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Wanda Moebius
February 7, 2013

Coalition of Medical Technology Manufacturers Applauds Bipartisan Efforts to Repeal Job-Killing Medical Device Tax

With Bipartisan Cosponsors, Senate Bill Demonstrates Growing Device Tax Repeal Momentum

Washington, D.C. – A coalition of medical device manufacturers today applauded Members of the Senate and House of Representatives for their recent bipartisan efforts to repeal the 2.3% medical device excise tax. Today, Senators Orrin Hatch (R-UT) and Amy Klobuchar (D-MN) introduced the “Medical Device Access and Innovation Protection Act” and yesterday, Reps. Erik Paulsen (R-MN) and Ron Kind (D-WI) introduced the “Protect Medical Innovation Act.”  

The Senate bill includes bipartisan co-sponsorship for the first time from Senators Hatch, Klobuchar, Richard Burr (R-NC), Patrick Toomey (R-PA), Robert Casey (D-PA), John Cornyn (R-TX), Al Franken (D-MN), Dan Coats (R-IN) and Joe Donnelly (D-IN), indicating growing support among Senators for device tax repeal. In the House, a bipartisan group of 175 are co-sponsors of the repeal bill. 

“MITA applauds this bipartisan effort to safeguard American jobs and patient access to innovative diagnostics and therapies,” said Gail Rodriguez, Executive Director of the Medical Imaging & Technology Alliance (MITA). “In uniting together to defeat this burdensome tax, a growing number of members of Congress affirm what manufacturers have long known: the medical device sector is a critical driver of economic growth, bringing the most innovative life-saving technologies to market while creating and sustaining thousands of American jobs. This legislation underscores that repeal is essential so that companies can continue to invest their resources here in America.”

“Repealing the device tax is our top priority and is critical to job creation and continued medical progress in the medical technology sector. We greatly appreciate Senators Hatch and Klobuchar’s continued leadership on this issue,” said Stephen J. Ubl, President and CEO of the Advanced Medical Technology Association (AdvaMed). “The momentum for repeal is growing. The number of co-sponsors and the strong bipartisan support for repeal underscores the importance of this issue to companies large and small who are already living with the real-world harmful impact this tax is having. We urge Congress to move swiftly on this legislation.”

“MDMA thanks Senator Hatch, Senator Klobuchar and all of the original co-sponsors of this important legislation for their leadership, and we will continue building the bipartisan momentum to repeal the medical device tax,” said Mark Leahey, President and CEO of the Medical Device Manufacturers Association (MDMA). “Americans want Congress to work together on commonsense policies that will grow our economy and improve patient care, and this important issue is a great example of how it can be accomplished. We must act quickly if we are to prevent the further loss of jobs and innovation that has already occurred under the medical device tax, and MDMA and our members will zealously push to get this legislation across the finish line.” 

The Coalition stressed that efforts to repeal the tax are not a referendum on the Patient Protection and Affordable Care Act (ACA), but rather, a bipartisan agreement that the medical device tax hurts both patient access to medical technologies and the competitiveness of the U.S. medical device industry.

America’s medical technology industry helps to save lives and improve health outcomes for patients. Between 1980 and 2000, life expectancy has increased by three years and hospitals stays have reduced by 56 percent thanks in part to advancements in medical progress. A wealth of existing research exists demonstrating that, when used appropriately, medical imaging technologies improve patient outcomes and reduce healthcare costs.

Under the 2.3 percent tax, device manufacturers are now required to pay an estimated average of $194 million per month in medical device tax payments (with a payment of approximately $97 million due semimonthly). This tax threatens a medical device industry that helps employ 2 million nationwide, generates approximately $25 billion in payroll, pays out salaries that are 40 percent higher than the national average ($58,000 vs. $42,000) and invests nearly $10 billion in R&D annually.