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Contact:
Mark E. Brager
(202) 434-7244
mbrager@advamed.org
November 1, 2017

Investor Tax Credit Will Spur Innovative MedTech Development

WASHINGTON, D.C. – AdvaMed Accel issued the following statement today from Executive Director Ashley Wittorf on the introduction of legislation (H.R. 4175) in the U.S. House of Representatives to encourage investment in start-up medical technology companies:

“Smaller medtech companies are a source of some of the most cutting-edge new treatments and cures, and a key driver of job creation in the sector. However, due to a number of regulatory and reimbursement challenges facing the industry, investment in early-stage start-ups has fallen to its lowest point in decades.

“Venture capital and angel investor funding are the lifeblood of these start-ups, and without it potentially life-changing innovations will never see the light of day.

“The legislation introduced yesterday evening by Reps. Jason Smith (R-Mo.) and Brad Schneider (D-Ill.) – the ‘Invest in Innovative Small Businesses Act’ – will help reverse the negative funding trend facing medtech by providing an incentive for investors to return to the sector. The association commends them for their leadership on this issue.

“The bill would create a tax credit for investing in pre-revenue companies engaged in a high-technology field such as medical devices or diagnostics. In addition, the company has to have fewer than 250 employees, be headquartered in the U.S. and have been in existence for less than 12 years.

“The credit would be equal to 25% of the investment, and be temporary and capped, so that over the lifetime of the investor the total amount of credits would be limited to $25 million, and to no more than $5 million in a single year.

“Several states have successfully pioneered similar tax credits specific to high-technology investors. As Congress continues work on broad tax reform, inclusion of a federal innovation investor credit would promote the administration’s goals of boosting economic growth and job creation, while helping ensure the U.S. maintains its position as the world leader in medical advancement.”