Senate Passes Non-Binding Measure to Repeal Medical Device Tax

The U.S. Senate passed a non-binding amendment to the FY 2014 Budget Resolution that called for the repeal of the medical device tax, if a suitable offset can be identified. This is the first vote on the repeal of the medical device tax taken by the Senate, and its passage signals an important development in overall efforts to have the tax fully repealed.

While the amendment’s passage does not affect the current implementation of the tax, it does show widespread concern over the impact that the tax is having on medical device company operations by Senators. Passage also serves as a propellant for further work in this session of Congress.  To read today’s Wall Street Journal story on the Senate vote, please click here. Below, please find the statement of the Medical Device Manufacturing Coalition, comprised of AdvaMed, MDMA, and MITA, on last night’s vote.

March 21, 2013, 10:50 p.m. EDT

Medical Device Manufacturing Coalition Applauds Passage of Medical Device Tax Repeal Amendment

WASHINGTON, March 21, 2013 /PRNewswire via COMTEX/ — Vote Underscores Bipartisan Support for Device Tax Repeal Efforts

The Medical Imaging & Technology Alliance (MITA), Advanced Medical Technology Association (AdvaMed) and the Medical Device Manufacturers Association (MDMA) today applauded the adoption of an amendment to the Fiscal Year 2014 Senate Budget Resolution that expresses support for repeal of the medical device tax. The amendment passed with 79 votes.

“Momentum is clearly growing in Congress to repeal the medical device tax as Senators continue to hear from their constituents that the impact is real — the tax is slowing economic growth and costing thousands of jobs,” said Gail Rodriguez, Executive Director of MITA. “MITA encourages Congress to prevent further job loss and protect essential research and development by promptly repealing this harmful tax.”

“Bipartisan majorities in both the House and Senate have now voted to repeal the device tax. The reasons behind mounting support to repeal the tax are clear: Across the country, this tax is cutting high-quality jobs and investments in tomorrow’s treatments and cures at companies large and small. We encourage leaders in Congress and the Administration to seize on this momentum and act to repeal this harmful tax,” said Stephen J. Ubl, President and CEO of AdvaMed.

“Today’s overwhelming support of the amendment shows that clear majorities in the Senate and the House of Representatives recognize that the medical device tax needs to be repealed so that America’s medical technology community can spur growth and create the great jobs that come along with it,” said Mark Leahey, President and CEO of MDMA. “Every day innovators in this dynamic industry are looking at how to improve the quality of life for patients, and the medical device tax is standing in the way of progress and threatening America’s leadership position. While we have more work to do, MDMA applauds this important step towards ensuring that the United States remains the global leader in medical technology innovation.”

The bipartisan amendment was introduced by Senators Orrin Hatch (R-UT) and Amy Klobuchar (D-MN), with co-sponsorship from twenty-one Senators, including Al Franken (D-MN), Pat Toomey (R-PA), Lamar Alexander (R-TN), Kelly Ayotte (R-NH), Richard Burr (R-NC), Robert Casey (D-PA), Dan Coats (R-IN), John Cornyn (R-TX), William Cowan (D-MA), Joe Donnelly (D-IN), Mike Enzi (R-WY), Jeff Flake (R-AZ), Chuck Grassley (R-IA), Kay Hagan (D-NC), John Hoeven (R-ND), Johnny Isakson (R-GA), Mike Lee (R-UT), Lisa Murkowski (R-AK), Jerry Moran (R-KS), Rob Portman (R-OH), James Risch (R-ID), Jeanne Shaheen (D-NH), John Thune (R-SD), Elizabeth Warren (D-MA), Sheldon Whitehouse (D-RI) and Roger Wicker (R-MS).

The American medical technology industry is responsible for and supports nearly two million jobs, creating a growing trade surplus, and developing the technology essential to advancing patient care in the United States and around the world. However, with the implementation of the medical device tax, manufacturers have paid an estimated $388,000,000 to the Internal Revenue Service (IRS) so far this year, reallocating funds that could otherwise be directed towards investment in job creation and research and development.

This legislative effort is the most recent since February 2013, when Senators Hatch and Klobuchar introduced the “Medical Device Access and Innovation Protection Act,” which included bipartisan co-sponsorship for the first time.