthcare for all Americans,” said Electrical Geodesics Inc. president Ann Bunnenberg. She is also the board chair of AdvaMed's Emerging Growth Company Council.

Other highlights of the bill include provisions to modernize the orphan drug credit and encourage the development of new biodefense and pandemic flu countermeasures.

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