Pro-Innovation Tax Policy Strengthens U.S. Medtech Leadership, Delivers for Patients 

America’s leadership in medical technology is no accident. It’s the product of decades of investment, scientific excellence, and public policies that recognize the uniquely innovation-driven nature of our industry.  

The tax incentives in the One Big Beautiful Bill Act passed by Congress and signed into law by President Trump last year are a prime example of the public policies reinforcing the U.S. position as the global leader in medtech innovation. 

The provisions encourage domestic manufacturing, promote research and development, and incentivize investment in machinery and equipment. 

Their enactment, and in several cases their permanence, reflect a keen understanding by President Trump that incentivizing, predictable tax policy matters deeply for an industry that invests so heavily in research and development, employs hundreds of thousands of highly skilled workers in manufacturing and research and development across the United States, and delivers lifesaving technologies to patients every day. 

AdvaMed and our 650 member companies are grateful for these policies and continue to invest and build U.S. operations to strengthen medtech as an economic powerhouse for our country and the leader in producing the lifesaving, life-enhancing medtech in demand nationwide and around the world.  

Direct medtech employment in the United States increased steadily in the first Trump administration, thanks to sound tax, regulatory, and payment policies, a trend we anticipate will continue in the second administration as the new pro-job growth tax policies take effect—especially if regulatory policy through FDA and payment policy through CMS continue to promote innovation. 

Why R&D Expensing Matters for Medtech 

Medical technology companies make significant, sustained investments in R&D to develop safe, effective, and often entirely new solutions for patients. Worldwide, the United States leads in medtech research and development spending, exceeding $20 billion per year. 

For decades, U.S. tax policy appropriately recognized this reality by allowing companies to fully deduct R&D expenses in the year they were incurred, supporting innovation, cash flow, and competitiveness. 

When that policy changed in 2022, requiring R&D costs to be amortized over five years, it created immediate and unintended consequences for innovators, especially the small and emerging companies that make up more than 80 percent of the medtech ecosystem. Those small companies struggle to fund R&D, yet it’s fundamental to their work. Companies reported delaying clinical trials, freezing hiring, and diverting capital away from innovation simply to manage higher tax burdens. Patients ultimately bear the cost of these delays when promising new technologies are slowed or never reach the market. 

By correcting a structural disincentive to domestic innovation, policymakers have helped ensure that medtech companies can continue investing in the next generation of diagnostics, systems, and digital health tools that improve outcomes and save lives. 

What This Means for Patients  

Saving lives and improving patient outcomes is medtech’s reason for being. The pro-growth tax policies that help ensure innovators can bring transformative technologies from concept to clinic make a meaningful difference. Every bit as critical are the regulatory and payment policies necessary to continue fueling the American medical innovations that lead to longer, healthier lives for all patients. 

Americans are living longer than ever, with more precise diagnoses and effective treatments for illness emerging continuously. Thank you to President Trump and Congress for supporting medtech and the patients we serve. 

For more on how medtech saves lives, please see our fact sheet. 

Scott Whitaker is AdvaMed® president and CEO.