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Congress Poised to Step Up for Medical Innovation

April 12, 2019
1:30 pm

In a city as divided along partisan lines as Washington, D.C. is these days, you don’t often come across a legislative idea that wins broad support from both sides of the aisle.  The fact that a majority of the U.S. House of Representatives is sponsoring legislation to repeal the medical device excise tax is a strong indicator that it’s time to act to take this counterproductive tax off the books.

This week, a House bill to repeal the medical device tax was introduced by a quartet of lawmakers, Representatives Ron Kind (D-WI), Jackie Walorski (R-IN), Scott Peters (D-CA) and Richard Hudson (R-NC).  This legislation has 227 original cosponsors and follows the introduction of a companion bill in the U.S. Senate by Senators Pat Toomey (R-PA) and Amy Klobuchar (D-MN).

Congress has previously acknowledged the inherent flaws in this tax by suspending its implementation.  The next logical step is full repeal.  A 2.3 percent excise tax on medical device company revenues – not profits – is extraordinarily punitive and disproportionately harmful to innovators still trying to establish themselves in the marketplace.  The tax has had a negative effect on investment and job creation and undermines medical innovation at a time in which we need to be incentivizing it.

Chronic disease continues to be the greatest driver of healthcare cost escalation.  By continuing to develop more effective treatments and technology, we can enable patients and their healthcare providers to better manage these conditions and reduce the frequency of emergency room visits and acute care episodes.  An excise tax on the tools needed to improve quality of life and achieve greater health system sustainability makes no sense.  A bipartisan majority of Congress wants to do away with this tax.  They should move expeditiously to do so.